THE BUTTER SUBSIDY.

Taranaki Daily News, 22 April 1921, Page 4

THE BUTTER SUBSIDY.

MINISTER EXPLAINS POSITION lAIPERIAL GOVERNMENT STOCKS. EXPORT OF BUTTER PROHIBITED By Telegraph—Press Association Wellington, Last Night. A statement regarding the fixation o! butter prices was made to-day by th< Hon. W. Nos worthy (Alinister of Agriculture). Touching on the question whether thk subsidy was being paid to benefit the producer or the consumer, the Minister said the position was simply that in the first place local butter supplies have for some time past been kept at a lower level than the export values ly means of subsidies from the .State, thus establishing a principle the true Walue of which is open to argument. In the second place butter produced from April 1 to the full opening of the new, season will be no more than sufficient for local requirements, and given the free operation of the law of supply and demand those controlling the supply could, if untrammelled by the Government, make the price accordingly. Regarding stocks stored here on behalf of the Imperial Government, and their possible utilisation for the purpose of local supplies, the Imperial Government recently notified that they would be willing to make sales of this butter, certain possible markets being indicated, and they stated the minimum price, which was well below that of 2s at the factory, at which the -butter was purchased in New Zealand. The Government was placed in the position of a selling agent, its fluty being to obtain for it as good a price as possible, even if, in the event of low prices, it had to be held in store for some time. Quite apart from this there was a fair and right course to take with the dairy farmers, who make arrangements months ahead for producing winter butter, and the Government had to endeavor to hold the balance justly between them and the consumers in every aspect the situation.

The position resolved itself into one which rendered it desirable to utilise the local supplies under the best conditions obtainable. The present arrangement would result in the exact cost of 2d subsidy being gone into, and based on a high estimate of with storage and interest charges added, it would mean about £85,000 for the whole period to August 31. This estimate was purposely made on a high basis on account of the fact that the volume of population was changing and the natural tendency to consume more butter in winter than in summer. The exportation of all butter, including whey butter and milled butter, neither of which comes under the subsidy arrangement, is prohibited.