Stable Prices Aid To Planning

Press, Volume CVII, Issue 31530, 18 November 1967, Page 8

Stable Prices Aid To Planning

’T'HE wool marketing study group considers that greater stability of prices would create a more favourable climate for farm development. “But it must be stated that development will not proceed on account of stable incomes alone,” says the final report of the group. “The profitability of development must always remain the chief criterion for its adoption and since any stabilisation scheme cannot hold prices at a level permanently above market level, the profitability of development depends upon future market prices. However, under a stable price situation, the evaluation of the economics of any development programme in advance becomes possible. "It could be argued that the contribution of wool as

a component of sheep farm income could diminish in the future, and that therefore the importance of wool price stability will be reduced. On the other hand the group considers that under a stable price situation the profitability of wool relative to other farm products will be more easily recognised. Therefore production can be planned in a climate of certainty, and profitable adjustments made in an orderly manner.

“Should the profitability of all farm products be such that in the future little development can occur, then the problem becomes a national issue which cannot be resolved within the farming sector alone. But under such a situation, the planning of maintenance expenditure becomes as important as the planning of deevlopment In the opinion of the group, the need for stable prices, therefore, is no less vital.”