MARKETING DEPARTMENT (EXPORT DIVISION) ANNUAL REPORT (ELEVENTH) AND ACCOUNTS FOR THE YEAR ENDED 31st JULY, 1947

Appendix to the Journals of the House of Representatives, 1948 Session I, H-30

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1947 NEW ZEALAND

MARKETING DEPARTMENT (EXPORT DIVISION) ANNUAL REPORT (ELEVENTH) AND ACCOUNTS FOR THE YEAR ENDED 31st JULY, 1947

Presented to both, Houses of the General Assembly pursuant to the provisions of the Marketing Act, 1936

CONTENTS

Accounts— pace Balance-sheet .. .. .. .. .. .. .. .. 56 Dairy-produce .. .. .. .. .. .. .. .. 45-47 Meat .. .. .. .. .. .. .. .. .. 48-53 Tallow .. .. .. .. .. .. .. .. .. .. 54 War Office Contracts .. .. .. .. .. .. .. .. 55 Agreement with Dairy and Meat Industries for Year ending 31st July, 1947 .. 3 Contracts between United Kingdom and New Zealand Governments for Second Post-war Year, 1946-47 .. .. .. .. .. .. .. .. ..3 Dairy Products Marketing Commission .. .. .. .. .. 7 General .. .. .... .. .. .. .. .. 3 Reports— Dairy-produce— Accounts .. .. .. .. .. .. .. .. .. 27 Casein .. .. .. .. .. .. .. .. .. 20 Completed Financial Operations for 1945-46 Season .. .. .. 4 Contracts, Long-term, with United Kingdom Government, 1944-50 .. .. 4 Costs Allowances, 1946-47 Season .. .. .. .. .. 13 Costs of Butter and Cheese Manufacturing Companies, 1946-47 Season .. ... 21 Exports : Quantities of Butter and Cheese exported .. .. .. .. 17 Grading— Quantities of Butter and Cheese graded .. .. .. .. 18 Quantities purchased for Export and paid for at Differential Prices .. .. 15 Guaranteed Prices — 1946-47 Season .. .. .. .. .. .. .. .. 12 1947-48 Season .. .. .. .. .. .. .. .. 14 Imports of Dairy-produce into United Kingdom annually during Years 1938 and 1942 to 1947 inclusive .. .. .. .. .. .. .. .. 25 Payments made by Dairy-factory Companies for Butterfat-supplies .. .. .. 20 Processed Milk .. .. .. .. .. .. .. 19 Production of Dairy-produce in New Zealand Dairy Factories .. .. .. 19 Publicity in United Kingdom .. .. .. .. .. .. .. 22 Rationing Emergency Regulations as applied to Butter and Cheese, Effect of .. 18 Allocation to Markets outside the United Kingdom .. .. .. 5

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Reports—continued page Hides : Report of Hides Committee oh Operations for Year ended 31st March, 1947 .. 39 Linen Flax .. .. .. .. .. .. .. .. .. 43 Meat — Accounts .. .. .. .. .. .. .. .. 37 Acknowledgment .. .. .. .. .. .. .. 34 Canned Meat .. .. .. .. .. .. .. .. .. 33 Contract, Long-term, with United Kingdom Government, 1944-48, and its extension to 1950 .. .. .. .. .. .. .. .. .. 27 Freezing Company: Subsidies .. .. .. .. .. .. 34 Killings for Export, 1946-47 Season .. .. .. .. .. .. 32 Pig-meats .. .. .. .. .. .. .. .. .. 27 Prices, Opening Schedule paid to Farmers, 1946-47 .. .. .. .. 31 Prices, Purchase paid to Freezing Companies and Meat-exporters, 1947-48 .. .. 30 Purchase and Sale Procedure and Prices paid for 1946-47 Season Meat purchased by Marketing Department for Export .. .. .. .. .. .. 31 Rationing Emergency Regulations as applied to Meat, Effect of .. .. .. 34 Shipments to United Kingdom, 1941-42 to 1946-47 .. .. .. .. 33 Shipping and Storage .. .. .. .. .. .. .. .. 33 Survey of Season .. .. .. .. .. .. .. .. 32 Pickled Sheep and Lamb Pelts .. .. .. .. .. .. .. 42 Tallow — Accounts .. .. .. .. .. .. .. .. 39 Purchases by New Zealand Government, 1946-47 Season, from New Zealand Manufacturers .. .. .. .. .. .. .. 38 Purchases by United Kingdom Government—--1946-47 Season .. .. .. .. .. .. .. .. 38 1947-48 Season .. ~ .. .. .. .. a .. 39 Statistics .. .. .. . . .. .. .. .. 38 War Office, Sundry Supplies to — Accounts .. .. .. .. .. .. .. .. .. 43 Value of Shipments .. .. .. .. .. .. .. .. 43 Woolly Sheep-skins .. .. .. .. .. .. .. .. 42 Shipments to Markets outside the United Kingdom .. .. .. .. .. 18 Volume and Value op Sales by the Department op Products for Export por Twelve Months ended 31st July, 1947 .. .. .. .. .. .. .. 44

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REPORT

Sir, — I have the honour to submit the annual report and statement of accounts of the Marketing Department (Export Division) for the year ended 31st July, 1947. This report relates to the 1946-47 production season (the second post-war year), and the transactions in respect of dairy-produce, meat, tallow, woolly sheep-skins? hides, and linen flax are reviewed under the appropriate headings. I have, &c., Gr. M. POTTINGER, The Hon. the Minister of Marketing. Acting-Director. CONTRACTS BETWEEN THE UNITED KINGDOM AND NEW ZEALAND GOVERNMENTS FOR THE SECOND POST-WAR YEAR, 1946-47 Details of the four-year contracts (1944 to 1948) for butter, cheese, and meat were given in the 1945 report, and details of the extension of the contracts to 1950 in last year's report. In terms of the contracts, notice was given that the New Zealand Government desired reconsideration of the price and terms of the contract for dairy-produce, but of the terms only in the case of meat, and discussions were held with the Milk Products Division and Imported Meat Division of the United Kingdom Ministry of Food. In these discussions, Mr. Gr. A. Duncan, Chairman of the New Zealand Wool Disposal Commission, who was in London at the time, represented the New Zealand Government, together with Mr. H. E. Davis, and Mr. N. S. McClumpha, of the New Zealand Marketing Department in London, also Mr. L. C. Webb, Director of Stabilization. At the request of the New Zealand Government, Mr. W. E. Hale and Mr. A. Linton, Chairman and member respectively of the New Zealand Dairy Board, took part in the discussions, together with Mr. A. H. Ward, of the New Zealand Dairy Board, and Mr. S. A. Chisholm, London Manager of the New Zealand Meatproducers' Board. Details of the amended prices and terms agreed upon for the 1947-48 season are given in the appropriate sections of this report, as are also the contract prices and terms for tallow and other products handled by the Department. AGREEMENT WITH DAIRY AND MEAT INDUSTRIES FOR YEAR ENDING 31st JULY, 1947 In last year's annual report was set out the general terms of the agreement with the Dairy and Meat Boards in respect of debits to the . Industry Stabilization Accounts for the year ending 31st July, 1947. No schedule of actual debits has yet been approved, and meantime the distribution between the Dairy and Meat Accounts is the same as for the 1945-46 period.

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DAIRY-PRODUCE REVIEW OF COMPLETED FINANCIAL OPERATIONS FOR THE 1945-46 SEASON The accounts presented with the report for the 1945-46 season covered purchases and sales of butter, cheese, and processed milk by the Department up to 31st July, 1946. These purchase and sale transactions showed a surplus of £1,091,761. The final results of the operations for the complete season were — £ £ Surplus on creamery butter .. .. 106,739 Surplus on cheese .. .. .. 763,327 Surplus on whey butter .. .. .. 14,236 Surplus on processed milk .. .. 2,544 886,846 Less excess storage charges .. .. .. 20,444 866,402 Add— Interest on investments .. .. 108,085 Transfer from Internal Marketing Division (Butter Equalization Account) .. .. .. 140,118 248,203 Net surplus for 1945-46 season .. £1,114,605 LONG-TERM CONTRACTS, 1944-50, BETWEEN THE UNITED KINGDOM AND NEW ZEALAND GOVERNMENTS FOR PURCHASE OF THE EXPORTABLE SURPLUSES OF BUTTER AND CHEESE FOR THE PRODUCTION PERIOD IST AUGUST, 1944, TO 31ST JULY, 1950 In last year's annual report particulars were given of the agreement in respect of prifees and conditions for the season 1946-47 and of the extension of the contract agreements until 3lst July, 1950. As a result of the discussions in London in August and September, 1947, as referred to on page 3, an agreement in respect of prices and conditions for the season 1947-48 was reached in terms of the following letters exchanged between the New Zealand Government and the Ministry of Food : Letter dated 15th December, 1947, from United Kingdom Minister of Food to the High Commissioner for New Zealand read as follows I am glad to hear that the negotiations about the prices, terms, and conditions for the purchase of New Zealand butter and cheese of the production season 1947-18 have now been satisfactorily concluded. I understand it has been agreed that the existihg Heads of Agreeihent shall remain in force subject to an exchange of letters between us detailing certain modifications which are to be taken in conjunction with these Heads of Agreement and which I now outline : 1. Price.—lt was agreed that in respect of all shipments from the production season commencing Ist' August, 1947, and ending on 31st July, the following prices shall be substituted for those appearing in Schedules I and II of the Heads of AgreementSterling per Hundredweight delivered f.o.b. Ocean Steamer. (a)' Butter*— s. d. Creamery Finest Grade 93 points and over .. .. .. .. 205 ■ 0 Creamery First Grade 90-92j points .. .. .. .. 203 9 Creamery Secbiid Gtade .. .. .. .. .. .. 200 0 Whey First Grade .. .. .. .. .. .. 197' 0 Whey Second Grade .. .. .. .. .. .. 193 0 (b) Cheese — Finest and First Grade 91 points and over .. .. .. ..1180 Second Grade .. .. .. .. .. .. .. 116 0

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Consequential amendments to the Schedules arising from these revised figures will be arranged between our respective officers. 2. Sales to Markets other than, the United Kingdom.—While our need for the maximum quantities of butter and cheese is well known to you, it was agreed that some regard must be given to supplies to other markets particularly those where New Zealand enjoys an established trade. Under these circumstances it was decided that, in addition to sales within the limits of the calendar year programmes to certain specified destinations which are governed by established procedure, New Zealand should also be at liberty to reserve for sale at her own discretion from 1947-48 seasons production up to: 1,500 tons of butter and up to 1,000 tons of cheese. I take this opportunity of confirming that the intentions expi*essed in my letter of the 2nd August, 1946, as regards (a) the period of the contract, (b) the relative volume of supplies of butter and cheese, (c) the distribution of New Zealand butter and cheese in the United Kingdom, and (d) the discontinuance of margarine rationing, still continue unchanged. I am informed that in consequence of the Dairy Products Marketing Commission Act, 1947, the New Zealand Government desires to assign its rights and liabilities under the agreements entered into with the United Kingdom Government for the sale and purchase of butter and cheese to the New Zealand Dairy Products Marketing Commission, and I confirm that the United Kingdom Government agrees to such assignment. In conclusion I should like to express my thanks for the helpful and understanding attitude which New Zealand has taken throughout these discussions. The terms of the contract were approved by the Dairy Products Marketing Commission, referred to on page 7. ALLOCATION OF BUTTER AND CHEESE TO MARKETS OUTSIDE THE UNITED KINGDOM In last year's annual report reference was made to the arrangements under which shipments of butter and cheese could be made to countries outside the United Kingdom, and to the fact that this was now the subject of agreement with the United Kingdom Ministry of Food. Global allocations for the calendar year 1947 were made to the following destinations by the Ministry of Food

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— Butter. Cheese. Ghee. British Caribbean area— Tons. Tons. Tons. Bahamas 180 60 Barbadoes 240 48 Bermuda 250 150 British Guiana 400 184 British Honduras 90 53 Jamaica 475 281 Leeward Islands 106 62 Trinidad 850 330 Windward Isles — Dominica 6 7 Grenada 45 23 St. Lucia 45 20 St. Vincent 57 6 British Borneo 24 1 Burma 160 35 300 (a) Ceylon 564 324 240 (6) Falkland Islands 32 4 Fiji 23 18 89 (c) Gambia 5 4 Gibraltar 90 (d) 6 162 (d) Gilbert Islands 1 Gold Coast 84 19 Hong Kong 5 22;(e) 254(f); India 215 (c) 760 (c) India (civil canteen stores) 80 , . Kenya-Uganda

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SHIPMENT OF BUTTER AND CHEESE TO MARKETS OUTSIDE THE UNITED KINGDOM—continued

Notes. —(a) Ex India. (6) Ex Australia. (c) 50 per cent, each Australia - New (d) Including ships' stores requirements. (e) Including 95 tons for Admiralty. (/) Including 50 tons for Admiralty. (g) 300 tons Australia - New Zealand, balance India. . The qualification for shipment to these countries was that a duly authenticated import licence should be issued by the importing country before an export licence was issued by the supplying country. It should be noted that the destinations named were all dependent pre-war on the importation of butter and cheese to meet their necessary requirements. The quantities named were the maximum they could obtain from all sources of supply, and New Zealand was free to supply these destinations, provided the orders could be obtained.

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!' ■ •'» I. : . : — Butter. Cheese. Ghee. Tons. Tons. Tons. Malaya 700 200 1,000 (g) India (ships' stores) 50 25 Malta 360 720 Mauritius 200 52 "50 Middle East — Aden 36 12 Cyprus 20 Cyrenaica 1 Egypt 50 Egypt (ships' stores) 210 90 Eritrea Ethiopia French Somaliland 10 2 Iraq 2 20 Lebanon Palestine 1,500 1,000 Persia Saudi Arabia 5 10 Sudan 5 10 Syria Trans jordan Tripolitania New Hebrides "34 7 Nigeria 1 23 Northern Rhodesia 268 22 Nyasaland 2 16 Oil companies— A.I.O.C., Abadan 46 46 83 (b) Iraq Petroleum 44 38J 100 (b) Kuwait Oil Co. 3 3 35 (b) Texas Oil Co., Bahrein 5 9 Shell Petroleum — Curacao 7 Netherlands East Indies 15 St. Helena-Ascension 8 "l3 Sarawak 12 1 Seychelles 12 3 Sierra Leone 77 17 Solomons 5 1 South Africa 50 [ Southern Rhodesia *350 Tanganyika Tonga .. .. .. .. 16 3 Zanzibar 29 3 I Total .. .. .. 8,502 5,332i 1,897

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In addition, New Zealand was free to supply 500 tons of butter and 500 tons of cheese to any destination that she might decide upon. Australia was put on a similar basis. Quantities exported by New Zealand are set out under the heading of " Quantities of Butter and Cheese exported." DAIRY PRODUCTS MARKETING COMMISSION It appears desirable to open this section with the address of the Right Hon. the Prime Minister to the Dominion Dairy Conference on 17th April, 1947, when the proposals for a Commission were considered by the delegates : The Prime Minister said he was very glad to have the opportunity of meeting the representatives of the dairy industry from the whole of the Dominion, and to discuss with them matters of fundamental importance not only to the dairy industry, but to the whole Dominion, and, further, not only to New Zealand, but to the Mother-country as well. At the present moment the Mother-country was in difficulties, and he felt sure that they all wanted to rally round and help her. The Government would shortly be announcing a contribution towards a fund for the relief of those who suffered the very extensive flood damage in Britain. The flooded areas in Britain—and they were mostly rural areaswere very hard hit, and he hoped it might be possible for the farming industry in New Zealand to help their fellow-farmers in the United Kingdom. It would be very difficult to exaggerate the importance of the work of the Conference, or the importance of the Government's proposals which had found favour with the Conference. The Government went to the country with a programme contained in the election manifesto, and was re-elected by a small margin. Part of that programme was that the question of marketing of dairyproduce should be reconsidered, and the present methods realigned and altered. It would, he thought, be worth his while reading the policy with regard to the dairy industry on which the Government went to the country. That section of the Labour Party's election programme read as follows : " The basis of the Labour Government's policy towards the dairy industry continues to be the guaranteed price, which in the years since its inception has brought to dairy-farmers a degree of prosperity and economic security without parallel in the industry's history. The Labour Government believes that the dairy industry as a whole desires to retain the guaranteed price as the sheet-anchor of its welfare. "As a result of experience over the last few years, however, the Labour Government believes that two beneficial changes can be made in the guaranteed price set-up. The first of these changes is in the direction of removing the actual fixing of the price from an atmosphere of bargaining and negotiation. The essence of the guaranteed price is that it should be adequate to cover the farmers' costs and to provide them with a reasonable standard of living—a standard of living which will rise steadily along with the general living standards of the community as a whole. Investigations into the cost structure of the dairy industry have now been carried sufficiently far to make it possible to hand over to an independent tribunal the task of determining the guaranteed price from season to season. It is accordingly the Government's intention to set up for this purpose a tribunal consisting of two industry representatives and two Government representatives, with an independent Chairman. " The second change proposed concerns the marketing of dairy-produce. It is the Labour Government's desire that the representatives of the dairy industry, who have a wide and valuable knowledge of its problems, should participate directly in marketing. It is therefore proposed to set up a Dairy Produce Marketing Authority, to which will be appointed Government representatives and representatives chosen by the dairy industry. The Chairman of this Authority will be appointed by the Government after consultation with the industry. Since the Government bears the main financial liability in connection with the guaranteed price, it must retain its voice in marketing; but the new arrangement proposed here will be the means of inaugurating a fruitful partnership between the Government and the industry in the marketing of dairy products. " The details of these proposed changes will, of course, be discussed with industry representatives before being put into effect." That was the election programme on which the Government was returned, continued Mr. Fraser. It was incumbent on the Government to discharge its obligations undertaken to the electors of the country in regard to the dairy industry at the earliest opportunity. That opportunity arose when he (Mr. Fraser) received a letter from Mr. Hale that the industry wished to discuss matters with him, mainly prices, particularly in view of the extension of the principle of the forty-hour week in many directions. The urgency of the need for discussion was stressed in the letter. He (Mr. Fraser) thought, and Cabinet concurred, that the receipt of that letter would give an opportunity for reviewing, if the representatives of the dairy industry were agreeable, the whole position in respect to the purchasing and marketing of dairy-produce, and the relationships between the Government and the dairy industry.

