The Press THURSDAY, NOVEMBER 4, 1937. Private Enterprise Without Losses

Press, Volume LXXIII, Issue 22241, 4 November 1937, Page 10

The Press THURSDAY, NOVEMBER 4, 1937. Private Enterprise Without Losses

The success over any long period of the guaianteed prices scheme for dairy produce must depend more than anything else on the ability of those who administer the scheme to withstand political pressure by the dairy farmeis. If the Dairy Industry Account is made as neai y as possible a price equalisation fund, and if the determination of the guaranteed price is left to a committee of impartial experts, then there is a fair chance that the scheme will not throw heavy financial burdens on the rest of the community and will bring greater economic stability to the dairy farmers. On the other hand, if the hungry clamour of the beneficiaries is allowed to influence the administration of the scheme, it will soon become heavily insolvent and will not in the end bring stability to the dairy industry. There is only one way to withstand pressure such as is now being exercised by the dairy farmers. It is to declare the underlying principles of the scheme from the outset and to adhere to those principles unflinchingly; uncertainty and vacillation inevitably encourage the agitation for a more favourable scale of benefits. It is therefore unfortunate that the guaranteed prices scheme for dairy produce has from the first been enveloped in a fog of doubt. On one point alone there is complete agreement among Ministers: any loss in the Dairy Industry Account will be made good by the State. On almost every other point Ministers have contradicted on© another or resorted to baffling vagueness. Mr Lee Martin has argued that the scheme differs hardly at all from a price equalisation scheme. Mr Nash has said that future “ surpluses will be need as a reserve against “ lean years.” Mr Nash has also said that surpluses will be used “for the benefit of the “industry,” thus leaving the way open to the payment of a bonus. And now the Prime Minister has announced that “if exceptional cir- “ cumstances arise there is no reason why the “guaranteed price for any season should be “regarded as unalterable” The “exceptional “circumstances” which the Minister has in mind are increased prices on the London market; and any alteration will be an upward one. The dairy farmers may get more than the price fixed for the season; but they can “ rest “assured that they will get that price, how- “ ever far the market may fall.” It has been left to Mr Coates to carry to it? logical conclusion this policy of socialising losses and leaving profits to the private capitalist. “As soon “ as the Government gets rid of this involved “ system,” he told the House of Representatives, “ and gives the farmer a guaranteed minimum “and allows him to take advantage of the “world market the better it will be for everyone.” In Auckland, only the previous day, Mr Coates was extolling the virtues of “ robust “independence” in economic life. It is time the Government, the Opposition, and the dairy farmers did some plain thinking about the relations between the State and industry. If it is sound to socialise losses and leave profits to the private capitalist, the whole community can be made prosperous by an all-round distribution of double-headed pennies. Something more than the solvency of the Dairy Industry Account is involved in this confusion of thought over the implications of State guarantees to industry against loss. It is not an exaggeration to say that the guaranteed prices scheme is on the way to becoming a menace to democratic institutions.