Floor Price 'A Failure’

Press, Volume CVIII, Issue 31786, 17 September 1968, Page 10

Floor Price 'A Failure’

"The Press'* Special Service BLENHEIM, September 16. The present floor price system for wool was a “proven failure,” said the president of the Federation, of New Zealand Wool Merchants, Mr H. J. Dewe, today. Furthermore, he said, the 16 per cent floor price placed New Zealand in a position of grave selling weakness. Mr Dewe was speaking to the annual conference of the federation in Blenheim.

“The selling position is still further undermined by deficiency payments. Supplementary payments, deficiency payments, subsidy payments, whatever they may be called, are seldom in the best long-term interest of an industry, but in this case the whole idea is thoroughly wrong in principle. “In essence our growers are responsible for saying yes, or nay, to a wool price. “Where in this system is there provision for any resistance to the sale of wool at a cheap price? There is absolutely none. Can you imagine anything more weak? “All will agree that seller resistance is an essential ingredient in the successful disposal of any commodity. We have, in effect, eliminated the last vestige of this vital ingredient “Surely our growers realise that funds paid out in subsidies are gone forever. If the industry is to preserve some degree of independence, if it is to be master of its own ship, preservation of its present capital resources is a matter of dire necessity.

“If the Government in its wisdom wishes to cushion the shock of low wool prices, that is its affair: but for the industry to dissipate capital resources in this foolish way is a dangerous expedient which will eventually place it in hock to the Government,” said Mr Dewe.