SUBSIDIES FOR AGRICULTURE

Press, Volume LXXVI, Issue 23080, 24 July 1940, Page 8

SUBSIDIES FOR AGRICULTURE

“ SOMETHING MUST BE

OUT OF BALANCE”

MR HAMILTON ON PRICES

AND COSTS

[From Our Parliamentary Reporter.!

WELLINGTON, July 23,

The opinion that the internal economy of the Dominion was unbalanced when it was necessary to provide in the Estimates for assistance to primary industry of more than £1,000,000, was expressed by the Leader of the Opposition (the Hon. A, Hamilton) during consideration of the Estimates in the House of Representatives to-day. Mr Hamilton said the whole position. was getting on to an artificial basis, and he feared that when the war was over this would either result in export industries being ruined, or the exchange rate being forced still higher. “It is disturbing that an amount as high as this is required to keep agriculture operating in the Dominion, Mr Hamilton said. “The Estimates provide £131,500 for the carriage of lime for farmers, £61,000 for part freight on farm produce, £222,500 for part freight rates on fertilisers, and a new one of £630,603 as a subsidy on raw materials for the superphosphate industry. In addition, there is £223,905 for the development of the wheat industry, which is actually a grant to keep down the price of bread. “Does it not appear?’’ Mr Hamilton asked, “that something must be out of balance when, with fairly good prices for our primary products overseas, the industry has to be subsidised to this extent. It does not give a great deal of confidence to farmers to bring in new land and grow more crops. One is bound to conclude that the internal price level is too high, and that costs to farmers should be reduced.” Subsidies were 1 eing paid to primary industries in many different ways, Mr Hamilton said, and it seemed to him that if after the war the farmers were not ruined, the exchange rate would break away to an even higher rate. Either of those alternatives was very undesirable, and in his opinion the only way to prevent their happening was to keep the internal economy down. The Acting-Minister for Agriculture (the Hon. F. Langstone); What is a natural level? Mr Hamilton: What the British working man can pay for our produce. “Something has gone wrong, anyway,” Mr Hamilton concluded, "when we have to subsidise our basic industry to this extent.” An explanation of the £630,000 subsidy for the superphosphate industry was later given by Mr Langstone, who said there had been an increase in the price of phosphate imported' to New Zealand, and the subsidy was being paid to fertiliser manufacturers to keep down the price to the farmer. “The Government felt that it was better for the whole of the people to carry the burden than that it should be borne by only one section—the farmers,” Mr Langstone said. “The sum may seem a large one; but in recent years there has been a great increase in the amount of superphosphate used, and the total cost of phosphate brought into the country has correspondingly risen.” _