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

Low Rates

Low Rates

The new railage rates for artificial manures conveyed by train are so low that distance by rail from the point of manufacture will make little difference to the landed cost at the farm.

Some typical rates for manure in six ton lots are:

Miles Per Ton
50 5/8
100 8/2
200 11/7
300 15/-
440 20/-
600 25/7
(Ton lots 25 per cent. additional)

“The price which the farmer has to pay for his fertilisers naturally has a decided bearing upon the extent to which he will make use of them, and a good deal of unrest has existed regarding this question of selling prices, farmers having considered that, as regards fertilisers-, particularly those derived from Nauru and Ocean Islands, the prices charged to them were too high.

Two Conferences held.

“With a view to doing its share towards reducing the cost to farmers, the question of existing railway rates for the carriage of fertilisers has been examined, and a decision arrived at that these rates shall be materially reduced. Before bringing about this reduction, however, it was deemed desirable to confer with the various interests concerned in the manufacture, handling, and sale of fertilisers with a view to obtaining a practical form of co-operation by further reductions on their part also. Two conferences have, therefore, been held, at which representatives of manufacturers, distributors, freezing companies, and harbour boards were present, together with Ministers and Departmental officers. At these conferences the matter was discussed in its various aspects, and following them there has been considerable correspondence with the interests concerned, including shipping companies engaged in coastal trade.

“Some result has been attained and each section of the trade has been able to express its views, hence the position is clearer now than heretofore, and it is hoped that in due course further improvements which will be of benefit to producers will come about.

“As regards the railway concession, it is anticipated that the cheaper rate at which the farmer will be able to secure fertilisers will result in a much increased use of them, and a markedly greater output of primary produce for carriage on the railways, thus going a long way towards offsetting the reduced rates.

“The manufacture and sale of superphosphate is now one of the most important factors in the fertiliser trade, and the manufacturers have agreed to supplement their reductions in prices made just recently by a further reduction of ⅙ per ton.

“This present reduction of ⅙ per ton would no doubt have been greater but for the fact that the price of raw materials for superphosphate manufacture was recently increased by 4/- per ton. This increase in price of raw page 7 materials was unavoidable, as regards rock phosphate, consequent upon prolonged bad weather conditions at Nauru and Ocean Islands having prevented normal shipments and created a shortage which had to be supplied at higher cost from outside sources by the Phosphate Commission, which spread the increase over all supplies, thus establishing an assured stability. There has also been an increase in the price of sulphur.

“The freezing companies have agreed to reduce their prices pro rata to those of the manufacturers. The Wellington Harbour Board has made a reduction of 1/- per ton in its wharfage rates for material landed direct into railway trucks, and the Auckland Harbour Board has made a small reduction in its wharfage rates on sulphur, which is an essential in the manufacture of superphosphate. The Dunedin Harbour Board, it may be mentioned, made a considerable reduction last year.

“As regards the coastal shipping companies, they already have a reduced rate for fertilisers, and intimate they are unable to do more.

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.”