The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun FRIDAY, MARCH 5, 1937. GUARANTEED PRICES.

Auckland Star, Volume LXVIII, Issue 54, 5 March 1937, Page 6

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun

FRIDAY, MARCH 5, 1937. GUARANTEED PRICES.

For the cmuue that lackt assistance. For th» tcrong that needs re»istano% For the future in the distance, And the good thiti tee omn do.

"This year," said the Minister of Finance, in his final speech in the House of Representatives on the Primary Products Marketing Bill, "we propose to pay a price (for dairy produce) as previously outlined. That may result in an overdraft, and it may not . . . "

The conclusion of the survey, necessarily tentative, of the state of the Dairy Industry account, published in the "Star" yesterday, is that the overdraft at the end of the first year of guaranteed prices is likely to amount to a sum between 2J and 34 million pounds. The possibility of such a result after the first season was, of course, fully realised by the Government. As the Minister put it ". . . if there is a shortage in the account, that means we have kept the farmer on a stabilised position anyhow," and he added that if this year's market prices were not enough to meet the guaranteed price, "it is still in the interests of the economy of the country to pay that Iprice to the farmer, even if we do not recoup the margin." It is worth while to reconsider these words in the light of what seems certain to be the first year's experience.

At present the dairy farmer is receiving for his produce more than it is worth in the! market, and whatever the course of the market may be in the remaining months of the season he is assured of his fixed price. That gives him an advantage which some of his spokesmen far too frequently and too obviously ignore. They prefer to focus attention on the other side, on the increase in costs which is due partly (certainly not wholly) to the other legislative Acts of the Government. This they do for the easily apparent reason that next year's guaranteed priee is to be calculated on a different formula, which will include, among other factors, production costs. Hence the agitation, which will grow in volume in the next few months, designed to convince the Government and the country that the state of the dairy industry is such that nothing but a substantial increase in the guaranteed price will suffice to save it. Some increase, undoubtedly, will be shown to be necessary but the national interests demand that some current over-statements of the industry's case should not be allowed to become fixed in the public mind asr unassailable facts. For the level of the guaranteed price is not a matter of concern only to the dairy industry.

If at this time, with the market price below the guarantee, and a consequent possibility of Jhe deficit in the Dairy Account exceeding! £2,000,000, the general public were able to note that the industry was silently contented, the public might conclude that such a happy sight was worth the possible cost. Instead it sees a prospect that this possible cost will be enormously increased next year, with no certainty even then of the industry being satisfied. Such a prospect is certain to induce a doubt as to whether the guaranteed price system, which, according to some of its critics, has disadvantages far outweighing its advantages, should be retained. Does the dairy industry wish this doubt to grow? Would a reversion to the former system suit it better?