PRICE GUARANTEE

Gisborne Herald, Volume LXVI, Issue 20072, 19 October 1939, Page 16

PRICE GUARANTEE

N.Z. DAIRY PRODUCE FACTORS IN FIXATION TERMS NOT FINALISED SALE TO BRITAIN (Per Press Association.) WELLINGTON, this day. Factors taken into consideration in fixing the guaranteed prices for dairy produce for Hie current season at the same level as last season were reviewed by the Minister of Marketing, the Hon. W. Nash, last evening. The Minister said the negotiations between the Governments of the United Kingdom and New Zealand concerning the prices to be paid for the Dominion's exportable surplus of dairy produce were still in progress. The prices ultimately received from the Imperial Government rryght be below the level of those being paid to the dairy farmer, thus involving a possible loss in the dairy industry account. Mr. Nash revealed that he had informed the representatives of the dairy industry that it was by no means certain the prices received for butter and cheese from the United Kingdom would justify an increase in the guaranteed price. If the price offered by the Imperial Government for the total exportable output of butter and cheese were the only consideration, the guaranteed price for 1939-40 should have been reduced. "The negotiations arc still in train." said Mr. Nash, "and the New Zealand Government has stated to the United Kingdom Government that it does not desire to take any advantage of the situation created by the war. but d considers that New Zealand should receive prices more in keeping with the cost of production. There had, of course, been other aspects than the ac'.ual price. These concern possible hold-ups of shipping and storage charges, as well as outside markets. A.s yet no final price has been agreed upon with the Imperial Government. Different Position "Notwithstanding the delay in completing the agreement, and because the dairy season was in progress and. in accord with my statement to the Dairy Conference and to the Dairy Board that I thought it would be preferable to guarantee to the producers 1 the same price as was paid for the 1 1938-39 season, a definite announcement was made on this season’s 'guaranteed price. The dairy producer, has been put in a position different from that of other classes of producers. who are required to accept the prices paid by the British Government, but it was felt that it would be unreasonable to reduce prices below those received by the dairy companies for the 1938-39 season.

"Reference has been made in some quarters to the price of Has per cwt. advised by a press statement as being the maximum wholesale price fixed by the British Government in the United Kingdom on September 2G. It will be clear that this price has no relation to the price the British Government is willing to pay New Zealand and Australia for their season’s output, and is fixed to cover a period of the year in the United Kingdom when supplies of imported butter are at their minimum. At this period supplies from the northern hemisphere, owing to enemy attacks on neutral shipping, ire falling away and supplies from the southern hemisphere, Australia, New Zealand and the Argentine, have not jommcnced to arrive in any quantity. Maximum Production "It will be remembered that on tire basis of conditions prior to tire outbreak of war the guaranteed prices fixed for New Zealand butter and cheese were the equivalent of the following London market prices: Butter, 12'ls per cwt.: cheese, Tits (id per cwt. “Since the outbreak of war the rates of freight and war risk insurance have risen, and the corresponding London market equivalents are much higher. The evidence proves that the industry has been continuously consulted and that the Government is faking every possible step to ensure that reasonable prices are obtained for both butter and cheese. “What is now required is full cooperation between the farmers, industrial organisations and 'he Govcrn'vicnt. so I hat production nv>v lie a' the maximum and the produce is shipped without delay, to enable the United Kingdom to make a ma.jo: effort in the difficult days ahead.”