DAIRY PRODUCE

Wairarapa Times-Age, 18 September 1941, Page 6

DAIRY PRODUCE

NEW EXPORT AGREEMENT HIGHER PRICE FOR CHEESE. RESTRICTIONS ON BUTTER PRODUCTION. (By Telegraph—Press Association.) WELLINGTON, This Day. Details of the United KingdomNew Zealand agreement concluded toward the end of last month for the purchase of dairy produce from the Dominion were given by the ■ Minister of Agriculture (Mr Barclay) today, when he addressed the annual conference of the Dairy Board. The Minister announced an increase in the price to be paid for cheese of 5s 9d per cwt sterling—approximately 7s in New Zealand currency. The Minister said: “In respect to butter production, the agreement provides that for the duration of the war and one year thereafter, the Now Zealand Government and the industry . will aim to limit production for export to approximately 115,000 tons a year, this figure to be reviewed annually in light of the storage and shipping positions. “In regard to cheese, the United Kingdom undertakes to purchase annually for the period of the war and one year thereafter a quantity up to 160.000 tons. “In recognition of the increased costs associated with the production of up to 160,000 tons of cheese, the United Kingdom has increased the price of cheese for the 1941-42 season by 5s 9d sterling per cwt.” The 115,000 tons of butter, said the Minister, did not represent the quantity that the United Kingdom Government would undertake to lift in any given year, but the obligation of that Government, under the general surpluses agreement which was concluded some months ago. That meant , that if part of the quantity could not be lifted, the two Governments would share the financing and storing of the balance. Present indications were that the maximum for this season would be ■ in the vicinity of 90.000 tons. Consequently, butter, along with meat, remained in the general surpluses agreement. If the cheese could not be lifted each year, Mr Barclay continued, the United Kingdom would make a payment for fifty per cent of the value of all cheese held in store for one month longer than was required by the shipping schedule. For cheese held in store for three months longer than the shipping schedule, forty per cent would be paid, making 90 per cent in all. The remaining ten per cent would be paid when the cheese was shipped. In the event of unexpected shipping difficulties, the United Kingdom reserved the right to review the position. A third point in the agreement provided for a purchase price of 70s ster- ■ ling per cwt for the cheese contract for 1941-42. This represented an increase of approximately 7s in New Zealand currency. This was to meet the cost of producing extra cheese and the New Zealand Government would create a special fund from which the additional cost could be met. Many of the costs could not be determined until the end of the emergency period. The price of 70s related specifically to the coming season, as both Governments reserved the right to review the price in light of actual experience. in May each year. Mr Barclay said the increase in price would be paid into a special account, and he would discuss with the industry any balance left at the end of the emergency period. EXTRA COSTS. It was impossible, Mr Barclay said, to define all of the costs likely to be charged against the account, but they appeared to fall into the followingbroad classifications—Government capital costs, such as the provision of emergency cool storage and the provis- ■ ion of houses for additional factory J employees; recurring costs, such as ■ loss on the purchase of whey butter, cost of storage, interest, insurance, etc.; dairy factory capital costs; dairy factory recurring costs; suppliers’ capital costs and suppliers recurring costs. The Government intended to set up a special committee consisting of two representatives of the industry, the Director-General of Agriculture, the Director of Export Marketing and the Minister, as chairman, to investigate and determine the extra costs to be paid out of the fund. The work of the committee would commence as soon as the Dairy Board nominated its representatives. ) MILK PRODUCTS CONTRACT. | Mr Barclay said a contract had also been completed for the export of milk products. The contract provided for the purchase of 6,500 tons of skim milk powder, at £36 5s sterling per ton and approximately 2,000 tons of evaporated milk at 19s 9d sterling per case. Mr Barclay went on to refer to war risk insurance, which is to be covered by a Bill to come before Parliament this session, and the method of payment for dairj’ produce during the coming season. He discussed difficulties that might arise if there were delay in shipment and said, he was prepaxCd *o recommend to the Government the payment of fifty per cent two months after grading and the remaining fifty per cent four months after grading, on produce that had to be held in store. For the purpose of establishing equity between all manufacturing companies, he proposed that payment on shipment should be discontinued and that for the present season the standard formula of payment at two and four months should apply. 1 This was the fairest course. Mr Earclay mentioned that the latest information regarding the export of baconer pigs was that the United Kingdom Government would purchase 11,000 tons during the third year of war. Conditions were still being discussed.