COSTS & PRICES

Wairarapa Times-Age, 27 October 1939, Page 6

COSTS & PRICES

POSITION OF THE DAIRY INDUSTRY REVIEWED BY BOARD. NET RETURN TO FARMER LOWERED. (By Telegraph—Press Association.) WELLINGTON. This Day. The annual report of the New Zealand Dairy Board makes analysis of costs of the industry in relation to the guaranteed price for butter and cheese. “The controversy which is at present taking place in connection with this problem makes it difficult to see it .in clear perspective,” says the report. “Let it be said frankly that the Government has sought to implement its promise recorded in the Primary Products Marketing Act, 1936. “It is on the question of. the net return to the farmer that differences of opinion are expressed. On the credit side of the guaranteed prices we have the fact that in the first year of its operation the producers were paid £272,842 in excess of the amount realised by the produce on the market. For the second year of operation the producers received approximately £555,000 less than the produce realised, and whilst it is impossible yet to give the results of the guaranteed price for the 1938-39 season, it is estimated that the Government's loss on the deal may be at least £2,000,000. If this estimate is anything like correct, it will mean that producers have received the sum of £1,717,482 over and above the actual market realisations. On the debit side are the largely increased costs. It is claimed that these increases very greatly exceed the amount which has been received in excess of market realisations. It is difficult to see how such a result can be avoided under the policy which has been adopted. To give effect to the ideals of the Government policy for guaranteed prices to dairy farmers means cutting adrift altogether from the questions of market realisations. It is quite evident, however, that the Government is seeking to, as far as possible, guarantee a price that will average over the years approximately that realised on the market. With the accumulative effect of higher wages, shorter hours, and generally rising costs, it is, of course, abundantly evident that the net return to the farmer on such a basis must be less than the actual market return under previously existing conditions.” The board admits that the Government is alive to the danger of rising costs. In the negotiations which have been carried on regarding the price for the 1939-40 season, the Minister of Marketing, Mr Nash, expressed his concern in this connection, and went to the length of seeking a standstill agreement not only on the guaranteed price itself, but on the question of wages. The Selection Committee was called together on February 17. 1939. In addition to the members of the Dairy Board, there were present representa> fives of the National Dairy Federation, the South Island Dairy Association, and the New Zealand Farmers’ Union. The chairman intimated that he had been in touch with the Minister of Marketing, who had indicatted that, in his opinion, the price to be paid by the Government for the 193940 season should be the same as for the 1938-39 season. --The committee passed the resolutions, which have already been published and which are included in the board's report. As will be remembered, this committee was unable to agree with the Minister that the prices for 1939-40 should be those for 1938-39. The board’s report gives a full account of the negotiations with the Government on this vexed question of the guaranteed prices being adjusted to meet the risen and rising costs of production, and the inability of the Government to meet the difficulties as presented by the representatives of the producers. ,