H.—3oa.

Arrangements were made by this Division for the supply of potatoes for these shipments to Sydney through those firms in the South Island producing centres who have been regularly engaged in the handling of potatoes for many years past. Very rigid conditions as to quality were laid down, and every possible care was taken to see that the quality of shipments were maintained at the highest possible standard, as it was felt by all parties that it was essential that quality should be the first consideration in the hope that the shipments being made would pave the way for permission for further importation to Australia in future years. In this connection the Division would like to record its appreciation of the co-operation received in achieving this end from all parties—farmers, merchants, Inspectors of the Department of Agriculture, waterside workers, and shipping companies alike. With the arrival of the first shipment in Sydney at the end of July, general approval was expressed of the quality, though attention was drawn by the Commonwealth Authorities to the presence of " silver scurf" on some lines, and one parcel was rejected on this account. Silver scurf is a fungoid growth slightly affecting the skin of the potato, but is taken off in peeling and is of no consequence as far as the commercial value of the tuber is concerned. As silver scurf is prevalent throughout Canterbury it was thought advisable to arrange for the Director of the Fields Division, Department of Agriculture, to be in Sydney when the next shipments arrived, and as a result of his negotiation with the Commonwealth Authorities they agreed to disregard silver scurf provided that the quality of the potatoes was satisfactory in other respects. This was eminently satisfactory, as had the restriction on potatoes affected with silver scurf been maintained it would have been almost impossible to forward any further shipments. The price paid by this Division for potatoes for export was based on the prices expected to be realized in Australia, so that as far as possible growers should get the full benefit of the Australian market, although the necessary heavy expenses incurred in regrading and repioking, packing in new sacks, &c., to bring the potatoes up to export standard reduced the equivalent " on trucks " price to a relatively low one. The first shipments in July, August, and September showed a small margin of profit to this Division, but the October shipments, which were increased by permission from the Commonwealth for a further 1,000 tons in that month, arrived to a bad market. October is always a very risky month in which to ship potatoes to the Sydney market. This was recognized by the officers of the Division, and the risks attached to consignments in that month were also brought under our notice by the Sydney agents who were acting for the Division under the arrangement made with the Australian Government, but after very careful consideration it was felt to be strongly advisable to ship the 3,000 tons in October despite the prospects of a loss, it being considered imperative to keep faith with the Australian Government and ship the full quantity for which permission for import had been granted. Furthermore, these 3,000 tons were a portion of the surplus on the New Zealand market which were of no value and would have been left to rot had they not been shipped to Australia. It was therefore decided that to preserve the good will of the Australian authorities for the prospects of shipments in future years, and in the interests of the New Zealand potato-growers, these 3,000 tons should be shipped despite the risks involved in October shipments. A considerable portion of these shipments were of the Dakota variety, which is regarded as one of the best keeping varieties for late deliveries and of which there was a very substantial surplus held by North Canterbury growers, but this variety proved to be very unpopular with the Australian public, and it became evident that in the event of shipments in future years no Dakotas should be shipped. The drought in New South Wales during September and October had the effect of causing growers there to dig their new season's crop considerably earlier than usual to avoid their complete loss, and these potatoes were rushed on to the Sydney market in larger quantities from the New South Wales coastal districts during the latter half of October and early November, with the result that our potatoes, particularly Dakotas, arrived to a very poor market, and the final outturns for the season's shipments to Australia resulted in a loss of £4,488. The total quantity shipped to Sydney was 5,892 tons and afforded a very large measure of relief to growers, as the whole of this quantity would otherwise have been added to the unmarketable surplus, which, despite these shipments to Australia, still amounted at the end of the season to a quantity estimated at 5,000 to 8,000 tons. The general " get-up " and quality of our shipments to Australia wore very favourably commented on, and we are hopeful that the efforts made over many years for the removal of the embargo, which have now reached a successful culmination, will result in further shipments to our mutual advantage when opportunity offers. Efforts were made during the past year to find other outlets for export, and all likely prospects were carefully investigated. During August it seemed possible that some export to South America might eventuate, but it was found impossible to secure freight. Some small shipments were made to Singapore, but the demand there was not sufficient to be of any material consequence to the New Zealand grower. In order to stimulate and increase consumption locally, the Division conducted an advertising campaign through newspapers and over radio through the commercial stations stressing the food value and cheapness of potatoes as an article of diet, and giving numerous recipes for the use of potatoes in various manners of cooking. Inquiries indicated that the measures thus taken were successful in increasing the consumption throughout the Dominion. Another direction in which assistance was given to producers was by railway concessions to facilitate the sale of undergrade potatoes for stock-feeding purposes. These arrangements, completed after consultation with the Railways and Agriculture Departments, provided free railage of up to one hundred miles in the South Island.

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