The Dairy Farmers and Guaranteed Prices

Press, Volume LXXV, Issue 22768, 21 July 1939, Page 10

The Dairy Farmers and Guaranteed Prices

When the Prime Minister made his short statement in the House on the guaranteed price question and his rather fuller statement to the press, it is extremely regrettable that the president of the New Zealand Farmers’ Union, Mr W. W. Mulholland, did not read them more carefully and think more carefully before commenting. The result of his haste is that, having jumped to an unwarrantable conclusion and been sharply enough corrected, he, has now involved in clouds of controversy an issue difficult enough to simplify in a clear and steady light. The Prime Minister’s statement wats plain: that if, as had been asserted and as appeared possible, the dairy farmers did not want the guaranteed price scheme and thought they could do better “under the old system of “rising and falling prices,” then the* Government would consider how to meet them in the matter. In his press statement he added that it would be necessary, of course, to make sure what the attitude of the farmers really was. The phrase quoted above, “the old system of “ rising and falling prices,” with another reference to “the uncertainties of the old system” in contrast with “the regulated income and “the admittedly improved marketing methods” of the present system, made sufficiently clear the alternatives presented by Mr Savage. It must be said at once that to put them like that is a little like telling a man grumbling over his dinner that if he does not like his steak burned to a cinder, then he can have it raw. But certainly Mr Savage said nothing whatever to justify Mr Mulholland’s immediate inference that Mr Savage’s intention was to transfer to the industry, with the management of its own affairs, “ all the present facilities for organised “ marketing, including facilities for operating “a long-term stabilisation plan,” and, “of “course . . . facilities for finance either through “the Reserve>Bank or through the trading “banks.” The Prime-Minister did not say so, and could not have said so; and Mr Mulholland is unwise to reply now, when his mistake has been corrected, that he merely “ assumed that “the Prime Minister meant what he said.” Undoubtedly, if the industry were to resume control of its own marketing, it would do so on a basis constructed closely to the model provided by the Government; but the Government could not “ hand over ” its Marketing Department. Possibly, the industry would itself attempt to develop a “long-term stabilisation “plan,” or a price-equalising scheme; but the Government could not “ hand over ” Reserve Bank or trading bank facilities. In what form and by what means the State might be able to give the industry some assistance remains to be considered; but, as it seems to be necessary to repeat from week to week, an industry cannot direct State facilities. Least of all can it direct the provision of financial aid, especially aid by subsidy. This is one of the crucial points. The guaranteed price scheme is at present operating as a subsidisation scheme. Mr Savage puts the total subsidy figure for the current season at £2,000,000. Mr Mulholland s answer to this is in two parts. He says" that the greater part of this sum will merely be a debit in the daily account, charged “ against «• the realisations of future years.” Even, if that were certain, and it Is far from certain, farmers would still count the cash and let the debit go. Second, Mr Mulholland argues that thi conversion of sterling receipts into New currency at the Present rate of exchange has 1 “ deprived, the dairy industry ac-

“ count, and consequently the farmers, of more “than £2,000,000 this year”: a calculation which there is no need to check till it is properly set out and its relevance established. Neither of these assertions disposes of the fact that, in prevailing conditions, the guaranteed price scheme is subsidising dairy farmers. While it continues to do so, or promises to do so, they are not at all likely, as a body, to march out from under its shelter, such as it is, into the freedom that Mr Savage opens to them, among the “rising and falling prices.” But that does not mean either that the shelter satisfies them, or that it ought to satisfy them. It is very far from meaning that the scheme is a success, fulfilling the spoken pledges of the Government or the written provisions of the Primary Products Marketing Act. The Government offered the farmers a roof and has given them a leaky umbrella. It is easy for the Government, of course, hearing their complaints and protests, to say that they can give up the umbrella, if they are not pleased with it; but that affords neither an answer nor relief If the Government is in earnest, it will make an early opportunity for the industry to explain its distresses, demonstrate the deficiencies of the scheme, and propose improvements —or an alternative to it. In the meantime, the Farmers’ Union and the Government can best prepare the way to discussion by dropping the controversy.