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It was also a favourable opportunity for the Government to put forward to the industry proposals along the lines of the programme on which it was elected. Negotiations were opened up, the Government representatives being Messrs. B. C. Ashwin, G. M. Pottinger, L. C. Webb, and F. P. Walsh. They met the leaders of the industry and had discussions. It became very clear to the representatives of both Government and industry—and they had passed that opinion on to himself, and he in turn had discussed the matter with Cabinet —that the work which they thought would require two Boards expressed in the Labour Party's manifesto could be done effectively by one authority. The Government had had quite an open mind on this aspect of the problem, so long as what was proposed did not mean something contrary to the proposals in the election programme to which it was pledged, and was acceptable to the industry. The Government had been quite prepared to consider anything reasonable, and its answer was that if it was firmly established that one body could do the job of fixing the price and handling the produce, obviously there was no need for two separate bodies. While every one would be enthusiastic about making two blades of grass grow where one grew before, nobody would want two Boards where one would do the job. The Government therefore told the Committee to proceed, so long as it was satisfied that what was proposed would not be a violation of the pledges it had made. The results of the Committee's work, as adopted by the Government, had been placed before the Conference the previous day and before members of the Government a day or two earlier as the Government's plan. Mr. Hale, in his short summary of the proposals, touched upon the main principles that had been agreed upon. Mr. Hale had also wanted elucidation on one or two points, and he would deal with one forthwith, because the answer was contained in a reply to a letter he had received from Mr. Hale. Mr. Hale's letter read as follows : " The Right Hon. the Prime Minister, " Parliament Buildings, " Wellington. " Dear Sir, — " In recent weeks a committee of the Dairy Industry Council has been discussing with representatives of the Government proposals for the establishment of a Commission to fix the guaranteed prices and to market dairy-produce. At this stage, there is one point on which we think it desirable to seek clarification from the Government. As you will be aware from my letter of January 31, 1947, the demand has been made that farmers and farm workers be placed on the same basis as other sections of the community as regards the 40-hour week and payment for Saturdays, Sundays and statutory holidays. Furthermore, it has been asked that the price for the current season be reconsidered in the light of this factor. " The Dairy Industry Council, having discussed the proposals, desire me to ask if the powers of the proposed Dairy Industry Commission will enable it to review the current season's price, regard being had to the developments which have taken place concerning the 40-hour week. " Yours faithfully, " (Signed) W. E. Hale, " Chairman, " Dairy Industry Council." In reply to Mr. Hale's letter, he had written the following;— " The Chairman, " Dairy Industry Council, " Wellington. " Dear Mr. Hale, — " In reply to your letter of April 15th, 1947, I desire to point out that the proposed Dairy Industry Commission will be empowered to determine the guaranteed price. The formula by which this price is to be determined will provide that the Commission shall take into consideration, among other things—- " The general standard of living of persons engaged in the dairy industry in comparison with the general standard of living throughout New Zealand. " In recent months action taken by the Government has extended the benefits of the 40-hour week ; and these developments could be taken into account by the Commission in the practical application of the passage quoted above. Moreover, it would also be competent for the Commission to reconsider the price for the 1946-47 season in the light of these considerations. Authority for the Commission to do this will be included in the legislation to be submitted to Parliament. " Yours faithfully, " (Signed) P. Fraser, " Prime Minister."

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Continuing, Mr. Fraser said he thought that letter was quite clear, and without any ambiguity. The matter would be in the hands of the Commission. As regards the legislation, this, of course, would be submitted to the Dairy Board before being introduced, and the Board would satisfy itself that the legislation contained the provisions that the Government and the industry had agreed to. That, of course, must be done, and there would be no deviation from it. The agreement had been arrived at in good faith, and both parties must be satisfied that the agreement was implemented in the legislation. They would ask the Law Drafting Office to go ahead with the job as early as possible, and it might be practicable to have the legislation brought before the House of Representatives earlier than was usual, by agreement with the Opposition. If both sides of the House agreed, the Address in Reply debate could be interrupted for that purpose. He would undertake to expedite the legislation as far as possible, and in the meantime, before it was introduced to Parliament, the draft could be approved by the Government and the Dairy. Board as embodying the agreement. The matter, in his opinion, was so important, and so momentous for the future of the industry and the country, that there was no room for any doubt whatever arising when the legislation was brought down. Any shadow of misunderstanding, even if such could arise, should be removed prior to the introduction of this legislation, but the proposals were so clear that he could not imagine any misunderstandings arising. He thought it would be a comparatively simple matter to have the proposals translated into the proper effective legislative terms. The industry had formulated a marketing scheme and part of the industry's proposals was embodied in the present Government plans. No Government or people who believed in progress could ever come to the conclusion that decisions arrived at at a particular time were necessarily final and immovable. They must be moving forward politically as well as economically. It was the duty of Governments, as of individuals, to learn from experience. He personally considered that the present proposals for partnership between the Government and the industry was a very considerable step forward in industrial democracy. Neither he nor his party had the conception of building up a bureaucratic State or even one that, with parliamentary representatives elected every three years, would leave an army of public servants to govern the people. That conception was purely imaginary. They could not possibly endure that sort of thing. If they were ever to have an industrial democracy, the people engaged in producing the wealth of the country must have some say in its production and its realization. That was the position as he saw it, and as he believed his party saw it. The proposed plan was a step forward in the right progressive direction. Whether the scheme would prove successful or not depended on the selections of members of the •Commission made by the industry and the Government. He wanted to congratulate those responsible for the drafting of the proposals, for in them they had the widest and most co-operative field for careful selection. The industry would put forward a panel of six men whom it could trust, and the Government would select three men whom it thought most suitable from among those six. The Government would inform the industry whom it wanted to appoint as its three representatives, and the industry would have the opportunity of discussing those appointments. Every effort would be made to have unity on the personnel, including the Chairman. After all, unless the Commission to be set up carried the trust of the industry and the Government, it was doomed to failure from the start, and therefore every possible effort would be made to get a body that was wholly acceptable. The Commission would; have the responsibility of fixing the guaranteed price. In that respect there would be no provision for either Governmental or Ministerial direction. The Government's election manifesto had promised an independent tribunal. Therefore, if this one body was to do the whole job, it must have the necessary, powers of a tribunal in regard to the guaranteed price. There is a provision in the agreement that if" the wheel turned as it seemed to be doing in the case of their primary products, the world markets began to fall, and if the Commission had come to the conclusion that the price it was going to fix was fair, but that the money available would not be sufficient without Government financial assistance, it would notify the Government and discuss the matter with the Government before it fixed the price. The Government would be made aware of the situation, but even then the Government would leave the responsibility for fixing the price to the common-sense and judicial capacity of the Commission. He was not going to deal with the marketing provisions to any extent, except to say that quite obviously the present Marketing Department would be used for a period, but that if the new Commission wished to reorganize, then it would be competent for if to do so. They did not want a Commission to be set up without having adequate authority, because without that it would fail in its work. The Government wanted the Commission to be set up to feel that it had full authority, subject ■only to Government policy. That policy included stabilization and overseas marketing arrangements. Until 1950 they had a Government-to-Government contract with the United Kingdom, but so far as marketing generally, subject to and within the scope of Government policy and price fixing, were concerned, those would be the responsibility of the Commission. He did not think he need say anything else, because he thought he had answered Mr. Hale's questions. Physical control of the produce, the fixing of the guaranteed price, transport arrangements, and such questions of detail as whether the price should be paid for the butter in store or f.o.b. were all to be matters for the Commission, in the same way as they had up till now been matters for the Export Marketing Department.

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He had already explained that the 1946-47 price could be reviewed by the Commission and that all factors could be taken into consideration. He would like to express the hope that, while he did not know whether the new proposals would remove the industry entirely from politics, it would lend itself less to party politics. Apart from those associated with Government policy, there would be no directive from the Government in regard to details. In price fixing, the Commission would not be under direction, but it would be under an obligation to consult and discuss with the Government if the financial position was such that the proposed guaranteed price could not be met from the financial returns from overseas. That provision was just plain common-sense. He thought the proposals were not only important to the industry, but that it would also be an example to the country generally of co-operation in practice. He was not going to enter into any discussion regarding the present economic and industrial situation except to say that they all saw tendencies in many directions that might shake the very foundations of the country. He was just going to say this : that there must be a stopping-place to anti-social action, from whatever quarter. The conscience of the people of the country would not long tolerate the various groups who were repeatedly threatening to coerce the community. No country could survive economically—and if it could not survive economically it could not survive socially—unless there was a realization among all sections of their responsibilities in pulling their weight in the industrial life of the country. He was not going to blame any one section, but was going to say that all required to have a sense of deep responsibility in discussing economic matters and determining questions of prices and wages and allied questions. It would be very easy for the Government to remove stabilization and all other restrictions, and let prices and wages and farm returns and profits and dividends soar. They would mount up like a fountain, and then would collapse like a fountain when turned off, and there would be widespread suffering. The alternative, and the only alternative, was co-operation. The Government could use restrictive measures and could establish itself as a dictatorship and use force. Occasionally the use of compulsion and even force was unavoidable, but its constant use was not a sensible or successful policy, and unless the common-sense and conscience of the people of the country as a whole were awakened, then the economic life of our land would collapse. It was their individual and collective responsibility to endeavour to institute a system of co-operation, and in that respect he personally would like to see industrial workers and farmers getting together and discussing matters frankly, friendly, and plainly in regard to each other's responsibilities. For. instance, how could their markets be maintained unless the commodities produced were sent away from the country as quickly as possible ? The first condition of success was co-operation from all concerned. The Government would put the agreement into legislation, and a new phase in relationship between the Government and the dairy producers would be commenced and be an example of the proper attitude to be taken by all if the country was to go on as they wanted it to go on from prosperity to prosperity. The proposals referred to by the Prime Minister and placed before the Conference were as follows : It is recommended by a joint Committee comprising representatives of Government and of the dairy industry that—(l) There shall be appointed a Commission to be called the New Zealand Dairy Commission. (2) The Commission shall consist of seven members to be appointed by the Governor-General on the recommendation of the Minister of Marketing, of whom—(a) Three members shall be appointed on the nomination of the Minister after consultation with the New Zealand Dairy Board : (b) Three members shall be appointed from a panel of six names nominated by the New Zealand Dairy Board; and the Minister shall consult the said Board before recommending to the Governor-General: (c) A Chairman shall be appointed on the nomination of the Minister after consultation with the New Zealand Dairy Board. (3) The Commission be a body corporate. (4) (i) The Chairman of the Commission shall be appointed for a term of five years, the retiring Chairman to be eligible for reappointment as Chairman or as a member of the Commission. Any appointment to fill an extraordinary vacancy shall be for a term of five years. (ii) The first appointment of members of the Commission shall be for a term not exceeding five years : Provided that at the end of the third year two members to be selected by ballot shall retire, and similarly two original members (or persons appointed to complete a term of office of original member) shall retire by ballot at the end of the fourth and fifth years respectively ; and also provided that of the two members retiring at the third, fourth, and fifth years respectively, one shall be a member appointed on the nomination of the Minister and one a person appointed on the nomination of the Niw Zealand Dairy Board.

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(iii) Appointment of members shall be for a term of five years : Provided that extraordinary vacancies shall be filled for the unexpired term of appointment of the member being replaced. (iv) For appointments of members nominated by the New Zealand Dairy Board (other than the original appointment), the New Zealand Dairy Board shall nominate a panel of two names for each vacancy, from which the Minister shall recommend the appointment after consultation with the New Zealand Dairy Board. Similarly, where an appointment of a Government nominee is required to fill a vacancy, the Minister shall consult the New Zealand Dairy Board. (v) Every member shall hold office until his successor is appointed. (vi) Retiring members of the Commission shall be eligible for reappointment either as members or as Chairman. (vii) The Chairman of the Commission shall not—(a) Be a member of either House of the Legislative Assembly : (b) Be a member of the New Zealand Dairy Board : (c) Hold any other paid office under the Crown or from any other statutory corporation : (d) Be concerned or interested (other than as a member in an incorporated company under the Companies Act or Friendly Societies Act) in any commercial undertaking. (viii) Members of the Commission shall not—(a) Be members of either House of the Legislative Assembly ; or (b) Be members of the New Zealand Dairy Board. (5) That section 17 (2) of Primary Products Marketing Act be repealed, and that the Commission be given powers to make such arrangements as it thinks fit—(a) For the handling, pooling, transport, and storage of any dairy-produce to which this Part of this Act applies : (b) For the shipment of any such dairy-produce that is intended for export, on such terms and in such quantities as the Commission thinks fit: (c) For the insurance against loss of any such dairy-produce : (d) Generally for all such matters as are necessary for the exercise of any of the powers herein expressly conferred: (e) For the sale of dairy-produce to the best advantage. (6) Repeal section (18) of Primary Products Marketing Act and vest authority in Commission to purchase at f.o.b. all butter and cheese for export. (7) That provision be made for regulating local market costs and distribution. (8) That the Commission be given power to determine the guaranteed price by re-enacting section 20 (4) and (5) of Primary Products Marketing Act. (9) Clause (8) above to be subject to proviso that in determining prices Commsision will have regard to the general economic stability of New Zealand. (10) The price determined by the Commission for any season shall be guaranteed by the Government. (11) If the Dairy Industry Account is in debt, or if the estimates for the ensuing season indicate the possibility that the account may be in debit, then the Commission shall consult with the Minister of Marketing before fixing the guaranteed price for the ensuing season. (12) That the Commission should have the responsibility of tendering advice to Government—(a) On trends and prospects in overseas markets : (b) On movements in costs, prices, or other factors likely to prejudice economic stability of the dairy industry. (13) That in the exercise of its functions, with the exception of those in (8) and (11) above, the Commission shall comply with the general trade policy of the Government and with any general or special directions issued by the Minister in terms of Government policy. (14) Commission may delegate any of its functions, save that of determining the guaranteed price, to an agent or agents, whether in New Zealand or overseas. Authority to be given Export Marketing Department to act as agent. (15) That the transfer of Dairy Industry Account, including the Dairy Industry Stabilization Aceount, to the custody of the Commission be authorized. (16) That Commission shall present an annual report to Parliament. The Conference then unanimously carried the following motion : " That Conference approves the general principles providing for the setting-up of the Dairy Industry Commission, as placed before it by the Dairy Industry Council, subject to the Dairy Board being (a) satisfied with the draft legislation, and (b) fully consulted regarding all matters affecting the setting-up of the Commission, its authority, and its functions."

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The final draft of the legislation was unanimously approved by the representatives of the dairy industry, and the Dairy Products Marketing Commission Act was passed on 31st July, 1947. Under the Act a Dairy Products Marketing Commission was •set up consisting of seven members appointed by the Governor-General on the recommendation of the Minister of Marketing, as under : One member to be Chairman. Three members to be selected from a panel of names submitted by the New Zealand Dairy Board. Three other members. The Commission was to take over all the functions of the Export and Internal Divisions of the Marketing Department in respect of butter and cheese sold on the local market or exported from New Zealand, subject only to the Commission complying with the general trade policy of the Government. In addition, to the Commission was delegated the responsibility of fixing the guaranteed price after giving regard tothe same considerations as had been set out in section 20 of the Marketing Act, 1936, provided always that if the accounts of the Commission disclose a debit or are likely to disclose a debit within the succeeding twelve months, the Commission, before it fixes prices, must consult the Minister of Marketing. The following members of the Commission were appointed on 7th August, 1947 : Chairman: Mr. W. Marshall. Messrs. H. E. Blyde, A. M. Candy, W. GMcCartney, B. C. Ashwin, C. Morgan Williams, and F. P. Walsh. At its first meeting on 26th August, 1947, the Commission appointed as General Manager the Acting Director of Export Marketing, Mr. G. M. Pottinger, and as Secretary, Mr. F. Lingard, Secretary to the Economic Stabilization Commission. Pending the appointment of a complete staff, the Commission agreed to appoint the Export and Internal Divisions of the Marketing Department to act as its agents, GUARANTEED PRICES, 1946-47 SEASON The guaranteed purchase-prices paid to dairy companies by the Marketing Department for butter and cheese manufactured during the 1946-47 season and exported were : Creamery Butter —- Pence per Finest Grade — Pound. 94 points and over .. .. .. .. 15 • 515 93 to 93| points (basic price) .. .. .. 15-39 First Grade—--92 to points .. .. .. .. 15-3275 90 to 91| points .. .. .. ..15-14 Second Grade .. .. .. .. .. 14 •64 Whey Butter — First Grade .. .. .. .. ..13-89 Second Grade .. .. .. .. .. 13-39 Cheese — Finest Grade — 94 points and over .. ' .. .. 8-88625 93 to 93| points .. .. .. .. 8 • 855 First Grade — 92 to 92-| points (basic price) .. .. .. 8-73 91 to 91-| points .... .. .. .. 8-6675 Second Grade .. .. .. .. .. 8-48 Note.—These purchase-prices for butter and cheese are the same as those applying: for the previous (1945-46) season.

