Dairy Produce Prices

Press, Volume LXXVI, Issue 23130, 20 September 1940, Page 8

Dairy Produce Prices

Addressing the annual meeting of shareholders, the chairman of directors of the Tai Tapu Cooperative Dairy Company, Ltd., Mr W. G. Macartney, drew attention to the effect of rising costs in the dairy industry and the need for a review, accordingly, of the prices to be paid. In Mr Macartney’s opinion the Government can hardly fail to recognise this need and to realise that “if other sections of the community are “ to receive added rewards to offset increased “prices the primary producer should receive “ equal consideration.” This argument is plain enough. The present prices were fixed in 1938, and were then fixed at a figure less than a special committee, appointed by the Government, had recommended. Since then, two years’ movement of commodity prices has gone against the producer, although checked to some extent by special action. The Abstract of' Statistics shows that the all-groups index of wholesale prices has moved from 1036 in 1938 to 1182 in June, 1940, and the index for imported commodities from 1072 to 1249. Meanwhile, although the dairy produce export index has moved from 1210 to 1335, this has helped to fortify Dairy Account finance but has hot helped the farmer. . Second, within the last month or so the Court of Arbitration has ordered a 5 per cent, increase in award wage rates and the Government has granted an equivalent cost of living allowance to the majority of public servants. The ground is that these sections of the community find it harder to live and pay their way in present conditions. Dairy farmers see no reason why the. argument should not serve them as it serves others. Mr Macartney very justly pointed to the danger of putting more and more money into circulation when the quantity of goods available for consumption is lower. “The position will pertainly be ag- “ gravated,” he said, “ if the dairy farmers of “the Dominion have more money to spend”; but that does not weaken the dairy farmer’s case for “ equality of treatment,” in accordance with the facts as they are and with policy as

it is. It does, however, throw a very clear light on the dangerous weakness of the Government’s position, which is of its own making. Dairy farmers continue to think of their industry separately from the other primary industries and to turn to the guaranteed price formula and machinery when distressed. This is the Minister’s fault. Last November he declared that the guaranteed price formula still applied, and he had insisted, a little earlier, that the dairy producer was “in a different “ position from that of other classes of pro- “ ducers, who are required to accept the prices “paid by the British Government.” But in fact the amended Marketing Act lays it down that the provisions for the fixing and payment of the guaranteed price shall be read subject to a new provision, under which all commodity prices paid by the Marketing Department shall be fixed with “ due regard ” to the existence of a state of emergency or of war “ and to the “ conditions created thereby.” In other words, the amended act carefully rules out the theory that the dairy industry retains the specially defined and protected status originally given to it. Further, the act nowhere makes or implies any distinction between dairy producers and “ other producers all alike are to be paid such prices as the Government may determine, without stated relation to prices received from the British Government. This does not mean that there is no such thing as the “ guaranteed “price”; it does mean, however, that the guaranteed price system no longer gives dairy farmers better grounds for an appeal to the Government than other branches of the farming industry have. They will be wise to face that fact. The dairy farmer is entitled to no protection against rising costs and dwindling scope for production that the producer of meat or wool docs not equally share. But although the Minister for Marketing may well see a good opportunity to cut through confusions to a plain statement of the position, he will use it badly if he uses it merely to tell the dairy industry that it cannot have differential treatment. The real demand upon him is for a policy within which producers as a whole will be secured against the disabling effects of an inflationary price movement.