FARM PRODUCTS

Press, Volume LXIX, Issue 20986, 14 October 1933, Page 18

FARM PRODUCTS

A GUARANTEED PRICE LABOUR PARTY'S POLICY (SrECIALLI WRITTEN FOB THE PBES3.) [By It. A. WILSON.] The Labour Party in New Zealand has adopted as a plank of its platform a proposal that farmers in New Zealand shall be guaranteed prices for their produce, and in a discussion on exchange in the House lately, one of the Labour members stated that this price should be based on the average prices of the last seven years. It may be worth while examining this proposal in more detail, as I have never seen it worked out and reduced to concrete form. Dairy Produce. Let us take the dairy industry first. The following are the average prices I have received for a pound of butterfat in the last seven years:— 192P- 1927. 1928- 1929- 1930- 1931- 193227 23 29 30 31 32 33 1/4 1/6 1/61 1/4 1/01 1/- 9£d But the foregoing are New Zealand currency prices, and the Labour Party j apparently proposes to keep our ex-1 change at par. The price last year! therefore, on a sterling basis, would be reduced to 7d. The average for the last seven years would thus be about Is 2d, and the amount to be made up to the dairy-farmer for last year's production would be about 7d per lb, or about £65 a ton. Turning cheese production into lbs of butter-fat, and calculating the Home consumption as 25 per cent, of the total of dairy produce, we find that New Zealand produced last year somewhat in the region of 250,000 tons of butterfat, which, at £65 a ton, would amount to about £16.000.000. Sheep Products. Similarly, with the lamb trade, we can export about eight million carcases, and last year's prices were at least 5s a head below the average of the last seven years. So a subsidy of £2,000,000 would be required here. For wool, if we take the price last year as at least £5 a bale under the seven-year average, the subsidy required would be about £2,500,000. On our other products, such as tallow, skins, flax and timber, several millions more subsidy would be required. Our subsidy total would amount to well over £20,000,000. Where's the Money ? How would the subsidy be paid ? It might be borrowed, but if it were

some form of compulsion would probably have to be adopted to prevent the price of interest rising. Judging by the declarations of members of I the Labour Party, the way they would I provide the subsidy would be by the issue*of currency notes. Now, what would be the position of the New Zealand £ in the eyes of the world if deficits of the order of £20,000,000 were being met by the issue of paper money? Undoubtedly if this policy were adopted we would see the New Zealand £ depreciate to such an extent that our present exchange rate would seem moderate in comparison. Capital is international, and the withdrawal of capital under these conditions would create a situation that would be quite beyond the power of the Government to cope with. Difficulties of Administration. I have said nothing here about the machinery necessary to deal with these subsidies or the difficulties that v/ould be met with in deciding what subsidy should be paid on each particular product. The cost would be very large and misrepresentations and peculations inevitable in handling these large sums would raise difficulties which would make our present unemployment fund and its administration seem child's play in comparison. The inevitable result, of the policy would be that the exchange rate would be forced much higher than at present, and the declared policy of the Labour party to keep the exchange about par would be quite impossible of fulfilment.

TROPHIES OF THE SHOW RING. The above formidable array of trophies represents successes of the Gorriedale and Shropshire flocks of Cochrane Bros., Elgin, Ashburton. Most of the trophies were secured at Canterbury shows last year.