Many agricultural products are produced only for local sale, although occasionally there may be small surpluses for export. The marketing of some is largely controlled; others are sold entirely by private trading.

Wheat

Wheat, the most important cereal, is the only farm product in New Zealand under a system of virtual State trading. A Wheat Committee, comprising representatives of the Government, the growers, the flourmillers, and the poultry-industry producers, disposes of all milling wheat at prices fixed by the Government and also arranges for imports of wheat.

Other Cereals, Seeds, Peas, and Linseed

There is no price control of these, which are sold by private trading. With barley for malting, oats for milling, and linseed, a system of contract growing, between the industries concerned and the farmers, ensures an adequate and regular supply of the required quality. There are some similar arrangements for peas and seeds, although many seed crops are grown as surplus pasture growth on the chance of a good sale.

Vegetables

Vegetables for canning or deep freezing are mainly grown on contract. Vegetables grown for the commercial markets are sold by auction, which, with climatic changes in supply, makes for violent price fluctuation.

Stone and Berry Fruits

These are marketed by auction and by direct purchase. There is no organised marketing system and no price control, but some berry fruits are grown on contract for processing.

Potatoes

Potatoes present a difficult marketing problem. Variations in yield lead to unforseeable gluts and shortages; and potatoes will not carry over from one season to the next. A shortage of potatoes noticeably affects the Consumer Price Index and can therefore be of great economic importance. Shortages also encourage excessive planting, with a possible glut the following year. There are very limited possibilities to export and import potatoes. In 1950 the Government established the Potato Board, with producer and grower representation. The Board contracts at agreed prices with growers for an estimated necessary acreage. It levies all suppliers to build up a fund. If there is a surplus, the fund is used to pay growers a minimum price sufficient to meet basic costs of seed, fertiliser, and cultivation. The Government does not subsidise the industry, but will, if necessary, guarantee its overdraft.

Tobacco and Hops

Tobacco is grown under contract to the tobacco manufacturers, who work through the Tobacco Board. The price is fixed by the Trade Practices and Prices Commission and is based largely on cost of production. Hops are not grown under contract, but the price is fixed in the same way as that of tobacco. The Hop Marketing Committee sells the crop.

Citrus Fruit

Locally grown lemons and oranges, but not grapefruit, are marketed through a Citrus Marketing Authority. There is no guaranteed or any other form of controlled price.

Honey

Honey production varies considerably with the season. In a normally good season there can be a substantial surplus for export. The marketing of honey is not strictly controlled, though there is a Honey Marketing Authority. Growers can sell where they wish, but all honey sold locally bears a levy of 1d. a pound, which the Authority uses as a fund to compensate any loss on exports. The Authority has to take any honey which growers are unable to sell and dispose of it, mainly by sales to institutions and by export. The retail price of honey sold locally is controlled by the Government.

Eggs

Egg marketing also has its special difficulties. Production fluctuates with the season. Eggs are perishable and, being an important item in living costs, are subject to price control. The Egg Marketing Authority, set up in 1953, tries to see that all districts have a constant supply of fresh eggs. This means adjusting prices over the year, moving eggs from one district to another, and, to ensure an adequate winter supply, budgeting for a surplus the season before. This surplus is pulped and most of it sold to bakers and pastrycooks.

Milk

Ninety per cent of New Zealand's milk is used in the manufacture of butter, cheese, etc. The remainder is sold locally. Selling milk needs careful and complicated organisation, for it must be supplied to almost every household. Supplies often come from a distance. The Milk Board which comprises representatives of the Government, producers, vendors, consumers, and local authorities, is the central authority. Suppliers are grouped into local cooperatives, which guarantee daily quotas to the Milk Board. Prices to producers, margins to sellers, and prices to consumers are all fixed.