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DAIRY-FACTORY AND FARM-COSTS ALLOWANCES PAYABLE FOR THE 1946-47 SEASON The report of the Department for last year (ended 31st July, 1946) shows on pages 10 and 11 the costs allowances agreed to be paid (in terms of the stabilization procedure) for the 1946-47 season, after negotiations between the representatives of the dairyindustry and the Economic Stabilization Commission. Full details of the allowances were shown in the previous year's report just referred to, but for ready reference the short details are repeated hereunder : To butter-manufacturing companies for period Ist August, p ence per p oU nd 1946, to 31st July, 1947 : of Butterfat. A farm-costs allowance of .. .. .. ..2-675 A farm-labour allowance of .. .. .. .. 2-510 A factory-costs allowance of .. .. ..0-411 Total .. .. .. .. .. 5-596 To cheese-manufacturing companies for period Ist August, 1946, to 31st July, 1947 A farm-costs allowance of .. .. .. ..2-675 A farm-labour allowance of .. .. .. 2-510 A factory-costs allowance of .. .. .. 0-745 Total .. .. .. .. .. 5-930 In the previous year's report the standard resulting average payments by dairy companies to suppliers for butterfat for the 1946-47 season were estimated to be 21-8 d per pound of butterfat for butter-manufacture and 23-Bd. per pound of butterfat for cheese-manufacture. The actual resulting average payments were as follows : Pence per Pound Butter-manufacture — of .Butterfat. Payment for butterfat supplies .. .. .. 16-790 Add farm-costs allowance .. .. .. 5 • 185 Total .. .. .. .. .. 21-975 Cheese-manufacture — Payment for butterfat supplies .. .. .. 18-852 Add farm-costs allowance .. .. .. 5-185 Total .. .. .. .. .. 24-037

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Subsequently, in order to compensate dairy companies for the increased wages cost incurred by them under the provisions of the New Zealand Dairy-factory Employees' award which came into force during the season, an additional costs allowance was granted by the Government. This allowance was paid on all butter and cheese manufactured during the 1946-47 season, and was at the rate of 0-05 d. per pound of butterfat made into butter and O2od. per pound of butterfat made into cheese. GUARANTEED PRICES, 1947-48 SEASON For convenience of reference the following arrangements for the 1947-48 season, settled before publication of this report, are recorded. The fixing of the guaranteed prices for the 1947-48 season became the function of the Dairy Products Marketing Commission, and it decided to depart from the practice followed in the 1943-44 season and up to and including the 1946-47 season and combine the farm-costs allowances and production subsidies in the guaranteed price. The following statement was made by the Chairman of the Commission on 30th September, 1947 : Prices fob Butter and Cheese The New Zealand Dairy Products Marketing Commission has determined, under section 36 of the Dairy Products Marketing Commission Act, 1947, that by way of an increase in the farm-labour allowance an additional payment shall be made of l-716d. per pound on all butterfat in cream or miik supplied for butter and cheese manufacture from Ist November, 1946, to 31st July, 1947, making the total guaranteed price with allowances 23-391 d. per pound butterfat for that period. This will increse the farm-labour reward for each adult male unit of labour by 16s. 6d. per week, this amount being equal to 15 per cent, of the existing dairy-farm-worker's wage of £5 10s. per week ; it is being allowed specifically in respect of the fact that work has to be done regularly on dairy-farms at week-ends and on holidays, thereby applying to the dairy industry the general principle embodied in extension of the benefits of the forty-hour week, as now enjoyed by other sections of the community. Payment of the retrospective increase will be made by the Commission to dairy companies in the course of the next few days on returns already submitted. The Commission, having had regard to the provisions of section 16 of the Dairy Products Marketing Commission Act, has fixed the prices to be paid in respect of butter and cheese acquired by it and manufactured in New Zealand from the Ist August, 1947, to the 31st July, 1948, as follows : Ptirchase-prices Creamery butter — Pence per Finest Grade— Pound. 94 points and over .. .. .. .. .. 23 • 977 93 to 93£ points .. .. .. .. .. 23-852 (basic price.) First Grade—--92 to 92J points .. .. .. .. .. 23-7895 90 to 9lf points .. .. .. .. .. 23-602 Second Grade .. .. .. .. .. .. 23 • 102 Whey butter— First Grade .. .. .. .. .. .. 22 • 852 Second Grade .. .. • .. .. .. 22-352 Cheese — Finest Grade—--94 points and over .. .. .. .. .. 13-21825 93 to 93J points .. .. .. .. .. 13-187 First Grade—--92 to 92£ points .. .. .. .. .. 13-062 (basic price.) 91 to 91l points .. .. .. .. .. 12-9995 Second Grade .. .. .. .. .. .. 12-812

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It is estimated that these prices, which include an increase in factory-cost allowances, will enable -efficient dairy-factory companies to pay to suppliers 25-907 d. per pound for butterfat for buttermanufacture and 27-907 d. per pound for butterfat for cheese-manufacture. Pence per Pound The structure of the guaranteed price now becomes — of Butterfat. Interest on capital .. .. .. .. .. .. .. 3 • 240 Farm working and maintenance costs .. .. .. .. 10-011 Labour reward .. .. .. .. .. .. .. 14•196 27-447 Less standard allowance for pigs .. .. .. .. .. 1 • 540 Standard average " pay-out " to suppliers for butter-manufacture 25-907 The above price represents an increase in terms of butterfat of 2-516 d. on the adjusted figure for the period Ist November, 1946, to 31st July, 1947. It is made up of 0-52 d. for labour reward and l-996d. for farm working and maintenance costs. The increase in labour reward will provide for an additional ss. per week per adult male unit of farm labour. The total labour reward equivalent in farm workers' wages, including the allowance for board and lodgings, then become £5 15s. per week, to which must be added the 16s. 6d. allowance for work done at week-ends and holidays. The Dairy Board made representations to the Commission for an increase in the amount provided for board and lodging to be effective from the date of any retrospective increase in the labour reward. After consideration, the Commission decided to refer this matter, together with the modification of rates of wages necessitated by the increase in the labour reward to the Hon. the Minister of Labour, for submission to the parties concerned. The increase of l-996d. in farm working and maintenance costs makes provision for ascertained increases in costs and in accordance with Government policy costs, previously met by way of " subsidy." The largest factor in these increased costs arises from the passing into price of fertilizer subsidies, for which purpose there is an allowance of l-54d. per pound of butterfat. This, on 12,000 pounds of butterfat, provides an additional allowance for fertilizer of £77. This arrangement simplifies the position, and it can be taken that production costs on existing standards in the guaranteed-price structure are allowed for in the price and that there are no subsidies ■or farm and factory cost allowances. As early as the change can be arranged, payment will be made to dairy companies on the 20th of each month for butter and cheese graded during the preceding month. The existing uniform arrangement of debiting dairy companies with two months' storage will be ■continued, but payment is being made earlier for the purpose of assisting dairy companies in their finances. PREMIUMS FOR QUALITY, AND QUANTITIES OF BUTTER AND CHEESE PAID FOR AT DIFFERENTIAL PRICES Under the Dairy-produce Export Prices Order 1939 provision is made for additions to or deductions from the basic purchase-prices for butter and cheese according to quality a§. disclosed by the grading-points awarded to the dairy-produce. This system of price differentials provides a stimulus to the production of dairy-produce of higher quality. The following tables show for the 1946-47 season the quantities of butter and cheese purchased for export and paid for at the respective differential prices. For comparison purposes the totals for the previous five seasons are also shown.

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Creamery Butter (in Tons): Quantities purchased for Export and Paid for at Differential Prices

Whey Butter (in Tons): Quantities purchased for Export and paid for at Differential Prices

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Grading Ports. Total. Finest Grade. First Grade. Second Grade. 94 Points and over. 93 to 93J Points. (Basic Price.) 92 to 92£ Points. 90 to 91J Points. 1 Tons. Tons. Tons. Tons. Tons. Tons. Auckland 96,741 38,304 41,272 11,158 5,976 31 Dunedin 103 38 39 19 n Gisborne 1,323 "816 419 82 5 1 Lyttelton 1,387 605 660 106 16 Napier 851 210 558 59 24 New Plymouth 7,982 3,107 4,047 515 312 1 Patea 497 84 157 95 156 5 Timaru 296 10 264 17 5 Wanganui 1,949 912 802 191 44 Wellington .. 11,694 5,000 4,734 1,507 437 16 Grand totals— 1946-47 122,823 49,048 52,951 13,769 6,994 61 1945-46 100,290 33,384 45,658 13,039 7,919 290 1944-45 119,807 47,906 52,319 12,810 6,654 118 1943-44 98,648 38,821 43,659 9,666 6,320 182 1942-43 101,696 35,046 47,417 11,464 7,426 343 1941-42 100,432 40,497 40,106 9,507 9,043 1,279 Percentage of qualities— 1946-47 100 39-93 43-12 11-21 5-69 0-05 1945-46 100 33-29 45-52 13-00 7-90 0-29 1944-45 100 39-99 43-67 10-69 5-55 0-10 1943-44 100 39-35 44-26 9-80 6-41 0-18 1942-43 100 34-47 46-63 11-27 7-30 0-33 1941-42 100 40-32 39-93 9-47 9-00 1-28

Grading Ports. Total. First Grade. Second Grade. Tons. Tons. Tons. Auckland 479 172 307 Bluff .. 151 150 1 Dunedin 30 27 3 Lyttelton 26 26 New Plymouth 518 505 13 Patea 765 759 6 Wellington 374 313 61 Grand totals — 1946-47 2,343 1,952 391 1945-46 2,558 2,184 374 1944-45 2,783 2,582 201 1943-44 2,420 2,256 164 1942-43 2,257 2,095 162 1941-42 3,123 2,974 149 Percentage of qualities— 1946-47 100 83-31 16-69 1945-46 100 85-38 14-62 1944-45 100 92-78 7-22 1943-44 100 93-22 6-78 1942-43 100 92-82 7-18 1941-42 100 95-23 4-77 Butter figures calculated at forty boxes s to a ton.

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Cheese (in Tons): Quantities purchased for Export and paid for at Differential Prices

QUANTITIES OF BUTTER AND CHEESE EXPORTED The quantities of butter and cheese exported from the various grading ports of the Dominion are shown in the following tabulation:—

Butter and Cheese Exports from 1st August, 1946, to 31st July, 1947

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Finest Grade. First Grade. O J Grading Ports. Total. 94 Points 93 to 93£ 92 to 92 J 91 to 91J becona Grade. and over. 1 Points. i Points. (Basic Price.) Points. Tons. Tons. Tons. Tons. Tons. Tons. Auckland 14,888 32 1,180 6,577 4,730 2,369 Bluff 8,263 157 2,895 4,770 361 80 Dunedin .. 1,058 21 80 716 220 21 ■Gisborne 161 7 24 102 26 2 Lyttelton 954 355 581 18 Napier 65 3 19 34 4 5 New Plymouth 19,416 306 8,633 7,911 2,263 303 Patea 23,165 132 9,034 12,318 1,451 230 Timaru 660 8 343 283 22 4 Wanganui 2,233 19 275 1,078 819 42 Wellington 12,127 224 4,347 6,268 1,127 161 Grand totals— 1946-47 82,990 909 27,185 40,638 11,041 3,217 1945-46 86,785 1,140 20,831 47,502 13,292 4,020 1944-45 90,429 1,272 21,840 48,412 14,694 4,211 1943-44 81,544 820 17,768 45,966 13,150 3,840 1942-43 93,638 660 18,997 56,378 15,274 2,329 1941-42 150,127 1,051 28,097 69,703 38,676 12,600 Percentage of qualities— 1946-47 100 1-10 32-76 48-97 13-30 3-87 1945-46 100 1-31 24-00 54-74 15-32 4-63 1944-45 100 1-40 24-15 53-54 16-25 4-66 1943-44 100 1-00 21-79 56-37 16-13 4-71 1942-43 100 0-70 20-29 60-21 16-31 2-49 1941-42 100 0-70 18-72 46-43 25-76 8-39 Cheese figures calculated at fourteen crates to a ton.

Grading Ports. To United Kingdom. To other Destinations. Total Exports. Percentage. Butter. Cheese. Butter. Cheese. Butter. Cheese. Butter. Cheese. Auckland New Plymouth Patea Wanganui Wellington •Gisborne Napier North Island totals Lyttelton Timaru Dunedin Bluff South Island totals Dominion totals Boxes. 3,496,558 341,527 48,950 73,418 473,488 53,462 34,528 Crates. 210,379 276,963 311,606 28,753 163,756 2,255 906 Boxes. 305,749 8 joOO ' 561 Crates. 15,719 Boxes. 3,802,307 341,527 48,950 73,418 481,488 53,462 35,089 Crates. 226,098 276,963 311,606 28,753 163,756 2,255 906 77-15 6-93 0-99 1-49 9-77 1-08 0-71 19-46 23-84 26-81 2-47 14-09 0-19 0-08 86-94 4,521,931 994,618 314,310 15,719 4,836,241 1,010,337 98-12 66,588 14,865 5,371 6,002 14,182 9,483 13,827 114,405 66,588 14,865 5,371 6,002 14,182 9,483 13,827 114,405 1-35 0-30 0-11 0-12 1-22 0-81 1-19 9-84 92,826 151,897 92,826 151,897 1-88 13-06 4,614,757 1,146,515 314,310 15,719 4,929,067 1,162,234 100-00 100-00 Butter: Forty boxes equals 1 ton. Cheese : Fourteen crates equals 1 ton.

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BUTTER AND CHEESE GRADINGS

Note. —Owing to the diversion of supplies of butter and cheese in 1942-43 and later seasons to the Allied Forces in Pacific Area, a correct comparison between gradings for the 1942-43 and later seasons and gradings in .previous seasons is not possible.

NEW ZEALAND BUTTER AND CHEESE EXPORTS TO ALL COUNTRIES, OTHER THAN UNITED KINGDOM, AUGUST, 1946, TO JULY, 1947

EFFECT OF THE RATIONING EMERGENCY REGULATIONS AS APPLIED TO BUTTER AND CHEESE Butter The butter ration has remained unchanged during the year ended 31st July, 1947, consumption being limited to 6 oz. per head per week. The estimated annual saving of 13,000 tons during the year ended 31st March, 1947, has proved of definite assistance to the people of Great Britain, where the consumption of all fats is still severely restricted by rationing. Cheese Sales of cheese on the local market continue to be restricted to the levels of sales in the 1942-43 season.

