THE GUARANTEED PRICE

Press, Volume LXXV, Issue 22767, 20 July 1939, Page 11

THE GUARANTEED PRICE

“CONVERSION OP RECEIPTS” i COMPLAINT AGAINST GOVERNMENT MR MULHOLLAND’S REPLY TO PRIME MINISTER That the Government has converted sterling receipts for dairy produce into New Zealand currency, at a figure “much below its real value,” is claimed by the president of the New Zealand Farmers’ Union (Mr W. W. Mulhoiland) in a reply to statements on the guaranteed price policy of the Government by the Prime Minister (the Rt. Hon. M. J. Savage). Mr Mulhoiland also suggests that even had there not been a guaranteed price, the improvements made in the marketing system in London might have been effected in the last few years. Mr Mulholland’s statement follows: “The Prime Minister’s statement m reply to mine of July 15 contains a lot about me as well as various other irrelevancies, but throws little light on the matter under discussion. His discussion of me personally is of no moment, but what is important is what he means in regard to the dairy industry. He did say in answer to Mr Barrell's question in the House of Representatives: ‘lt would be impossible for any Government to disregard Hie statements made against guaranteed prices, both inside and outside this House. Members have claimed that the farming districts voted against guaranteed prices by sending opponents of the system to Parliament. There would appear to be something in that, and if the dairy farmers think they can do better under the old system of rising and falling prices, it will be the duty of the Government to devise ways and means of meeting them.’ And then in a press interview later *We have made an honest effort to improve the position of the dairy farmers of New Zealand, and if what we have done has not proved satisfactory to the farmers, themselves we will have to consider seriously what alternative steps should be taken.’

“A Ee traction?” “Because I assumed that file Prime Minister meant what he said, he has loosed off a whole column of print at me, the general tenor of which seems to be a retraction of his Parliamentary statement. Shorn of its irrelevancies. his press statement seems to boll down, to two points—that the dairy farmer is this year getting £2,000.000 more than his prot-uce will realise on overseas markets; and that Mr Savage desires to know whether the dairy farmers want the guaranteed price, or —what? “With regard to the £2.001X000 more than market realisation winch the Prime Minister says that the dairy farmers will receive this year, this is a debit against them in the dairy account, which will be reduced by the half million pounds surplus from last year; the balance remaining a charge against the realisations of future years. It is an advance which bag to be repaid. But the- Government, by converting the sterling receipts for dairy produce into New Zealand currency at much below its real value, baa deprived the dairy industry account; and consequently the farmers, of more tban £2,000,000 this year and by tbig awmg the industry has been compelled to pay a subsidy of this amount to the rest Of the community Changed Conditions “Any discussion whether dairy farmers want the guaranteed price must of necessity be in relation to some alternative marketing proposal. The Prime Minister seems to suggest that the alternative would be the conditions of 1935. But they are not available, partly because this is 1939, and partly because they do not now exist. Prices are at a very different level; factories considered to be in excess of requirements have disappeared; trade connexions with British merchants have been broken off, to mention only a few of the changes, many of them irrevocable, that have taken place. “And it cannot be assumed that the organisation of the industry would have remained static in the last five years. Probably the very real improvements which the Government has brought about in the organisation of marketing in London would have been as far advanced by now whether these had been a guaranteed price or not. In 1935 the Dairy Board had a marketing scheme prepared which was largely used by the Government in putting its scheme into operation. At the same time the industry was seriously considering the problems of overlapping in cream collection and uneconomic competition between factories as well as problems raised by the competition of proprietary factories. The great service that the present Government has rendered' to the industry has not been in initiating these reforms but in speeding them up, and I freely acknowledge its courage in doing so. This, however, does not the property of the Government which the Government has the eight to withhold from the industry at its pleasure; as Mr Savage seems to suggest. Consequently the alternative to the guaranteed price; on which the industry Is asked to express an opinion, cognisance of these facts. My *ccol assumption’ was that Mr Savage knew these things and was talking seriously. The last sentence in Mr Savage’s statement suggests that he ha« no intention of taking any action and Ms desire *to know from farmers if they would favour scrapping that policy.* becomes a purely academic question, and it is a question that cannot. usefully be discussed on an academic basis.

“I am sure, however, that if the Prime Minister desires to make any changes the leaders of the industry would be very willing to meet hH«> in conference and assist him to take action as would be in the best Interests of everyone:”