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PRODUCE SECTION Potatoes The 1947 main crop was just sufficient to meet requirements till the end of 'November, by which time new potatoes were available in quantities sufficient to meet all demands. The yield of new potatoes in all districts, was heavy particularly in the main producing areas of Pukekohe, Hawkes Bay, and Gisborne. Prices fell well below ceiling during the latter half of December and in January, during which months growers placed heavy quantities on the market, particularly at Gisborne. In this district the quality of the potatoes suffered from transport difficulties and from a particularly hot summer. It seems clear that the Poverty Bay district should concentrate on getting their potatoes marketed not later than the end of November. Hawkes Bay crops were also very heavy, and in February it was necessary, in order to conserve supplies and avoid wastage, to issue a transportation restriction order, the effect of which was to hold back for a month the marketing of potatoes from, the Manawatu-Rangitikei area, where there was better prospect of the potatoes keeping,, so that a prompt market could be found for those from Hawkes Bay. This transportation order was removed in March, and the marketing of the Manawatu-Rangitikei crop proceeded. It was then found that as a result of the delayed digging, potato-moth, which was particularly prevalent last season owing to weather conditions, had developed in a portion of the crop. It was necessary for the Department to compensate those contract growers who incurred losses due to the operations of the Transportation Restriction Order for both moth damage and for February potatoes sold at the lower prices ruling in March. Committees representing the Department of Agriculture, representatives of growers and merchants, the official Grader, and Marketing Department were set up to assess the Government's liabilities under the contracts. These Committees functioned satisfactorily. To allow time for the clearance of the heavy North Island crop in all districts restrictions were placed on shipments of South Island potatoes to the North Island up to the end of May, permission being granted for the shipment of seed potatoes. Transport from the South to the North Island proved to be very much easier this year than for the past few years. As soon as the South Island restrictions were removed potatoes went forward to all North Island ports in quantities, sufficient to keep the markets fully supplied. South Island yields, like those in the North Island, were exceptionally heavy this year, and although the total area planted in potatoes for the 1947-48 season was only approximately 19,300 acres, as against an estimated 21,000 necessary to ensure sufficient supplies in an average season, it has been obvious during the past few months that there is likely to be a very substantial surplus at the end of the season. Every possible export outlet has been explored, but without success, and the possibilities of dehydration for human consumption, stock-food use, and starch-manufacture have also been examined.. Such uses have been proved to be uneconomic and would only result in substantially increasing the loss which would eventually be incurred. It is unfortunate that the heavy crop this year coincides with a surplus of potatoes in almost all producing countries. During the past few months substantial exports of potatoes have been made from United States, Great Britain, Holland,' Italy, and Australia. These countries have advantages over New Zealand through their proximity to potential markets, with consequently lower freight rates and less risk of deterioration. At the date of this report a decision has been reached by the Government, in response to urgent representations by growers, to take over all contract grown f.a.q. potatoes still in growers' hands at 31st October, instead of at the original contract date, 30th November, and arrangements to carry out that decision are now being made. It has also been announced that the present contract system will be continued to cover next year's production, but that it is expected that for future seasons growers and merchants will devise a marketing scheme which will replace the present system under which heavv liabilities are undertaken bv the Government.

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