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— Butter (Creamery). Cheese. Tons. Increase or Decrease on Previous Year. Tons. Increase or Decrease on Previous Year. Per Cent. Per Cent. 1946-47 124,328 22 • 64 (increase) 86,031 2-44 (decrease) 1945-46 101,373 17-15 (decrease) 88,185 14-048 (decrease) 1944-45 122,352 19-96 (increase) 95,548 11-787 (increase) 1943-44 101,992 4-60 (decrease) 85,473 11-735 (decrease) 1942-43 106,947 3-504 (increase) 96,837 36-738 (decrease)'/ 1941-42 103,326 25 • 90 (decrease) 153,074 28 • 74 (increase)

— Butter. Cheese. [ ' * Butter. Cheesy. Tons. Tons. Tons. Tons'. Aden 5 Nyasaland 10 Burma 60 1 Arabia 2 1 Oeylon 1 2 Bahrein .. 3 Cyprus 20 Egypt 69 Hong Kong 30 1 Palestine 20 India 386 187 China ' 50 •8 Malaya 60 9 French Indo-China 5 British West Indies 245 51 Philippines "i29 122 British Guiana 32 Portugese India 6 Canada 2^280 New Caledonia 4 3 Falkland Island 2 1 Society Islands 148 4 Fiji 22 15 Makatea 4 1 Nauru .. 1 Tutuila 10 Ocean Island 2 U.S.A. 4,309 Tonga 16 1 Zanzibar 1 Samoa 50 4 South Africa 56 7,845 645 Northern Rhodesia 41

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PRODUCTION OF DAIRY PRODUCTS IN NEW ZEALAND DAIRY FACTORIES The following figures are taken from the Census and Statistics Department's publications:—

Total Quantities of Butter and Cheese produced in New Zealand Dairy Factories (Factory Weights)

PROCESSED MILK In last year's annual report reference was made to long-term contracts concluded with the United Kingdom Ministry of Food for the exportable surpluses of skim-milk powder and evaporated milk for the four years 1944-48. Prices were fixed for the two years 1944-45 and 1945-46, and thereafter subject to annual review. Concurrently with the discussions in London in July, 1946, in respect of butter and cheese, prices and conditions were reviewed, and prices were fixed for the two remaining years of the contracts —namely, 1946-47 and 1947-48 as under : Shim-milk Powder: £66 10s. sterling per ton f.0.b., subject to the supply of a minimum of 8,000 tons during 1946-47 and 7,000 tons during 1947-48. Evaporated Milk: 245. sterling per case f.o.b. for 1946-47 season and 255. 4d. sterling per case f.o.b. for 1947-48 season for American standard (each case to contain 48 x 1 lb. tins), subject to the supply of a minimum of 250,000 cases during each of 1946-47 and 1947-48 seasons. The equivalent of the above prices in New Zealand currency is paid to manufacturers less \ per cent, to cover the Department's administrative expenses. , The quantities and values of purchases by the Department for the twelve months ended 31st July, 1947, were : ,Weight. Value. ■ • Cases. Tons. £ Skim-milk powder .. .. 225,206 10,304 819,821 Evaporated milk .. .. 279,298 5,985 408,267 Note.—Of the skim-milk powder, 6,839 tons were shipped to the United Kingdom, with lesser quantities to India, Egypt, Celyon, and Hong Kong. Of the evaporated milk, 3,000 "tons were shipped to the United Kingdom, and the remainder to Malaya and Burma. . The Food and Rationing Controller's Office gives the following figures of total production of processed milk in New Zealand factories for the calendar year 1946 : —* , Tons. ~ > Whole-milk powder .. .. .. .. .. 3,947. Skim-milk powder .. .. .. .. ... 10,221 Evaporated milk (unsweetened) \ ; 1 : Condensed milk (sweetened) J Malted milk .. .. .. .. .. .. 283

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Season. Creamery Butter. Cheddar Cheese. Whey Butter. 1946-47 .. 143,000 93,000 2,700 . 1945-46 .. 123,972 94,530 2,737 1944-45 151,637 103,675 3,030 1943-44 133,650 92,149 2,747 1942-43 139,083 102,846 2,908 1941-42 129,854 157,659 3,910 1940-41 161,809 122,370 3,355

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Casein As referred to in last year's report, a contract was entered into with the United Kingdom Board of Trade for the exportable surplus of lactic casein available from the seasons 1946-47, 1947-48, and 1948-49 at a sale price of £lOO sterling per ton f.o.b. for each of the three seasons. A further contract was entered into with the United Kingdom Board of Trade for rennet casein, as under : 250 tons, 1946-47 season, at £2OO sterling per ton f.o.b. 950 tons, 1947-48 season, at £l5O sterling per ton f.o.b. 950 tons, 1948-49 season, at £lOO sterling per ton f.o.b.

The quantities and values of shipments for the twelve months ended 31st July, 1947, were as follows:

PAYMENTS MADE BY DAIRY-FACTORY COMPANIES FOR BUTTERFATSUPPLIES The following tabulation shows the average butterfat-prices paid to suppliers of butter- and cheese-manufacturing companies. It should be borne in mind that when making comparison of butterfat payouts of companies it is necessary to take into consideration the location of the factories and special circumstances pertaining to individual companies, as those factors reflect appreciably on manufacturing and transport costs Payments by Dairy Companies for Butterfat-supplies (In pence per pound of butterfat) New Zealand average— Butter. Cheese. 1946-47 season .. .. .. 16-790 18-852 +5-185* +5-185* 2l-975 24-037 1945-46 season .. .. .. 16-664 18-980 +3-904* +3-904* 2O-568 22-884 1944-45 season .. .. •• 16-903 19-168 +2-887* +2-887* l9-790 22-055 1943-44 season .. .. .. 16-830 18-888 +O-767* +O-767* l7-597 19*655 1942-43 season .. .. .. 16-569 18-577 1941-42 season .. .. .. 16-017 48^025 1940-41 season .. .. .. 16-106 18-043 1939-40 season .. .. .. 16*179 18-091 1938-39 season .. .. .. 16*087 18*060 1937-38 season .. .. .. 14*812 16*389 1936-37 season .. .. .. 13*558 15*176

* Farm-costs allowances (see page 13).

— Sacks. Weight. Value. Tons. £ Lactic casein 27,148 1,697 211,033 Rennet casein 3.750 195 48,496

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COSTS OF BUTTER AND CHEESE MANUFACTURING COMPANIES The following tabulation shows the average costs of butter- and cheese-manufacturing companies for the 1946-47 season. The averages for the ten previous seasons are also shown :—<

Cost in Manufacture and Delivery of Butter to f.o.b. Overseas Steamers

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(In pence per pound of butterfat) — collection. Manufacturing Charges. Depreciation. Repairs and Maintenance. Charges: Factory to f.o.b. Overhead Charges. Total Charges. New Zealand average— | 1946-47 season 0-486 1 098 0-083 0-123 0-423 0-222 2 •435 —0 ■316* 2-119 1945-46 season 0-504 1 163 0-095 0-097 0-409 0-235 2' •503 —0 ■312* 2-191 1944-45 season 0-460 1 042 0-090 0-079 0-397 0-188 2•256 —0 ■269* 1-987 1943-44 season 0-472 1 ■109 0-093 0-078 0-391 0-210 %• 353 —0' ■269* 2-084 1942-43 season 0-440 1 •100 0-089 0-068 0-398 0-206 2-301 1941—42 season 0-438 1 •091 0-091 0-064 0-409 0-213 2-306f 1940-41 season 0-405 1 023 0-077 0-063 0-437 0-192 2-197 1939-40 season 0-398 0' ■977 0-084 0-063 0-418 0-187 2-127 1938-39 season 0-402 I■019 0-085 0-098 0-394 0-208 2-206 1937-38 season 0-381 0•953 0-075 0-076 0-384 0-178 2-047 1936-37 season 0-352 0' •927 0-072 0-088 0-398 0-147 1-984 * Factory-costs allowances (see page 13). t Butter-manufacturing costs for the 1941-42 season were increased owing to diversion of milk-supply from butter-manufacture to cheese-manufacture. Compensation payments were made to dairy companies on this account.

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Costs in Manufacture and Delivery of Cheese to f.o.b. Overseas Steamers

Note.—ln comparing dairy company costs with previous years the following factorywage allowances (see page 13), (not included in the figures shown for factory-costs allowances) should be added to the gross figures shown for the 1946-47 season : butter-factory-wage allowance, 0-145 d. per pound; cheese-factory-wage allowance, 0-626 d. per pound. The corresponding figures for previous seasons are: butter-factory-wage allowance : 1943-44, 0*022 d.; 1944-45-46, 0-095 d. Cheese-factory-wage allowance : 1943-44, 0*076 d.; 1944-45-46, 0-426 d. PUBLICITY IN THE UNITED KINGDOM In last year's annual report details were given of the " background " campaign carried out in the United Kingdom in 1946 by a committee representing the New Zealand Meat-producers' Board, the Marketing Department, and the High Commissioner's Office. The cost of the campaign was borne mainly by the Meat Board and the Marketing Department, with a smaller contribution from other interests. For the year 1947 the " background " advertising was confined to New Zealand's export food commodities—namely, meat, dairy-produce, and fruit—and the cost was borne equally by the Meat Board and the Marketing Department. More emphasis was placed on posters than on press advertising, due to the restrictive nature of press-advertisement spaces under present-day conditions. Advertising at exhibitions and fairs figures more largely than hitherto.

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(In pence per pound of butterfat) — Manufacturing Charges. Depreciation. Repairs and Maintenance. Charges: Factory to f.o.b. 1 Overhead Charges. Total Charges. New Zealand average— 1946-47 season 2-570 0-170 0-281 0-636 0-342 3-999 —0-319* 3-680 3-671 3-470 3-733 3-917 3-600 3-529 3-510 3-592 3-337 3-139 1945-46 season 2-584 0-172 0-269 0-638 0-331 3-994 —0-323* 1944-45 season 2-454 0-163 0-226 0-626 0-300 3-769 —0-299* 1943-44 season 2-660 0-176 0-217 0-636 0-343 4-032 —0-299* 1942-43 season 1941-42 season 1940-41 season 1939-40 season 1938-39 season 1937-38 season 1936-37 season 2-576 2-372 2-323 2-259 2-289 2-151 2-056 0-166 0-141 0-144 0-148 0-157 0-141 0-134 0-216 0-170 0-184 0-180 0-203 0-166 0-146 0-634 0-647 0-620 0-624 0-617 0-589 0-577 0-325 0-270 0-258 0-299 0-326 0-290 0-226 * Factory-costs allowances (see pag< 5 13).

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There was no departure from the basic policy upon which the whole plan and purpose of background advertising was originally built: — (1) To recall to United Kingdom consumers the traditional quality of food from New Zealand : (2) To remind them that supplies were maintained throughout the war and since: (3) To impress the idea of quality maintenance throughout, and that, although rationed to-day, the time will come when they may be bought by choice: (4) To pay due attention to the younger generation that they may acquire an agreeable and proper impression of New Zealand primary products. The first thing to engage attention was the preparation of a new poster design. Ideas were sought, considered, and finally agreed in committee. The new poster incorporated the " shopping-basket " theme. This design was adapted for use on the slides for cinema exhibition as last year, the purpose being, very briefly, that postersoutside, and slides in, the cinemas should be arranged to coincide in the areas of heavy population. Posters It was agreed that the allocation of posters should be on a similar basis to last year—viz., 1,000 16-sheet bills (10 ft. high, 6 ft. 8 in. wide) distributed between twenty provincial centres of population, and in London 150 48-sheet bills (10 ft. high, 20 ft. long), as against 130 last year. In addition, several more of the special solus positions have been acquired in London and nearby suburbs, bringing our total of such sites to fourteen. These latter sites are particularly valuable for our purpose. Lantern-slides in Cinemas Reproduction of the current poster design projected on cinema screens was in progress in 200 cinemas in suburban and provincial cinemas during the whole of the year, the estimated total audience of which, based on cinema seating capacity, is in the region of 140,000,000. This linked up extremely well with the posters displayed in the same areas. Press Advertising Due to the restrictions on the size of spaces allotted to advertisers, it became necessary, as previously stated, to revise the appropriation in this field. Women's journals, in which larger spaces were obtainable, together with weekly periodicals, including the Radio Times, now occupy pride of place. The circulation per issue of the media in use totals approximately 10,000,000, and, taking an average of six insertions in each during the twelve months' currency of the schedule, it is estimated that about 60,000,000 advertisements will have appeared. The trade press has been regularly used to keep the respective distributors fully informed of the programme. Exhibitions The first post-war Daily Mail " Ideal Home " Exhibition opened its doors to the public on 4th March, and by the closing date on the 29th March had attracted an alltime attendance record of over a million visitors. It was scarcely to be expected that the attractions of the show would be so numerous or of such quality as before the war, but nevertheless it was altogether a most creditable achievement and deserved the support it got.

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The Department had a general exhibit there, and, in accordance with the agreed policy, the Tourist and Immigration Departments participated. The staff at the exhibit were kept fully occupied dealing with inquiries of all kinds, and put into good distribution substantial quantities of informative literature and other advertisement material. It is felt that, even under present-day conditions, participation in this exhibition is well worth while. Booklet " Food for Peace " Reference to the production of this booklet was made in last year's annual report. After more delay than was anticipated, due to industrial difficulties, supplies began to come through from the printers about mid-March, and the preparations already made for distribution were put into operation. It is the intention to keep the distribution as selective as possible, owing to the limited number of copies available, which is not likely to be much in excess of 270,000. Up to date some 60,000 copies have gone out to public libraries, hospitals, educational authorities, women's guilds, and similar organizations, newspaper editors, co-operative societies, multiple grocery firms, and retail butchers' and provision shops. This distribution still proceeds. It is encouraging to note that the booklet has been generally very well received. Central Office of Information " Meet New Zealand " Exhibition Some twelve months ago the Central Office of Information communicated to the High Commisioner for New Zealand its desire to arrange an exhibition to be entitled " Meet New Zealand," the cost of which, over £25,000, would be borne by the COI. New Zealand was asked to supply the necessary references for pictorial treatments and also for dioramas and other exhibits of like nature ; also to arrange for the necessary officers to be in attendance throughout the run of the show. The exhibition was due to open in London early in November, and after about a two weeks run was to go on tour to several large provincial cities for eight or nine months, depending upon circumstances. The intention is that commodities will participate under the background committee, and although the cost will not be heavy it is clear that certain expenses will be inevitable. Arrangements are being made to set aside 60,000 booklets for distribution to visitors during the show. This generous offer on the part of COI is gratefully acknowledged. 1948 Publicity For 1948 a " background " campaign on similar lines to 1947 is to be continued. Special Dairy Publicity The matter of carrying out certain publicity, especially in respect of butter and cheese, was deferred owing to the continuance of shortage of food conditions. As referred to in last year's annual report, the Marketing Department's London Advertising Manager paid a visit to New Zealand during the period November, 1946, to February, 1947, and in conjunction with the Government studios at Miramar obtained a number of first-class photographs of technical processes in the manufacture of butter and cheese. It is considered these photographs will prove valuable in connection with publicity among the retail and wholesale provision trade in the United Kingdom. The question of special publicity for butter and cheese it to be further considered in respect of the year 1948.

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ANNUAL IMPORTS OF DAIRY PRODUCTS INTO UNITED KINGDOM DURING THE YEARS 1938 AND 1942 TO 1947 INCLUSIVE The following tables are of interest, particularly the butter and cheese tables, which show the importance of New Zealand as a supplier to Britain during the vital war years, and compare the normal pre-war imports with those of the immediate post-war period.

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Consigned from 1938. 1842. 1943. 1944. 1945. 1946. J 1947. Ann New Zealand Australia Irish Free State Union of South Africa .. Canada South-west African Territory Kenya Other Empire Total Empire .. Denmark Netherlands .. Latvia Sweden Lithuania Estonia Finland Poland Argentine Austria Hungary .. France Belgium Norway Czechoslovakia Japan Uruguay Other foreign .. Total foreign .. Grand total Less re-exports Net imports * The revise UAL IlIPOB 129,613 89,891 16,330 1,266 1,501 1,294 707 37 TS OF Bui (II 93,377 40,716 225 12 I r- 6 I J CTE8 INTO l tons) 100,385 44,013 142 5 3,175 United K 104,383 37,799 28 Kingdom 118,274 45,059 1 1 1 101,162 65,490 " 3 3 120,309 53,944 445 240,639 134,336 147,720 142,210 163,336 166,658 174,698 40,373 1 j 209 *37 118,240 35,595 16,995 15,038 11,404 9,158 10,486 9,954 4,494 749 1,023 17 249 620 555 371 308 1 *18 225 *386 10j 522 217 26,114 *614 56 43,537 i jio2 *37 235,257 243 3,884 10,739 26,784 44,676 41,593 475,896 3,952 134,579 48 151,604 78 152,949* 109 190,120 179 211,334 786 216,291 2,260 471,944 134,531 151,526 152,840 189,941 210,548 214,031 sd figures issi led in 1946 show total imports for 1944 as 153,200 tons.

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Consigned from 1938. 1942. 1943. 1944. 1945. 1946. 1947. Ann New Zealand Canada Australia Union of South Africa .. Irish Free State Other Empire Total Empire .. Netherlands Italy Switzerland France Denmark Norway Finland Belgium United States of America Other foreign Total foreign .. Grand total Less re-exports Net imports * The revised figures issued Annual Impob New Zealand Canada Australia Eire Other Empire United States of America Other foreign Totals — Whole-milk powder Skimmed-milk powder Buttermilk and whey powder Grand total Note.—■] Annual Imports Canada Other British United States of America Other foreign .. Total UAL iMPOl 81,970 33,887 11,864 1,135 1,017 ITS OP CH (I> 132,131 55,855 4,906 117 EESE INTO a tons) 91,686 55,655 7,518 United E 82,299 55,355 3,597 Kingdom 83,842 58,509 3,563 213 82,123 50,247 18,267 "53 82,720 22,901 15,919 129,873 193,009 154,859 141,251 146,127 150,690 121,540 10,124 3,522 902 571 969 63 168 2 i72 122*181 3 54 j 779 1 110 j 582 77 44,755 361 795 1,692 1,301 3,37S 1,361 4,688 60*267 267 16,493 122,184 54,780 110,659 45,116 52,958 69,961 146,366 856 315,193 15 209,639* 243 251,910* 321 191,243 1,331 203,648 1,589 191,501 914 145,510 315,178 209,396 251,589 189,912 202,059 190,587 in 1946 shoi .TS OF UNJ 6,589 871 2,216 562 2,776 4,738 w total impo 5WEETENEI (II 7,348 322 y 2,251 J 55,174 3 "ts for 1943 8 ) Milk-po^ i tons) 8,310 232 2,587 72,847 6 is 206,993 to: VDER INTO 4,464 f 1*059 1,267 I 1 76,165 39 as, and for l! United ] 2,974 106 826 1,189 2 24,766 97 944 as 251,91 Kingdom 3,530 2,229 1,867 933 28,535 1 8 tons. 10,491 4,282 2,830 491 32 j 293 656 4,602 13,150 5,403 (5,342) 59,697 (59,576) 5,501 (5,462) 78,481 (75,629) 4,656 (4,659) 78,339 (78,315) 8,168 21,742 50 5,249 31,586 260 5,703 44,800 540 17,752 65,098 (64,918) 83,891 (81,091) 82,995 (82,974) 29,960 37,184 51,043 Figures in pa > op Unsw 8,964 2,140 4,716 rentheses are - EETENED < (II 27 1,423 /184,677 \ 1 s revised figu Con.dense:i i tons) 8 1,950 129,653 res issued in i Milk in' 3 837 86,072 1945 and 19ro United 2 3,501 56,674 16. ' Kingdom 12,791 4,280 68,993 12,278 6,280 40,643 15 15,820 (15,315) 186,128 131,611 86,912 (86,915) 60,177 86,064 59,216 Note.—Figures in parentheses are revised figures issued in 1946.

