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War Economy

Bulk Purchases of Food Continue

page 524

Bulk Purchases of Food Continue

Early in 1944 long-term contracts with the United Kingdom had been agreed upon, covering, initially, the seasons 1944–45 to 1947–48. Prices payable under the original wartime bulk purchase agreements were again raised, and it was at this time that the lump sum payments were initiated to compensate New Zealand for the disparity between bulk purchase prices and the prices she had had to pay for imports.1

Thus, when the war ended, New Zealand had an assured market for some years for her exportable food production.

The original bulk purchase arrangement for wool was not extended. It was to continue for one season's clip after the war. The arrangement terminated after the 1945–46 season. The situation for wool was quite different from that for the food products. Huge stocks of wool had accumulated, and their satisfactory disposal was expected to take many years.

On the other hand, the shortages of food were expected to continue. The Agriculture Department wrote:2

‘In 1944 contracts were negotiated for the bulk purchase of meat and dairy produce up to 1948. It was recognised at this stage that there could be no sudden return to a system of free markets after the war; world-wide shortages would make a system of controlled marketing essential and at the same time they would give producers a degree of stability during the transition from war to peace.’

United Kingdom Government communications, initiating the discussions which led up to the 1944 long-term contracts, are most interesting in the light of later developments.3 The United Kingdom Minister of Food wrote in December 1943:4

‘My Ministry has been surveying the meat position with the object of ensuring that supplies may be available for a reasonable period ahead. I am told that the production of meat in New Zealand has not as yet been increased to any great extent (although steps which have been taken may be expected soon to produce results) and that the most effective way to increase it may be to give producers the confidence that would result from a long term arrangement to purchase their exportable surplus. We are accordingly prepared to discuss the purchase of your exportable surplus meat until the end of 1947.’

1 See also pp. 3823.

2 Parliamentary Paper H–29, Annual Report of the Department of Agriculture, 1954, p. 7.

3 See pp. 5546.

4 This and his March 1944 communication are quoted in Parliamentary Paper H–30, Marketing Department (Export Division) annual report, 1944, p. 3.

page 525

Again, in March 1944, he wrote:

‘As you know the world supply position for milk products is causing us some anxiety and I believe your Government views with some concern the steady decline in exports from New Zealand to the United Kingdom and Allied nations. You may consider a long term contract for a period similar to that suggested for meat, about which I wrote you on 31st December last, may not only help to stem this decline but may well stimulate production to an extent that would enable exporting to be resumed on a scale more nearly approaching that of immediate pre-war years. We are therefore prepared to discuss with the representatives of your Government the purchase of your exportable surplus butter and cheese for period ending with your 1947–48 production season.’

The arrangements concluded were for Government-to-Government sales, but there was to be consultation ‘as to ways and means of securing an orderly transition to the resumption of private trading if and when the present control is withdrawn or modified….’1

1 H–30, 1944, p. 6. In the agreement this provision was spelled out only for dairy products.