A PROMISE HONOURED.

Auckland Star, Volume LXVII, Issue 184, 5 August 1936, Page 6

A PROMISE HONOURED.

The Government has kept its promise to the dairy farmers, but has gone no further. Recent market movements have had no apparent influence on the price schedule, and the basis remains as originally announced, the average of the past eight to ten years. In the present condition of the overseas market there is an 'understandable feeling among farmers that the figure fixed means a disappointment of their hopes, but they should postpone their judgment. In the early part of the season the London market for Dominion butter is usually stronger than in the peak months of production, and at the moment the position is further improved by several other factors, such as lower European output and a possible American demand, favourable to New Zealand. A considered judgment on the Government's scale of guarantees cannot be formed until the latter part of the season. Meanwhile, it can be said that Mr. Nash and his advisers have shown commendable restraint in resisting any temptation or pressure to raise the price during the period of waiting. So far as can be seen the figure remains as fixed at least three months ago, and had the announcement been made then much disappointment and possibly heart-burning would have been saved. The advantages arising from delay in this instance are less apparent than the disadvantages.

At the price now fixed, 12 9-16 d impound for best butter, the farmer will receive a slightly larger return than last season, and cheese suppliers should be in a much improved position. Against this, of course, farmers generally will have lo meet increases in the cost of living and farm wages, but this may be offset, in many eases, by mortgage relief. "The guaranteed price is inextricably linked up with the adjustment of the dairy farmer's debts," says Mr. Nash. But its intended use as a lever towards mortgage revision is much more far-reaching than this statement would suggest. All mortgages, urban included, may be brought under review. If Mr. Nash's remarks mean anything of value to the farmer they mean mortgage reduction, that is, perhaps a cut in both principal and interest. How will this affect the mortgagee who in numerous cases is a small investor with no means of recouping his loss and has to face a rise in the cost of living equally with the mortgagor? It will not be an easy matter to help the one without hurting the other, and the problem is likely to be exceedingly difficult to handle. It is made more difficult by the cost raising activities of the Government.