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ACCOUNTS The dairy-produce accounts covering the completed operations for the 1945-46 seasons and the operations for the 1946-47 season to the 31st July, 1947, are shown in the accounts section at the end of this report, pages 45 to 47. The completed operations for the 1945-46 season are referred to on page 45 of this report. After sale of the balance of the dairy-produce which was in store at 31st July, 1946, the final result of the operations for the complete 1945-46 season is a surplus of £1,114,605. The accounts now presented for the 1946-47 season cover purchases of butter and cheese by the Department up to 31st July, 1947. The following table shows the quantities so purchased, the total season's production for export, and the stocks in store awaiting purchase at 31st July, 1947 :

The accounts for the 1946-47 season comprise Administration and General Expenses Account, Purchase and Sale and Revenue Accounts, Dairy-produce Account, and Dairy Industry Stabilization Account. The circumstances of the establishment of the Dairy Industry Stabilization Account are referred to in a note at the foot of the accounts published with the 1944 annual report (page 30). There is a further reference to the Dairy Industry Stabilization Account on page 4 of last year's report, and on page 3 of this report. The account itself is shown on page 47. It will be observed from the Accounts that the Purchase and Sale and Revenue Accounts show a surplus at 31st July, 1947, of £937,425, which is transferred to the Dairy-produce Account. In terms of the arrangements settled with the industry in July, 1943, the net surplus in the Dairy-produce Account, £960,269 is transferred to the Dairy Industry Stabilization Account. The Dairy Industry Stabilization Account shows a credit balance of £8,907,459. MEAT LONG-TERM CONTRACTS, 1944-48, BETWEEN THE UNITED KINGDOM AND NEW ZEALAND GOVERNMENTS FOR PURCHASE OF THE EXPORTABLE SURPLUS OF MEAT FOR THE PRODUCTION PERIOD IST OCTOBER, 1944, TO 30TH SEPTEMBER, 1948, AND ITS EXTENSION TO 30th SEPTEMBER, 1950 Details of the long-term contract (1944-48) between the United Kingdom and the New Zealand Governments for the purchase of the exportable surplus of meat for the production period, Ist October, 1944, to 30th September, 1948, were given in the 1945 annual report. Prices and terms for the 1946-47 season were reconsidered in June, and the agreement reached was set out in last year's report. The agreement provided for an extension of the contract for two further years to 30th September, 1950. As referred to on page 3 of this report, the contract terms were reconsidered in August and September, 1947. Agreement on the following matters was reached with Sir Henry Turner, Director of the Imported Meat Section of the Ministry of Food: — Pig-meat.—The United Kingdom to purchase New Zealand's exportable surplus of pig-meat up to 30th September, 1950.

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Shipped and paid In Store and paid In Store and not Total production to 31st July, to 31st July, paid to 31st for Export Season, 1947. 1947. July, 1947. 1946-47. Boxes. Boxes. Boxes. Boxes. •Creamery butter 4,731,647 72,804 108,728 4,913,179 Whey butter 90,407 1,587 1,760 93,754 Crates. Crates. Crates. Crates. Cheese 1,106,562 29,330 25,969 1,161,861

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Prices.—lf higher prices are paid to other countries supplying meat to the United Kingdom, notably Argentina and Australia, New Zealand will have the right to reopen the question of prices for 1947-48 season. Boning of Beef. —Further discussions to take place in 1948 with regard to the cessation of boning of beef. Telescoping of Mutton and Lamb.^—Ministry of Food are in full sympathy with the desire of the industry to ship untelescoped carcasses of mutton and lamb, but are unfortunately not in a position to dispense with the telescoping yet. They agree however, that the matter should be brought up for discussion again early next year, and that when it becomes possible to discontinue telescoping they will endeavour to give three months' notice so that arrangements can be made to obtain suitable bags for the meat. Canning.—(l) Beef: They agree to purchase the same quantity of canned corned beef in 1948 as in 1947—namely, 2,500 tons —and that the prices shall be the same as those to be paid to Australia. (2) Tongues : The Ministry's main desire is for short frozen tongues, and they therefore wish the canning of tongues to be reduced to a minimum. They do not particularly want the tongue roots, but will accept them if they cannot be otherwise disposed of without waste. Shipments to Markets outside the United Kingdom.—Although the Ministry could not object to New Zealand shipping 1 per cent, of her total annual export tonnage to other markets if she so desires, they feel that it would not be opportune to introduce such a concession at the present time when, at their request, New Zealand is making arrangements to ship to the United Kingdom all the meat she can. They agree, however, that the position should be considered before next season commences. Arrangements to apply after 30th September, 1950.—1t is agreed that clause 14 of the Heads of Agreement should be altered to provide that before 31st December, 1948, the two Governments will discuss the appropriate arrangements to apply after 30th September, 1950, having regard to conditions then prevailing. Notes. —(1) Meat Schedule Prices to be paid to Farmers by Freezing Companies and Meat Operators at opening of 1947-48 Season. —For convenience of reference, the following letter from the Hon. the Minister of Agriculture to the New Zealand Meatproducers' Board, written before publication of this report, is quoted. This letter announces the meat-schedule prices to be paid to farmers by freezing companies and meat operators at the opening of the 1947-48 season : 11th September, 1947. The Chairman, New Zealand Meat Producers Board, P.O. Box 121, Wellington. Dear Sir, Meat Export Sohedcle, 1947-48 This will serve to confirm the agreement reached between the Government and your Board that the opening schedule prices to be paid by freezing companies and operators for the 1947-48 season will be : Lambs (Woolly) Prime Down Cross and Prime Canterbury— d. 20/36 .. .. .. .. .. .. 10J 37/42 .. .. .. .. .. .. 10f 43/50 .. .. .. .. .. .. 10| 51/56 .. .. .. ... .. .. 9f Prime Crossbred — 20/36 .. .. .. .. .. .. 10£ 37/42 .. .. .. .. .. .. lOf 43/50 .. .. .. .. .. ..9|51/56 .. .. .. .. 9| Seconds—--20/36 .. .. .. .. .. .. 9J 37/42 .. .. .. .. .. .. 9f 43/50 .. .. .. .. .. .. 9£

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WethersNorth IslandPrime— d. 48/U 7* 49/64 .. .. .. .. .. 6| 65/90 .. .. .. .. As 64 lb. @ 6| —365. Bd, Seconds — 64/U .. .. .. .. .. 6| 65/72 .. .. .. .. As 64 lb. @ 6f—34s. South Island— Prime—--48/U .. .. .. .. ..61 49/64 .. .. .. .. .. 6f 65/90 .. .. .. .. As 64 lb. @ 6| —355. 4d. Seconds—--64/U .. .. .. .. ■■ H 65/72 .. .. .. • .. As 64 lb. @ 6*—32s. Bd. Ewes — 64/U .. .. .. ... .. .. 4f--65/90 .. .. .. .. .. As 64 lb. @ 4| —255. 4d. Quarter Beef — Ox— G.A.Q. — 720/U .. .. .. .. .. 51s. per 100 lb. 0/720 .. .. .. .. .. 48s. per 100 lb. F.A.Q. : All weights .. .. .. .. 435. per 100 lb. Heifer— G.A.Q. — 720/U .. .. .. .. .. 50s. per 100 lb. 0/720 .. .. .. .. .. 475. per 100 lb. F.A.Q. : All weights .. .. .. .. 425. per 100 lb. Cow — G.A.Q. : All weights .. .. .. .. 41s. 6d. per 100 lb. F.A.Q.: All weights .. .. .. .. 365. 6d. per 100 lb. Boner Beef — Ox .. .. .. .. .. "J r !! !! !! ;> 28s. 6d. per 1001b. Heifer .. .. .. .. .. J The cost of the consequential increases in the Marketing Department purchase prices for meat will be debited to the Meat Industry Stabilization Account. I have also to advise you that the Government is prepared to reopen discussions on the 1947-48 schedule prices should agricultural workers' wages be increased to a greater extent than 10s. per week. This covers the point raised in your letter of 9th September, 1947. Yours faithfully, (Sgd.) Edward Cullen, Minister of Agriculture.

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(2) Purchase-prices payable to Freezing Companies and Meat Exporters for 1947-48 Season.—ln a letter dated 29th October, 1947, addressed to the Freezing Companies Association, the Hon. the Minister of Marketing announced the f.o.fe. purchase-prices for export meat payable by the Marketing Department to freezing companies and meat exporters for the 1947-48 season. The text of the letter is as follows 29th October, 1947. The Chairman, Freezing Companies Association, C/o Gear Meat Co., Ltd., P.O. Box 164, Wellington. Dear Mr. McKay, Consequent upon my recent announcement regarding the increased schedule prices to be paid to producers for fat stock as from the commencement of the 1947-48 season, the following f.o.b. purchase prices, which I understand were agreed by you, will be paid to freezing companies and meat exporters by the Marketing Department, Export Division, for killings on and after the Ist October, 1947 : F.o.b. Price Pence per Pound, Lamb — N.Z; Currency. Prime Down Cross 2's (20/36 lb.) telescoped .. .. .. 10-482 B's (37/42 lb.) „ .. .. ..9-982 4's (43/50 lb.) „ .. .. .. 9-482 Tegs (51/56 lb.) „ .. .. ..8-982 Prime Canterbury 2's (20/36 lb.) „ .. .. .. 10-4195 B's (37/42 lb.) „ .. .. .. 9-9195 4's (43/50 lb.) „ .. .. .. 9-4195 Tegs (51/56 lb.) „ .. .. .. 8-9195 Prime Crossbred 2's (20/36 lb.) „ .. .. .. 10-232 B's (37/42 lb.) „ .. .. .. 9-732' 4's (43/50 lb.) „ .. .. ..9-232 Tegs (51/56 lb.) „ .. .. .. 8-732 Second Quality ..' (36 and under) „ .. .. .. 9-232 (37/42 lb.) „ .. .. .. 9-232 (43/50 lb.) „ .. .. ..8-482 (51/56 lb.) „ as 2nd Quality Wethers 56/U .. .. 6-377 Mutton — Prime Wether and Maiden Ewe l's (48 and under) telescoped .. .. .. 7-127 7's (49/56 lb.) „ .. .. ..6-877' 3's (57/64 lb.) „ .. .. .. 6-877 9's (65/72 lb.) 1 s's (73/80 lb.) „ ;. ... ■ .. 6-877 on 64-lb-, only. o's (81/90 lb.) j ■ Second Quality .. (56 and under) „ .. .. .. 6 • 377 -(57/64 lb.) „ .. .. .. 6-377 (65/72 lb.) „ .. .. .. 6-377 on 64 lb - .' oirly. Ewes .. .. (64 and under) „ :. .. " .. 4-9 (65/72 lb.) „ .. .. .. 4-9 on 64 lb. only. (81/90 lb)} Boned for Export .. .. „ 6-0 Allowance for telescoping lamb and mutton carcasses .. .. .. 0*0777 In the case of prime wethers 65/90, second wethers 65/72, and ewes 65/72, the Marketing Department will pay freezing charges on the excess weight over 64 lb.

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F.o.b. Price „ „ , XT ■, Pence per Pound, Beef and Veal— IST.Z. Currency. ; G.A.Q. ox and heifer, ex bodies, 720/U — Bone in. Boned. Hinds.. .. .. .. .. .. .. .. 7-56 10-05 Fores .. .. .. .. .. .. .. .. 4-96 6-82 G.A.Q. ox and heifer, ex bodies, 0/720 — Hinds.. .. .. .. .. .. .. .. 7-15 9-52 Fores .. .. .. .. .. .. .. .. 4-57 6-29 F.A.Q. ox and heifer, all weights— Hinds . . .. .. .. .. .. .. ..6*47 8-92 Fores .. .. .. .. .. .. .. .. 4-24 6-03 G.A.Q. cow, all weights— Hinds.. .. .. .. .. .. .. .. 6-24 8-43 Fores .. .. .. .. .. .. .. .. 4-13 5-76 F.A.Q. cow, all weights— Hinds .. .. .. .. .. .. .. .. 5-29 7-41 Fores .. .. .. .. .. .. .. .. 3-85 5-55 Boneless ox, heifer and cow .. .. .. .. .. .. .. 5-28 Boneless bull .. .. .. .. .. .. ~ .. 5-25 Boneless bobby veal .. .. .. .. .. .. .. 4-665 Veal sides and quarters— First quality .. .. .. .. .. .. ' .. 4•56 Second quality .. .. .. .. .. .. .. 3• 56 Prices for pigmeats are still under consideration and will be advised later. The above f.o.b. prices will be circularized to all freezing companies and exporters within the next few days. Yours faithfully, (Sgd.) Edward Cullen, Minister of Marketing. PURCHASE AM) SALE PROCEDURE AND PRICES PAID FOR 1946-47 SEASON'S MEAT PURCHASED BY MARKETING DEPARTMENT FOR EXPORT The purchase and sale procedure has remained unchanged during the 1946-47 season. Following discussions between the New Zealand Meat-producers'-Board and the Economic Stabilization Commission, increased prices were paid to farmers on all classes of fat stock. Details of the resultant f.o.b. prices are set out in the Meat Marketing Order 1942, Amendment No. 5. Purchases made by the Marketing Department from freezing companies and exporters during the twelve months ended 31st July, 1947, totalled £25,052,612 (New Zealand currency), and debits for shipments to the United Kingdom Ministry of Food for the same period were £28,152,451 (New Zealand currency). The following table shows particulars of meat purchased by the Marketing Department from freezing companies and exporters during the twelve months ended 31st July, 1947 :

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Class of Meat. Tons. Purchase Value (N.Z. Currency). Average Price per Pound (N.Z. Currency). Frozen — Lamb Mutton Beef and veal Pig-meats Edible offals .. Totals Preserved— Canned beef (including mixed packs) Tongues .. .. .. ■ Totals .. Totals, frozen and preserved meat 179,891 77,604 71,668 8,365 11,993 £ 15,111,481 3,406,675 4,172,225 860,414 927,809 d. 9-00 4-70 6-24 11-02 8-29 349,521 24,478,604 7-50 2,660 1,384 268,621 305,387 4,044 574,008. •. 353,565 25,052,612

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EXPORTS TO COUNTRIES OTHER THAN UNITED KINGDOM During 1946 the United Kingdom Ministry of Food advised that a revised method of supplying British colonies and dependencies with their allocations of meat, other than frozen meat, was to come into operation. Instead of securing supplies out of the Ministry's bulk purchases, these territories could, if they wished, import through normal commercial channels direct. Under this scheme the quantity required by each territory is agreed mutually between the United Kingdom and the area concerned, and the importing country undertakes to exercise control of imports so as to keep within the limit of the agreed allocations. New Zealand exporters have been kept advised of the territories which have agreed to secure their supplies under this scheme, and some business on a trader-to-trader basis has resulted. SURVEY OF SEASON The killings of meat returned to the Department during the 1946-47 season as available for export totalled 354,824 tons, representing an increase of 4*85 per cent, on the previous season. The number of lambs, wethers, and ewes slaughtered for export this season were lower than last season, but, owing to the favourable climatic conditions experienced, average weights were higher than normal. Killings of quarter beef reached a record level. Average weights of lamb and mutton for the three seasons, 1944-45, 1945-46, and 1946-47, are as follows :

Details of killings for export month by month throughout the season, with the 1945-46 season's totals for comparison, are shown in the following table :

Frozen Meat Killings for Export, Season 1946-47

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North Island. South Island. Dominion. 1944-45. 1945-46. 1946-47. 1944-45. 1945-46. 1 1946-47. 1944-45. 1945-46. 1946-47. lb. . lblb. lb. lb. lb. lb. lb. lb. Lambs 34-20 31-39 35-15 35-05 34-61 35-58 34-59 32-81 35-35 Wethers 59-18 54-32 60-18 51-02 49-67 52-41 58-40 53-86 ! 59-42 Ewes 57-14 52-51 57-23 53-13 52-83 54-01 55-68 52-61 ! 56-05

