Subsidised Overseas Farm Threat To N.Z.

Press, Volume XCV, Issue 28284, 23 May 1957, Page 12

Subsidised Overseas Farm Threat To N.Z.

The menace to New Zealand’s farming industry of heavy subsidising of farming in the industrial countries of the world was emphasised by Sir Bruce Levy, former director of the Grasslands Division, when he gave the opening address at the seventh farmers’ conference at Canterbury Agricultural College, Lincoln, yesterday.

“I would place the subsidising of farm products overseas as one of the greatest perils of the future, more particularly in regard to butter, cheese, pigs, poultry and prime beef,” said Sir Bruce Levy. “If the world sets aside the economics of food production in countries adversely affected by climate by guaranteeing a costsplus reward, then surpluses in food production are bound to arise and accompanying these surpluses a reduced price value in the open markets of the world. “The United States and Britain have both shown increases in food production as a direct result of subsidising and any country having a major industry, other than farming, could likewise subsidise food production. It may be a presumption to accuse mechanical industry of the main industrial countries of the world of deliberately setting out, through Governments, to create surpluses of food in order to reduce costs to industry at the expense of those countries whose one and only export industry is farm products. “Could Be Self-Supporting” “Britain, since World War I, has increased her own food production from 40 per cent, of her requirements to 60 per cent, and she could, by adopting an ad lib importation of concentrate feeding stuffS, *>e entirely self-sup-porting in food—in milk, butter, cheese, pigs, poultry and beef. “It would not, of course, be good business for the subsidising to be carried to such a point where large surpluses do actually arise, but it could easily be carried to a poin' where unrestricted imports would soon cause a surplus with consequent lowering in price. There are already

indications of that taking place in the London market for dairy products today. “New Zealand could not subsidise food production on the same basis as in the United States and Britain for New Zealand has no worthwhile secondary industries to do so Hence we must accept the price that industrial countries see fit to give us. “It is the same old story—food production must be subservient to mechanical industry if costs to the industry are to be kept down. It is again the old story of the peasant slaving his guts out to supply the mechanical industries and professions of the world with cheap food. Improvement “The two world wars, when stark famine faced industry, improved matters, considerably, but I feel the fight is again on and it behoves food producing countries of the world to tackle this menace of cost-plus subsidising of food by the densely populated manufacturing and professional countries of the world, our markets for all time,” said Sir Bruce Levy. In view of developments in Britain and the expansion of subsidy levels it was problematical whether Nev Zealand should tie herself to one market, said Sir Bruce Levy. By all means there should be reciprocal trading but New Zealand should be able to stand on her own feet and in future her policy should be to meet all competition by out-pric-ing competitors. If she could not do that she did not deserve to survive as a nation. British Denial Mr E. G. Griffiths, agriculture and food adviser to the High Commissioner for the United Kingdom, said that he categorically denied that the British subsidy payments were on a costplus basis. They could rather be described as being on a “cost of production minus” basis, as in a year in which costs had increased by £3Bm subsidy payments had increased only '£ 14.5 m. Each year when they were reviewed the subsidy level was reduced a certain amount to encourage farmers to increase their efficiency. It was estimated that each year £3om more was earned as a result of increased efficiency. In the last five years while costs had increased by £loom subsidies had remained about the same—about the £2som level, he • said. The Food and Agriculture. Organisation had. as a result of an investigation, said that it was the best system of support possible.