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The New Zealand Railways Magazine, Volume 1, Issue 6 (October 24, 1926)

Intermediate Costs

Intermediate Costs.

“The distributors and manufacturers of mixed manures definitely expressed the opinion that they could make no reductions as regards their share of the intermediate costs, but as regards any material for incorporation into mixed manures obtained at the reduced price from the manufacturers, the reduction will be passed on to the consumers, together with any saving effected by the reduced railway rates upon it.

“In considering this aspect of the general question, it must be borne in mind that the distributors’ margins throughout the Dominion have recently been reduced, the reduction varying, on a pro rata basis, according to the arrangement previously existing. As the distributor, whether handling mixed manures, superphosphates, or other fertilisers, has to carry the risk of bad debts, he needs a margin to cover this risk, and it is proposed later to have further discussions with those concerned. The whole question of fertiliser prices to farmers and its bearing upon the necessity for an increased output of primary products is one of national importance which can well be discussed in a good spirit from that standpoint.

“The reduction in railway rates, which will apply to all fertilisers, will be one of 40 per cent. for truck loads, and 25 per cent. for lesser quantities over one ton, and it will come into force as from 30th August. The cost of this reduction will be borne in the proportions of one-third by the Railway Department and two-thirds by the Department of Agriculture.

“It may be added that the manufacturers and other interests concerned have given an assurance that all monetary benefits accruing from this reduction in railway rates will be passed on to the producers.

“In conclusion, I desire to express my thanks to those representatives of the various interests concerned who visited Wellington for the purpose of these discussions, and my appreciation of their frankness in furnishing information, and their desire to co-operate with the Government in this very important matter.”