— ! /ether Mutton. we Mutton. uarter Beef. oneless Bobby Veal. oneless Bull Beef. oneless Cow and Ox Beef. 2 § c3 & o 1 jS 3 ta o 53 •3 "3 o ! s G? > pq M o (Si H 1946 Tons. Tons. Tons. Tons. Tons. Tons. Tons. Tons. Tons. Tons. ! Tons. Tons. Tons. October 16 177 421 256 17 986 161 532 718 81 22 191 3,578 November 2,935 1,378 923 718 4 376 293 794 1,009 87 19 304 S.-840 December 20,902 1,038 916 614 6 121 388 492 1,054 78 18 807 26,434 1947 January 48,796 2,395 4,865 1,848 9 56 592 321 1,444 133 34 1,936 62.429 February31,573 3.901 17,281 4,200 39 53 933 438 1,115 407 43 1,918 61-906 March 23,690 5,010 15,207 6,539 67 25 693 638 959 887 28 1,688 55,431 April 26,319 3,491 5,959 8,936 124 41 678 1,155 692 929 17 1,709 ! 50,050 May 15,861 1,620 7,054 10,857 124 49 592 2,084 234 607 21 1,667 1 40,770 June 8,481 885 3,071 10,459 99 69 395 1,508 351 466 10 942 26,736 July 1,001 294 1,201 5,709 43 1,114 ! 254 729 52 25 3 722 11,1,47 August 323 126 375 418 10 2,494 74 268 44 24 6 429 4,391 September 11 43 140 174 2 2,085 66 162 97 12 24 296 3,112 Season Total 179,908 | 20,358 57,213 50,728 544 7,469 5,124 9,121 7,769 3,736 245 12,609 354,824 1945-46 season 174,298 19,639 60,868 33,341 1,093 7,121 | 4,681 12,387 8,414 5,584 200 10., 791 1 338,417

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SHIPPING AND STORAGE Although there has been no serious storage problems this season, the stocks in store at 30th September, 1947, awaiting shipment, 74,877 tons, are higher than at the end of any previous season. The following table - shows particulars of frozen-meat shipments to the United Kingdom Ministry of Food month by month during the twelve months ended 30th September, 1947, and the totals for each of the previous five years

Record of Frozen-meat Shipments to United Kingdom Ministry of Food

CANNED MEATS The contract with the United Kingdom Ministry of Food for the supply of canned corned beef during 1947 remained unchanged at 2,500 tons and the allocation of this quantity among the various meat canners was on the same basis as the 1946 contract. The net weight of canned meats actually shipped to the United Kingdom Ministry of Food during the twelve months ended 30th September, 1947, was as follows-: Tons. Corned beef .. .. .. .. .. • • 2,062 Corned mutton .. .. .. .. .. B Ox tongue .. .. ~ .. .. .. 142 Sheep and lamb tongues .. .. .. 1,074 Calf tongue .. .. . • •• 14 Pig tongue .. .. .. .. .. .. 57 Total 3,357 2—H 30

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(during bach Twelve Months ending 30th September) — Lamb. Mutton. Quarter Beef and Veal. Boneless Beef. Boneless Veal. Pig-meats. Edible Offal. Total. 1946 Tons. Tons. Tons. Tons. Tons. Tons. Tons. Tons. October 12,492 5,281 2,186 705 910 38 373 21,985 November 3,223 3,188 1,482 1,624 634 83 101 10,335 December 9,575 4,634 1,785 1,282 1,793 233 509 19,811 1947 January 18,615 2,373 1,141 1,460 999 971 519 26,078 February 19,462 1,833 501 594 880 491 1,124 24,885 March 12,071 6,413 1,730 898 616 975 22,703 April 21,130 13,623 4,238 954 382 2,031 42,358 May 11,887 6,621 5,007 1,145 3 588 680 25,931 June 24,761 10,671 7,453 895 60 202 1,885 45,927 July 19,167 7,104 5,898 885 1, ,328 1,471 35,853 August 14,666 8,116 6,002 1,602 1. ,482 1,138 33,006 September 8,229 3,291 2,372 492 284 403 320 15,391 Totals— 1946-47 .. 175,278 73,148 39,795 12,536 5,563 6. ,817 11,126 324,263 1945-46 .. 156,894 70,523 46,574 12,801 6,624 13. ,351 11,702 318,469 1944-45 .. 171,203 76,111 7,747 4,527 7,747 3. ,278 6,936 277,549 1943-44 .. 141,553 57,334 2,316 266 4,036 948 6,164 212,617 1942-43 .. 155,139 22,649 22,815 2,248 5,579 728 8,474 217,632 1941-42 .. 191,448 40,081 37,390 766 2,350 15. ,855 9,976 297,866

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FREEZING COMPANY SUBSIDIES As an investigation of the financial position of freezing companies was being made by the Economic Stabilization Commission to ascertain whether existing subsidy rates should be maintained, freezing companies were advised early in the year that subsidies then being paid would be subject to adjustment, if necessary, when the review was completed. Subsequently the Freezing Companies Committee was advised by the Economic Stabilization Commission that—(l) The subsidy of |d. per pound overall granted from Ist October, 1944, was cancelled from Ist October, 1946 : (2) The subsidy of |d. per pound overall granted from Ist January, 1945, was cancelled from 17th March, 1947 : (3) The subsidy of per pound overall granted from 2nd January, 1946, was to continue, and consideration will be given to the cancellation of this subsidy and the increasing of the freezing charge in the schedule structure before the export season opens on Ist October, 1947. The subsidy of Oolsd. per pound for administration expenses paid from Ist January, 1945, was also to continue to be paid until 30th September, 1947, when consideration will be given to its inclusion in the schedule structure. Further negotiations resulted in the cancellation of the overall subsidy of per pound and the administration subsidy of 0-015 d. per pound at the end of the 1946-47 season and the addition of the former to the killing and freezing rate and the latter to the buying and administration allowance when the 1947-48 season's f.o.b. prices were being calculated. EFFECT OF THE RATIONING EMERGENCY REGULATIONS AS APPLIED TO MEAT The following information is supplied by the Food and Rationing Controller : It is estimated that since the inception of meat rationing in March, 1944, 76,000 tons of meat have been withdrawn from civilian consumption. This figure is exclusive of savings in respect of bacon and ham, which from the introduction of the Bacon and Ham Curing Order in June, 1943, to date has resulted in 171,000 baconer pigs, equivalent to 10,400 tons carcass weight, being withheld from local sales. ACKNOWLEDGMENT The Marketing Department wishes to record its appreciation of the continued co-operation extended by the Overseas Shipowners Allotment Committee, freezing companies, meat canners and exporters, New Zealand Meat-producers' Board, and the various Government Departments with which the Marketing Department has been associated throughout the year.

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MEAT IMPORTS INTO THE UNITED KINGDOM The following tabulation, based on the accounts relating to the trade and navigation of the United Kingdom, lists the weight and country of origin of meat imports into the United Kingdom during the calendar years 1938 and 1947 (all figures in thousand hundredweight):—

35

— 1938. 1947. Mutton and lamb — Fresh 24 Chilled or frozen mutton — Australia 367 155 New Zealand 1,015 1,499 Other Commonwealth countries 2 25 Chile 97 86 Argentina 99 503 Other foreign countries 25 67 Total mutton 1,605 2,335 Lamb — Australia 1,531 846 New Zealand 2,661 3,550 Other Commonwealth countries 7 7 Chile 99 112 Uruguay 148 112 Argentina 795 1,557 Other foreign countries 43 12 Total lamb 5,284 6,196 OffalOther than canned 226 287 Canned 118 318 Total mutton and lamb, all kinds 7,257 9,136 Beef — Fresh and malted 5 150 Chilled 8,964 2 8,969 152 Frozen— Fore and hind quarters (including cuts with bone) — Australia 1,187 1,683 New Zealand 207 147 Canada 171 Other Commonwealth countries 1 Denmark . , 165 Brazil 4 1 Uruguay 72 41 Argentina 159 2,830 Other foreign countries .. .. [ 957 Total .. .. 1,630 5,995

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36

— 1038. 1947. Beef—continued Frozen —continued Boned and boneless (including cheeks and skirts) — 330 Australia 466 New Zealand 336 1,060 Canada .. .. •• 15 121 Other Commonwealth countries 9 Brazil 33 10 Uruguay 14 66 Argentina 39 2,128 Other foreign countries 189 Total 912 3,904 Offal599 Other than canned 755 Canned 1,084 2,808 Total beef, all kinds 13,350 13,458 VealFresh, chilled, frozen, or salted 23 17 Boned and boneless, fresh or preserved, 239 143 other than tinned and canned Other, including canned, tongues, and 171 307 other offal Total veal, all kinds 433 467 Bacon— Eire 537 Canada 1,275 M62 Other Commonwealth countries 1 5 Sweden 251 Denmark 3,389 652 Netherlands 514 16 United States of America 43 Other foreign countries 858 Total bacon 6,868 2,635 Hams — Canada 232 1 Other Commonwealth countries 16 1 United States of America 395 Other foreign countries 22 Total hams 665 2 Pork — Fresh 36 Chilled or frozen — Australia 284 41 New Zealand 578 166 Canada 9 Other Commonwealth countries United States of America ' 61 15 Argentina 239 62 Other foreign countries 10 3 Total chilled or frozen 1,181 287 Salted and pickled 11 Offal, other than canned 185 219 Canned pig-meat, all kinds 171 248 Total pig-meat 9,117 3,391

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In addition to the above, the following commodities were also imported:—

The total imports of all classes of meat, rabbits, poultry, &c., from the various supplying countries are as follows :

ACCOUNTS The following is a summary of the meat accounts printed on pages 48-53 of this report:— (a) Administration and General Expenses Account: (b) Final Purchase and Sale Account of 1945-46 season's killings, showing transfers of £464,630 to the credit of the Meat Pool Account and £887,397 to the credit of the Meat Industry Stabilization Account: (c) Purchase and Sale Account of 1946-47 season's killings up to 31st July, 1947, showing transfers of £1,256,526 to the credit of the Meat Pool Account and £1,886,571 to the credit of the Meat Industry Stabilization Account: (d) Meat Pool Account to 31st July, 1947, showing a surplus at that date of £11,162,172: (e) Meat Industry Stabilization Account to 31st July, 1947, showing a surplus at that date of £7,059,968 : (/) Bobby Calf Pool Account to 31st July, 1947, showing a surplus at that date of £387,896: (g) Bobby Calf Stabilization Account to 31st July, 1947, showing a surplus at that date of £423,684 : (h) Meat Account, which shows a credit balance of £26,919 at the 31st July, 1947,

37

— 1938. 1947. Rabbits : Fresh, frozen, and canned 256 576 Poultry : Fresh, chilled, and frozen 441 590 Game : Fresh, chilled, and frozen 30 23 Extracts and essences 66 145 Sausages of all kinds, other than canned 3 22 Poultry and meat pastes, canned sausages, and 10 255 meat pies 806 1,611

From 1638. 1947. 1 Cvvt. Cwt. Eire 808,826 335,399 Australia 4,888,598 4,234,963 New Zealand 5,488,747 (5,974,267 Canada 1,606,724 2,515,515 Other British countries 140,473 101,807 Sweden 255,207 18,257 Iceland 35,210 8,237 Denmark 3,476,298 1,111,845 Poland 556,171 10,036 Netherlands 553,714 19,631 Hungary 188,875 101,959 Yugoslavia 56,361 3,577 United States of America 729,809 1,153,252 Chile 202,685 207,589 Brazil 724,028 186,304 Uruguay 1,122,636 656,988 Argentine Republic 9,644,568 10,016,969 Paraguay 30,092 145,832 Other foreign countries 454,120 260,110 Total .. 30,963,142 28,062,537

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TALLOW PURCHASE BY UNITED KINGDOM GOVERNMENT OF 1946-47 SEASON'S TALLOW A contract was completed between the United Kingdom and the New Zealand Governments for the purchase by the United Kingdom Ministry of Food of the exportable surplus of the 1946-47 season's tallow. Terms, prices, and conditions of this contract are set out on page 36 of the Department's annual report for 1946. PURCHASES BY NEW ZEALAND GOVERNMENT OF 1946-47 SEASON'S TALLOW FROM NEW ZEALAND MANUFACTURERS The f.o.b. (New Zealand currency) purchase-prices payable to manufacturers remained as set out in the Schedule attached to the Purchase of Tallow Order 1940, and subsequent amendment. The surplus, or difference between the United Kingdom purchase-prices and the prices paid by the New Zealand Government, is approximately £BO (New Zealand currency) per ton. STATISTICS The following table shows the quantities of tallow purchased and shipped from Ist August, 1946, to 31st July, 1947. Total exports amounted to 24,995 tons.

Permits were granted to shippers to overseas countries from Ist August, 1946 to 31st July, 1947, as follows : Fiji. Tons (Net). Good colour, mixed .. .. .. .. .. 191 191 Note.—Practically all edible beef tallow lias been required for manufacturers in New Zealand, in addition to considerable quantities of edible mutton tallow.

38

— United Kingdom. Jamaica. Canada. Tons (Net). Tons (Net). Tons (Net). First beef 52 First mutton 7,432 Good bright prime, mixed 573 *214 Good colour, mixed 4,400 211 742 Fair to good, mixed 1,665 22 Fair colour, mixed 291 33 Good gut 4,017 817 Medium gut 2,187 501 Low and no-colour gut 415 158 Stearine, superior 521 Stearine, medium 140 Pig fat, inedible, steam rendered 219 Hog grease 170 Hide grease 24 22,106 211 2,487

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PURCHASE BY UNITED KINGDOM GOVERNMENT OF 1947-48 SEASON'S TALLOW A contract was completed between the United Kingdom and the New Zealand Governments, before publication of this report, for the purchase by the United Kingdom Ministry of Food of the exportable surplus of the 1947-48 season's tallow on the same terms and conditions as applied for the 1946-47 season, but with an increase of prices amounting to 25 per cent, above those ruling for the 1946-47 season. For convenience of reference these prices are quoted hereunder :

Price Schedule for New Zealand Tallow for 1947-48 Season's Productions

ACCOUNTS The tallow accounts are shown in the accounts section at the end of this report page 54. They comprise Purchase and Sale Account, Revenue Account, and Tallow Account, and cover the purchase and sale of tallow for the year ended 31st July, 1947. After providing £6,248 for administration and handling expenses, the surplus of £1,234,750 which represents the difference between the purchase-prices and sale-prices, has been transferred as to £227,954 to the credit of the Meat Pool Account and as to £1,006,796 to the credit of the Meat Industry Stabilization Account (page 52). The credit balance of £3,546 in the Tallow Account represents the difference between the Department's administration and handling allowance and the actual charges incurred by the Marketing Department. HIDES REPORT OF HIDES COMMITTEE ON OPERATIONS FOR YEAR ENDED 31st MARCH, 1947 The following report, in terms of the Hides Emergency Regulations 1940, has been submitted to the Hon. the Minister of Marketing on behalf of the Hides Committee by the Chairman, Mr. A. P. O'Shea I have pleasure in submitting the seventh annual report and statement of the Equalization Fund for the year Ist April, 1946, to 31st March, 1947 :■ — Export Levy.—The rates of export levy brought into force on 24th October, 1942, and pegged at the request of the Economic Stabilization Commission, remained unchanged until sth September, 1946. The agreement with the Economic Stabilization Commission to stabilize the Equalization Fund at a credit balance of £40,000 resulted in £35,000, £30,000, and £40,000 being received during 1944, 1945, and 1946 respectively from War Expenses Account.

39

Key Letter. Grade. Price per Toil Sterling C. and I 1 . in Casks/Drums with Premium of 5s. per Ton shipped in Barrels. £ s. d. A First beef 110 6 3 C First mutton 106 5 0 E Good bright prime, mixed 101 5 0 F Good colour, mixed .. .. 100 0 3 G Fair to good colour, mixed 98 15 0 H Fair colour, mixed 96 11 3 I Good gut tallow 94 1 3 J Medium gut tallow 91 11 3 K Low and no colour gut tallow 87 3 9 M Stearine. superior 111 11 3 N Stearine, medium 107 16 3 0 & Q Hog grease/pig fa,t (FFA basis 1 per cent.) 109 13 9 P Lard edible 142 3 9 R Hide grease — Under 1 per cent. FFA 93 15 0 1 par cent, to 15 per cent. FFA 91 5 0 Over 15 per cent. FFA 88 8 9 S Edible mixed 104 7 6

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With the discontinuance of the International Hide Committee and with overseas ceiling prices ceasing to operate as from the end of June, 1946, and the consequent rise in hide prices in New Zealand, the export levy was found to be totally inadequate for the purpose of meeting claims against the Fund. The change in overseas conditions was estimated at the 30th June, 1946, to produce a debit balance, as between export levy and claims against the Fund, of £120,000 by 31st January, 1947. As the result of a special meeting of the Hides Committee held on 3rd July, 1946, a letter was sent to the Economic Stabilization Commission, together with a report on the financial position, requesting payment of £40,000 immediately, and pointing out that £120,000 would be required (estimated on end of June prices) by 31st January, 1947. A reply to our letter of the 3rd July, 1946, was not received until the 22nd of July, when the following communication arrived : " I have to advise that Government has decided that immediate action will be taken to set up machinery which will result in the major portion of the recent increases in hides and calf-skin prices being withheld from producers and paid to the industry stabilization accounts. " (Signed) L. C. Webb, " Director of Stabilization." The following reply to the above was sent on 23rd July : " Further to your letter of 22nd July, 1946, I would point out that it does not clarify the position so far as the Hides Committee is concerned. The Committee desire to know what is to be the policy in regard to the levy and also in regard to the Fund generally. I have discussed the matter with members of the Committee, who point out that the Committee per se is not concerned with policy, but solely with administration. They are of the opinion that policy matters should be decided by Government in consultation with representatives of all interested parties. " (Signed) H. G. Andrews, " Secretary, Hides Committee." Overseas prices rose so quickly in July, 1946, that the estimated 31st January, 1947, deficit of £120,000 became an established fact by 31st July, 1946, and at a meeting held on sth August, 1946, the Committee decided to suspend all hide sales until further notice. The deficit at the 31st August, 1946, rose to £lBO,OOO, and after discussions with the Stabilization Commission and in view of the stock position throughout the country the Committee decided at a meeting on 4th September, 194-6, to permit the resumption of sales until further notice. This information was passed on to the Economic Stabilization Commission the same day, also advising that, following on the discussions with the Commission, the levy had been raised from the lid. basis to lOd. per pound and that the arrangement would continue until the meat schedule negotiations were completed, when the position would be reviewed and new arrangements made in regard to the levy and/or its disposal. The letter to the Commission pointed out that as the arrangement proposed was outside the powers conferred by the Hides Regulations, validating amendments were required immediately. Under date of sth September, 1946, the Commission replied that Government approved of the action taken by the Hides Committee in resuming sales and the rates of levy struck, advising that these rates be adjusted in accordance with export prices and that consideration of issuing validating amendments to the regulations be left over until a later date. On the 6th September, 1946, arrangements were made for an overdraft at the Bank of New Zealand of £150,000 approved by the Minister of Finance under clause 24 of the Hides Emergency Regulations. On "the 14th November, 1946, a further letter was sent to Economic Stabilization Commission advising that the overdraft should be cleared by 31st January, 1947, and that once the Fund was in credit to the sum of £40,000 amendments to the regulations would be necessary. The reply received dated 2nd December, 1946, read as follows : " In reply to your letter of the 14th November, 1946, I have to advise that with the fixing at last season's levels of the value of hides in the export schedule, it is necessary for the Hides Committee to continue to adjust levy rate so as to bring values back approximately to the level in the export schedule. " (Signed) L. C. Webb, " Director of Stabilization."

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The following alterations to the export levy rates were made during the year :

The following hides " freed for export" during the year are estimated to produce £442,038 in levy collections :

Statistics.—The following table shows the number of hides claimed by the tanners, and the number freed for export from all sales held under the Hides Emergency Regulations 1940 (No. 2) during the year Ist April, 1946, to 31st March, 1947 :

Financial Report.—This is set out in detail below and, based on the number of hides handled in terms of the Regulations, the cost is o*2sd. per hide, as against 0-3 d. for previous years. Hides Equalization Fund as ax 31st March, 1947 Receipts Payments £ s. d. £ 8. d. Bank balance at Ist April, 1946 .. 26,150 9 8 Claims paid to tanners, freezing cornBalance payment of subsidy of £40,000 panies, and exporters .. .. 319,081 8 2 from War Expenses Account to stabil- Interest on overdraft at bank .. 2,855 11 0 ize balance at 31st January, 1946 .. 5,000 0 0 Expenses—• £ s. d. Salaries .. .. 663 6 8 £ s. d. Bent and telephone .. 52 10 0 Levy on hides exported .. 169,568 14 0 Postage and telegrams .. 62 17 0 Less cost of collection.. 2,394 15 0 Stationery .. .. 63 0 6 167,173 19 0 Audit fee .. .. 20 0 0 Levy on leather exported .. .. 14,176 310 Bank fee and cheque-book 210 0 Travelling-expenses .. 59 10 10 212,500 12 6 Bureau fees.. .. 7 9 3 Overdraft at Bank of New Zealand .. 110,367 10 11 931 4 3 £322,868 3 5 £322,868 3 5

3—H 30

41

Levy Rates in Force as from— 1st April, 5th September, 18th October, 20th November, 11th February, 1946. 1946. 1946. 1946. 1947. d. d. d. d. d. Ox-hides li 10 12 15 16 Cow-hides U 10 12 15 16 Bull-hides l 6 6 9 10 Yearlings .. li 10i 12£ 16 17 *Calf-skins 3 15 20 25 26 * Other than freezers.

From Ox. Cow. Bull. Yearlings. Calf. Estimated Levy. 1st April, 1946 5th September, 1946 18th October, 1946 20th November, 1946 11th February, 1947 23,140 8,363 8,189 9,137 12,057 169,705 23,234 17,124 34,210 30,315 18,584 1,428 508 4,188 7,546 6,238 6,472 3,155 5,758 2,763 8,734 7,958 6,047 10,632 4,764 £ 41,768 66,580 61,310 129,810 142,570 60,886 274,588 32,254 24,386 38,135 442,038

—- Ox. Cow. Bull. Yearlings. Calf. Tanner Export 133,535 60,886 254,791 274,588 2,265 32,254 38,309 24,386 31,871 38,135 Total 194,421 529,379 34,519 62,695 70,006

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Estimated Position when all Hides " Freed for Export " to 31st March, 1947, have been Shipped £ s. d. £ s. d. Balance levy estimated to 31st March, 1947, Overdraft as at 31st March, 1947 .. 110,367 10 11 on hides " freed for export" and still Claims unpaid as at 31st March, 1947 .. 39,632 9 1 to be shipped .. .. .. 300,000 0 0 150,000 0 0 Estimated credit balance .. .. 150,000 0 0 £300,000 0 0 £300,000 0 0 The New Zealand Tanners' Association advise that Mr. E. A. Astley has resigned as President of their association and that Ms place on the Committee will be taken by Mr. T. G. Tomkins. The New Zealand Master Butchers' Federation also advise that Mr. W. S. Hughes has been nominated by their federation as representative member on the Hides Committee in place of Mr. J. F. Carter. I would like to take this opportunity of expressing on behalf of myself and other members of this Committee full appreciation of the co-operation received both from Mr. E. A. Astley and Mr. J. F. Carter during their term of office as members on the Hides Committee as representatives of their respective associations. General.—l desire to again express my thanks to the members of the Committee, Government Departments concerned, and to all sections of the trade for their willing assistance at all times. I wish particularly to express the appreciation of the Committee and my own personal appreciation of the work of the Secretary, Mr. H. G. Andrews. The rapidly changing conditions during the year just passed have called for a great deal of extra work and have necessitated prompt action on many occasions. The Committee is indebted to Mr. Andrews for his help and assistance in enabling them to cope with this rapidly changing situation. A. P. O'Shea, Chairman. WOOLLY SHEEP-SKINS As stated in last year's annual report, the bulk purchase of woolly sheep-skins by the United Kingdom Ministry of Supply terminated on 30th June, 1946. The Sheep-skin Controller, Mr. R. C. Burgess, continued during 1946-47 season to carry out Government policy in respect of the following matters:— (1) Stabilization of prices to producers on basis of pelt and wool values included in the fat-stock schedules : (2) Supply of requirements of local tanners at stabilized prices. To ensure the foregoing requirements, all sheep-skins were sold at auction in standard grades. The necessary provisions were embodied in the Sheep-skins Emergency Regulations 1947. The Sheep-skins Committee appointed to carry out the regulations was composed of Mr. R. C. Burgess (Chairman), appointed by the Government, Mr. J. Evans and Mr. J. Walker, nominated by the New Zealand Meat-producers' Board and New Zealand Wool Board respectively. As the appointment of the Sheep-skin Committee terminates the appointment of the Sheep-skin Controller, I desire to record the valuable and outstanding services rendered by the Controller (Mr. Burgess) and the Deputy Controller (Mr. George Stewart) during the period of the war years and up to 31st July, 1947. PICKLED SHEEP AND LAMB PELTS The Pickled Sheep and Lamb Pelts Regulations 1947 were required to carry out Government policy in respect of the following matters : (1) Stabilization of prices to producers on basis of pelt values included in the fat-stock schedules ; the surplus sale-prices realized over prices paid to producers to be paid to Meat Industry Stabilization Account: (2) Supply of requirements of local tanners at stabilized prices: (3) Supply to United Kingdom Government of 30 per cent, of New Zealand's export surplus at agreed prices.

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The regulations provided for compulsory auction sales in order to ensure the fulfilment of the above matters and for the appointment of a Pelt Controller to carry out the regulations. Mr. J. J. Evans, the General Manager of the New Zealand Meat-producers' Board, was appointed Pelt Controller, and he reports the results of the sales of pickled pelts for the 1946-47 season as under :

Sales of Pickled Pelts, 1946-47 Season

Of the total realizations of £5,142,666, £2,297,139 was paid to Vendors or Producers and £2,845,527 credited to Meat Industry Stabilization Account. LINEN FLAX The annual report for 1941 sets out the terms of sale to the United Kingdom Ministry of Supply of New Zealand's export production of linen flax fibre for the period of hostilities and one year after. This contract was extended to cover production up to the end of the 1946 season. A further contract for the supply of 100 tons from the 1947 season's production has been arranged with the Board of Trade. Shipments from Ist August, 1946, to 31st July, 1947, were as under:— Tons. Cwt. Linen-flax fibre and reiss .. .. .. .. 457 10 Tow and pluckings .. .. .. .. .. 271 8 728 18 The total value f.o.b. (New Zealand currency) of these exports was £133,625. UNRRA AND CORSO It has been agreed to accept responsibility for shipment of goods on behalf of these organizations, and the Department's shipping officer has been making the necessary applications for space and arranging for shipment of a great variety of products. SUNDRY SUPPLIES FOR WAR OFFICE During the year, supplies of food products have been shipped under contract to the War Office. The value of the products shipped during the twelve months ended 31st July, 1947, is £323,953 (New Zealand currency). The accounts covering the purchase and sale transactions of the Department in connection with these United Kingdom War Office supplies are shown in the accounts section at the end of this report, page 55. The surplus for the year ended 31st July, 1947, is £l5O.

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Method of Disposal. Sheep. Lambs. Total Value. Destination. Number of Dozen. Value. Average per Dozen. Number of Dozen. Value. Average per Dozen. £ s. d. £ s. d. £ Auction 65 305 319,276 97 9 460,417 1,947,908 84 7 2,267,184 U.S.A. Auction 84 236 482,675 114 7 136,093 566,977 83 4 1,049,652 U.K. Auction 3 120 17,669 113 8 2,337 8,810 75 5 26,479 Holland. Auction 17 886 100,145 112 0 2,007 6,623 66 0 106,768 Belgium. Auction 475 1,703 71 8 10,923 35,139 64 4 36,842 Australia. Auction 10,996 41,228 75 0 41,228 Canada. Auction 8,050 34,262 85 1 34,262 Sweden. Auction io! 00 00 57^241 105 6 4,770 13,811 57 11 71,052 France. Total Auction 181. ,870 978,709 107 8 635,593 2,654,758 83 6 3,633,467 Allocated to U.K. 85. ,170 415,531 97 7 299,985 952,753 63 6 1,368,284 U.K. Allocated to local tanners 33. ,941 75,361 44 5 40,160 65,554 32 8 140,915 Local tanners. 300,981 1,469,601 97 7 975,738 3,673,065 75 3 5,142,666

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SUMMARY OF VOLUME OF SALES BY THE DEPARTMENT OF PRODUCTS FOR EXPORT FOR THE TWELVE MONTHS ENDED 31st JULY, 1947

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Product. Volume. Equivalent Net Value f.o.b. (N.Z. Weight (in Tons). Currency). Butter 4,997,656 boxes 124,815 £ 27,026,060 Cheese 1,148,756 crates 81,528 10,344,361 Processed cheese 20,406 cases 467 69,377 Casein 30,898 sacks 1,872 259,529 Evaporated milk 279,298 cases 5,985 408,267 Skim-milk powder 225,206 cases 10,304 819,821 Frozen meat 333,728 27,539,645 Canned meat 4,042 612,806 Tallow 24,995 2,028,152 Linen-flax fibre 729 133,365 War Office contracts 323,953 £69,565,336

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MARKETING DEPARTMENT (EXPORT DIVISION) DAIRY-PRODUCE Administeation and Geneeal Expenses Account foe the Yeae ended 31st July, 1947 United New Gr. Kingdom. Zealand. Total. Allocation of expenses to Purchase and Sale Accounts— Dr. £ £ £ 1945-46 season's produce— £ £ Salaries .. .. .. .. .. .. 12,469 12,391 24,860 Creamery butter .. .. .. .. .. .. 1,112 Office rent, maintenance, cleaning, telephones, and sundry Whey butter .. .. .. .. .. .. .. 6 expenses .. .. .. .. .. .. 1,683 2,516 4,199 Cheese .. .. .. .. .. .. .. 394 Postages, cables, printing, and stationery .. .. .. 377 1,351 1,728 1,512 "Travelling-expenses .. .. .. .. .. 488 2,577 3,065 1946-47 season's produceSubscriptions, donations, and entertainment .. .. 29 .. 29 Creamery butter .. .. .. .. .. .. 47,331 Shipping inspection .. .. .. .. .. 2,536 839 3,375 Whey butter .. .. .. .. .. .. .. 821 Agency expenses: Lyttelton .. .. .. .. .. 225 225 Cheese .. .. .. .. .. .. .. 18,079 Audit expenses .. .. .. .. .. .. 390 390 Processed milk products.. .. .. .. .. .. 4,043 Depreciation .. .. .. .. .. .. 309 315 624 70,274 £17,891 £20,604 38,495 Advertising in United Kingdom (including " background advertising ") .. .. 25,233 Miscellaneous expenses .. .... .. .. .. .. 114 Cost of remittances to dairy companies .. .. . . .. .. 7,725 Subsidy, Public Service Superannuation Fund ~ .. .. .. 219 £71,786 £71,786 Final Puechase and Sale and Revenue Account 1945-46 Season's Daiey-peoduce Creamery Whey Creamery Whey Butter. Butter. Cheese. Total. Gr. Butter. Butter. Cheese. Total. Dr. £ £ £ £ Sales net f.o.b. after 31st July, 1946— £ £ £ £ Stocks in store at 31st July, 1946 .. 176,925 .. 155,787 332,712 To United Kingdom .. .. 718,601 3,630 359,323 1,081,554 Purchase on basis net f.o.b. after 31st To other destinations .. .. 46,557 .. 12,504 59,061 July, 1946 .. .. .. 451,241 2,640 159,692 613,573 Transfer to Dairy Industry Stabilization Account (being proceeds of increases in sale prices of dairy-produce after 15th December, 1942) .. .. 131,204 871 37,899 169,974 * Gross surpluses on transactions after - 31st July, 1946, carried down .. 5,788 119 18,449 24,356 £765,158 £3,630 £371,827 £1,140,615 £765,158 £3,630 £371,827 £1,140,615 1 ===== , Gross surpluses on transactions after £ £ £ £ £ £ £ £ 31st July, 1946, brought down .. 5,788 119 18,449 24,356 Administration and general expenses 1,112 6 394 1,512 Net surplus on transactions after 31st July, 1946, carried down .. .. 4,676 113 18,055 22,844 £5,788 £ll9 £18,449 £24,356 £5,788 £ll9 £18,449 £24,356 —» __ ===== „ Net surplus on transactions after 31st July, 1946, brought down.. .. .. 22,844 Balance, being final surplus on purchase and sale of 1945-46 season's production £ Net surplus on transactions up to 31st July, 1946 (as shown in accounts for year carried to Dairy-produce Account .. .. .. .. .. 1,114,605 ended 31st July, 1946) .. .. .. .. .. .. ..1,091,761 £1,114,605 £1,114,605

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DAIRY PRODUCE— continued Purchase and Sale and Revenue Accounts, 1946-47 Season's Dairy-produce purchased up to 31st July, 1947 Creamery Whey Processed Creamery Whey Processed Butter. Butter. Cheese. Milk. Total. Cr. Butter. Butter. Cheese. Milk. Total. Dr. & & & & & Sales net f.o.b.— £ £ £ £ £ Purchase on basis net f.o.b. 17,341,453 300,619 6,623,784 1,481,298 25,747,154 To United Kingdom .. 24,094,319 467,160 10,034,575 1,487,617 36,083,671 Transfer to Dairy Industry To other destinations .. 1,688,458 7,335 7,336 .. 1,703,129 Stabilization Account Stocks in store at 31st July, (being proceeds of increases 1947, awaiting shipment.. 394,962 8,213 266,065 .. 669,240 in sale prices of dairy- produce after 15th December, 1942).. .. .. 8,672,293 168,271 2,959,966 .. 11,800,530 Gross surpluses, carried down 163,993 13,818 724,226 6,319 908,356 £26,177,739 £482,708 £10,307,976 £1,487,617 £38,456,040 £26,177,739 £482,708 £10,307,976 £1,487,617 £38,456,040 Administration and General £££££ £££££ expenses, .. .. .. 47,331 821 18,079 4,043 70,274 Gross surpluses, brought down 163,993 13,818 724,226 6,319 908.356 Surpluses carried down.. .. 116,662 12,997 706,147 2,276 838,082 £163,993 £13,818 £724,226 £6,319 £908,356 £163,993 £13,818 £724,226 £6,319 £908,356 Net Revenue Account Dr. £ Cr. £ Storage on dairy-produce in store in excess of two months .. .. .. 23,194 Surpluses, brought down .. .. .. .. .. .. .. 838,082 Net surplus, carried to Dairy-produce Account .. .. .. .. 937,425 Interest on investments .. ~ .. .. .. .. .. 122,537 £960,619 £960,619

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Dairy-produce Account Br. £ £ Cr. Deficit on 1936-37 season's produce .. .. .. .. 276,850 Surpluses— £ Less payment from Consolidated Fund .. .. .. .. 276,850 1937-38 season's produce .. .. .. .. .. .. 576,724 .. 1939-40 season's produce .. .. .. .. .. .. 62,363 Deficit on 1938-39 season's produce .. .. .. .. .. 2,514,889 1940-41 season's produce .. .. .. .. .. .. 151,989 Balance, being net surplus from commencement of purchase up to 31st 1941-42 season's produce .. .. .. .. .. .. 773,252 July, 1947, transferred to Dairy Industry Stabilization Account— 1942-43 season's produce .. .. .. .. .. .. 734,657 Amount transferred previous years'accounts .. .. .. 2,605,444 1943-44 season's produce .. .. .. .. .. .. 575,576 Amount transferred 1946-47 year's accounts .. .. .. 960,269 1944-45 season's produce .. .. .. .. .. .. 1,154,011 3,565,713 1945-46 season's produce .. .. .. .. .. .. 1,114,605 1946-47 season's produee purchased up to 31st July, 1947 .. .. .. 937,425 £6,080,602 £6,080,602 Dairy Industry Stabilization Account : Transactions during the Year ended 31st July, 1947 Br. £ £ Cr. £ Additional administration costs, New Zealand Dairy Board .. 16,000 Balance as at 31st July, 1946 .. .. .. .. .. .. 4,703,240 Returned Servicemen's discounts, herd-testing service .. .. 7,000 Transferred from Purchase and Sale Account (Final), 1945-46 season .. .. 169,974 "Veterinary Services Council grant (section 18, Veterinary Services Transferred from Purchase and Sale Account, 1946-47 season .. .. 11,800,530 Act, 1946) .. .. .. .. .. .. .. 5,842 Transferred from Dairy-produce Account, 1946-47 season .. .. .. 960,269 28,842 Proceeds from increases in sale-prices of produce outside bulk agreement .. 60,882 Dairy-factory and farm-costs allowances .. .. .. .. 8,262,938 Payment from Consolidated Fund towards cost of stabilizing prices of butter and Subsidies on fertilizers, &c. .. .. .. .. .. 1,527,266 cheese on the local market ... .. .. .. .. .. 1,193,902 Cheese-crate pool stabilization payments to 31st July, 1947 .. .. 70,855 9,861,059 Increased costs of storage, of dairy-factory requisites, and of insurance to f.o.b. on increased values of dairy-produce .. .. .. .. .. 91,437 Balance as at 31st July, 1947 .. .. .. .. .. .. 8,907,459 £18,888,797 £18,888,797 Note.—The Dairy Industry Stabilization Account was opened in terms of the stabilization agreement between the Government and representatives of the farming industries (see annual report for 1942-43, pages 3 to 6). The debits to the account will be the costs allowances and other costs of stabilization in terms of the stabilization agreement. The credits to the account are (a) the surplus in the Dairy-produce Account; (6) the proceeds of increases in sale-prices received after 15th December, 1942.

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MEAT Administration and General Expenses Account for the Year ended 31st July, 1947 Dr. £ Cr. £ Salaries .. .. .. .. .. .. .. 6,613 Allowance for administration on sales of 1945-46 season's meat Office rent, maintenance, cleaning, telephones, and sundry expenses 967 after 31st July, 1946 .. .. .. .. .. 24,329 Postages, cables, printing, and stationery .. .. .. 1,079 Allowance for administration on sales of 1946-47 season's meat Travelling-expenses .. .. .. .. .. 284 up to 31st July, 1947 .. .. .. .. .. 55,053 Shipping inspection and refrigeration supervision .. .. 1,500 Allowance for administration on sales of bobby veal up to 31st Audit fees .. .. .. .. .. .. 383 July, 1947 .. .. .. .. .. .. 2,039 Depreciation (office and departmental equipment) .. .. 161 Exchange on remittances .. .. .. .. .. 3,485 Payment to New Zealand Meat-producers' Board .. .. 40,000 Subsidy, Public Service Superannuation Fund .. .. 30 Balance, to Meat Account .. .. .. .. .. 26,919 £81,421 £81,421

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Final Purchase and Sale Account, 1945-46 Season's Killings Dr. £ £ Cr. £ £ Stock on hand and loadings not departed at 31st Sales : Shipments to United Kingdom after 31st July, 1946 .. .. .. .. 7,046,162 July, 1946 Less preserved meat transferred to 1946-47 Lamb .. .. .. .. .. 5,262,906 Purchase and Sale Account .. .. 60,869 Wether mutton .. .. .. .. 491,769 Less pig-meat withdrawn from stock for local use 173,645 Ewe mutton .. .. .. .. 1,009,764 6,811,648 Beef and veal .. .. .. .. 886,707 Purchases after 31st July, 1946— Boner bull beef . . .. .. .. 76,476 Lamb .. .. .. .. .. 28,030 Boner cow beef .. .. .. .. 317,449 Wether mutton .. .. .. ... 1,882 Pig-meat .. .. .. .. 92,985 Ewe mutton .. .. .. .. 23,348 Offals .. .. .. .. .. 207,472 Beef and veal .. .. .. .. 65,318 8,345,528 Boner bull beef .. .. .. .. 3,638 Boner cow beef .. .. .. .. 11,587 Pig-meat .. .. .. .. 14,239 Offals .. .. .. .. .. 9,482 157,524 Allowance for administration and general expenses (f per cent. on sales, £6,487,823) .. .. .. .. .. 24,329 Transfer to Meat Industry Stabilization Account (being net proceeds of increases in sale-prices of Meat after 15th December, 1942) .. 1,857, 705 Less amount of increases in purchase-prices of Meat after Ist October, 1944 .. .. 970,308 887,397 Surplus on transactions after 31st July, 1946, carried to Meat Pool Account .. .. .. .. .. 464,630 £8,345,528 £8,345,528

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MEAT— continued Purchase and Sale Account 1946-47 Season's Killings up to 31st July, 1947 Dr. £ £ Cr. £ £ Purchases, Ist October, 1946, to 31st July, 1947— Sales : Shipments to United Kingdom up to 31st Lamb.. .. .. .. .. 15,083,451 July, 1947 Wether mutton .. .. .. 1,113,485 Lamb .. .. .. .. 12,764,348 Ewe mutton .. .. .. .. 2,267,960 Wether mutton .. .. .. 783,325 Beef and veal .. .. .. .. 3,244,137 Ewe mutton .. .. .. .. 1,604,887 Boner bull beef.. .. .. .. 219,923 Beef and veal .. .. .. .. 1,689,862 Boner cow beef.. .. .. .. 344,828 Boner bull beef.. .. .. .. 198,475 Pig-meat .. .. .. .. 1,019,820 Boner cow beef.. .. .. .. 195,021 Oifals .. .. .. .. .. 847,457 Pig-meat .. .. .. .. 552,648 Preserved meat— Offals .. .. .. .. .. 861,680 Stock transferred from 1945-46 Purchase and Preserved .. .. .. .. 612,806 Sale Account .. .. .. .. 60,869 19,263,052 Purchases .. .. .. .. 574,008 24,775,938 Allowance for administration and general expenses (§■ per cent. on sales, £14,680,671) .. .. .. .. 55,053 Transfer to Meat Industry Stabilization Account (being net proceeds of increases in saleprices of meat after 15th December, 1942) 4,582,382 Less amount of increases in purchase-prices of meat after Ist October, 1944 .. .. 2,695,811 1,886,571 Surplus on transactions up to 31st July, 1947, carried to Meat Stock on hand (including loadings not departed at 31st July, Pool Account .. .. .. .. .. 1,256,526 1947) .. .. .. .. .. .• 8,711,036 £27,974,088 £27,974,088

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Meat Pool Account to 31st July, 1947 Dr. £ Cr. £ Insurance on frozen and preserved meat .. .. .. 7,952 Balance as at 31st July, 1946 .. .. .. .. 8,931,174 Slipe wool (being adjustment of overpayment, season 1945-46) 355 Surplus on 1945-46 season's killings sold after 31st July, 1946 464,630 Surplus on 1946-47 season's killings sold up to 31st July, 1947 1,256, 526 Surplus on tallow sales .. .. .. .. 227,954 Kakariki Freezing- works (being surplus on transactions) .. 6,102 Interest .. .. .. .. .. .. 261,744 Payment by Ministry of Pood for storage on stocks in store Balance, being surplus to 31st July, 1947 .. .. 11,162,172 beyond agreed period .. .. .. .. 22,349 £11,170,479 £11,170,479 Meat Account Dr. £ Cr. £ Payment to War Expenses Account .. .. .. .. 33,073 Balance as at 31st July, 1946 .. .. .. .. 33,073 Balance as at 31st July, 1947 .. .. .. .. 26,919 Surplus from Administration and General Expenses Account .. 26,919 £59,992 £59,992

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MEAT— continued Meat Industry Stabilization Account : Transactions during the Year ended 31st July, 1947 Dr. £ Cr. £ Freezing costs subsidy (being additional costs other than wage Balance as at 31st July, 1946 .. .. .. .. 3,270,754 increases), season 1945-46 .. .. .. .. 3,116 Transfer from 1945-46 Purchase and Sale Account .. .. 1,857,705 Freezing costs subsidy (being additional costs from wages Transfer from 1946-47 Purchase and Sale Account .. .. 4,582,382 increases)— Transfer from Tallow Account .. .. .. .. 1,006,796 Season 1945-46 .. .. .. .. .. 2,165 i Pickled pelts (being surplus on transactions from auction and Season 1946-47 .. .. .. .. .. 280,553 30 per cent. United Kingdom allocations (Pickled Sheep Freezing costs subsidy (being additional costs due £ and Lamb Pelts Emergency Regulations 1947, Regulato forty-hour week)— tion 14)) .. .. .. .. .. .. 2,471,958 Season 1945-46 .. .. .. .. 6,716 Less recouped from Consolidated Fund .. 6,716 Season 1946-47 .. .. .. .. 21i*255 211,255 Subsidies on fertilizers and stock-food .. .. .. 1,293,673 Advertising in United Kingdom (including " background " advertising) .. .. .. .. .. 46,687 Payment by New Zealand Meat-producers' Board to Lord Mayor's fund for relief in respect of damage by floods in Great Britain (section 40, Finance Act, 1947) .. .. 125,000 Payment to New Zealand Meat-producers' Board to establish fund to provide for annual contributions to Veterinary Services Council (section 17, Veterinary Services Act, 1947) .. .. .. .. .. .. 500,000 Preserved meat : adjustment of price by Ministry of Food in respect of 1944-45 season's preserved meat .. .. 1,059 Schedule purchase-price increases from Ist October, 1944— £ Season 1945-46 .. .. .. .. 970,308 Season 1946-47 .. .. .. .. 2,695,811 3,666,119 Balance as at 31st July, 1947 .. .. .. 7,059,968 £13,189,595 £13,189,595

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Bobby Calf Pool Account to 31st July, 1947 Dr. £ I Or. £ Stock on hand and loadings not departed as at 31st July, 1946 56,664 Balance as at 31st July, 1946 .. .. .. .. 292,566 Purchases— i Sales— Season 1945-46 .. .. .. .. .. 209,362 I Shipments to United Kingdom of 1945-46 season's meat after Season 1946-47 .. .. .. .. .. 144,302 31st July, 1946 .. .. .. .. .. 410,173 Allowance for administration and general expenses (f per cent. Shipments to United Kingdom of 1946-47 season's meat up to on sales, £543,871), carried to Administration and General 31st July, 1947 .. .. .. .. .. 133,698 Expenses Account .. .. .. .. .. 2,039 Interest .. .. .. .. .. .. 9,136 Transfer to Bobby Calf Stabilization Account (being proceeds of increases in sale-prices after 15th December, 1942)— £ Season 1945-46 .. .. .. ..73,045 Season 1946-47 .. .. .. ..29,569 102,614 Stock on hand (including loadings not departed at 31st July, Balance as at 31st July, 1947 .. .. .. .. 387,896 1947) .. .. .. .. .. .. 57,304 £902,877 £902,877 Bobby Calf Stabilization Account: Transactions during the Year ended 31st July, 194/7 Dr. £ Or. £ Freezing costs subsidy (being additional costs other than wages Balance as at 31st July, 1946 .. .. .. .. 145,898 increases), season 1945-46 .. .. .. .. 7,110 Bobby calf-skins (being excess export realizations over payout Freezing costs subsidy (being additional costs from wages to producers, less subsidy on skins used in local manufacture) 202,436 increases)— £ Transfer from Bobby Calf Pool Account .. .. .. 102,614 Season 1945-46 .. .. .. ..11,945 Season 1946-47 .. .. .. .. 4,460 16,405 Freezing costs subsidy (being additional costs due to the fortyhour week): season 1946-47 .. .. .. .. 3,749 Balance as at 31st July, 1947 .. .. .. .. 423,684 £450,948 £450,948

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TALLOW Purchase and Sale Account fob the Year ended 31st July, 1947 Dr. £ Gr. £ Purchases .. .. .. .. .. .. 600,676 Sales to United Kingdom .. .. .. .. 1,708,157 Allowance for administration and handling .. .. 6,248 Sales to United States of America and Canada .. .. 117,264 Marketing-expenses .. .. .. .. .. 364 Sales to other destinations .. .. .. .. 14,895 Transfer to Meat Stabilization Account (being proceeds of Surcharge on soap exports .. .. .. .. 1,722 increases in sale-prices less increase in purchase fprices of tallow after 15th December, 1942) .. .. .. 1,006,796 Surplus, carried to Meat Pool Account .. .. .. 227,954 £1,842,038 £1,842,038 Revenue Account for the Year ended 31st July, 1947 Dr. £ Gr. £ Salaries .. .. .. .. .. .. .. 1,383 Allowance for administration and handling .. .. .. 6,248 Office rent, maintenance, cleaning, telephones, and sundry expenses 264 Postages, cables, printing, and stationery .. .. .. 549 Audit fees .. .. .. .. .. .. 65 Cost of remittances to manufacturers and others .. .. 441 Net surplus, carried down .. .. .. .. .. 3,546 £6,248 £6,248 Tallow Account Dr. £ Gr. £ Payment to War Expenses Account .. .. .. .. 5,705 Balance as at 31st July, 1946 .. .. .. .. 5,705 Balance as at 31st July, 1947 .. .. .. .. 3,546 Net surplus, year ended 31st July, 1947 .. .. .. 3,546 £9,251 £9,251

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WAR OFFICE CONTRACTS Purchase and Sale Account foe Year ended 31st July, 1947 Dr. £ Cr. £ Purchases .. .. .. .. .. .. 184,434 Sales .. .. .. .. .. .. .. 185,071 Gross surplus, carried down .. .. ... .. 637 £185,071 £185,071 Revenue Account for the Year ended 31st July, 1947 Dr. £ Or. £ Salaries .. .. .. .. .. .. 200 Gross surplus, brought down . . . . .. .. 637 Postages, cables, printing, and stationery .. .. .. 225 Telephones, rent, and sundry expenses .. .. .. 62 Net surplus .. .. .. .. 150 £637

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MARKETING DEPARTMENT (EXPORT DIVISION) Balance-sheet as at 31st July, 1947 Liabilities & Assets Cash— £ £ Sundry creditors for accrued charges and sundry credit balances .. 5,910,801 Held in London .. .. .. .. .. 568 Farm products stabilization accounts— £ Reserve Bank of New Zealand— Dairy Industry Stabilization Account .. .. .. 8,907,459 Dairy Industry Account .. .. .. .. 1,046,048 Meat Industry Stabilization Account .. .. .. 7,059,968 Sundry Products Account .. .. .. .. 931,197 Bobby Calf Stabilization Account .. .. .. 423,684 16,391,111 1,977,813 Meat Pool Account .. .. .. .. .. .. 11,162,172 Less Meat Industry Account .. .. .. 179,455 Bobby Calf Pool Account .. .. .. .. .. 387,896 1,798,358 Net surpluses on administration allowances— Sundry debtors for produce and amounts accrued due .. .. 1,378,673 Meat Account .. .. .. .. .. 26,919 . Stocks .. .. .. .. .. .. .. 9,437,580 Tallow Account .. .. .. .. .. 3,546 Investments in Treasury bills and Government stock .. .. 21,200,000 War Office Contracts Account .. .. .. 150 Office and departmental equipment .. .. .. .. 9,003 30,615 Advances to Milk Marketing Division .. .. .. .. 58,981 £33,882,595 £33,882,595 1 ===== G. M. POTTINGER, Acting-Director. W. J. Pratley, Accountant. I hereby certify that the several Purchase and Sale and Revenue Accounts, Administration and General Expenses Accounts, together with the Balance-sheet as at 31st July, 1947, have been examined and compared with the relative books and documents submitted for audit, and correctly state the position as disclosed thereby.— J. P. Rutherford, Controller and Auditor-General.

Approximate Cost of Printing.—Preparation, not given; printing (1,408 copies), £166.

By Authority: E, Y, Paul, Government Printer, Wellington.— 1948. Price Is. 3d.

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