Opposition attacks cost of farm price support

Press, 22 October 1981, Page 1

Opposition attacks cost of farm price support

PA Wellington The Opposition yesterday attacked the Government farm price support programme, accusing it of hiding the spiralling costs of the scheme from the country.

In an all-out attack on the levels at which supplementary minimum prices had been set, the Opposition said it would cost the country a clear $2OO million more than the Government had estimated.

The charges were rejected by the Government, the Prime Minister (Mr Muldoon) saying that the full cost of the programme would not be known until the end of the season.

Debating the Supplementary Estimates — the last main set-piece debate in the House before Parliament adjourns on Friday for the General Election and the summer recess — the Leader of the Opposition (Mr Rowling) called the S.M.P. scheme “the National Party’s rural seat retention programme.” The scheme was very good in principle but was being destroyed by the political machinations of the Government. The minimum prices had been set at a level which took into account National’s complete failure to hold farm costs. -

In .two years to March, 1981, farm costs had risen by 51 per cent, much higher than inflation, Mr Rowling said. '

“What we have got with the supplementary minimum price proposals is a Government trying to head off the anger of the farmers by pitching S.M.P. levels not at the market realisations or any relationship to the market realisations but at the escalating costs that are actually occurring on the farm,” Mr Rowling said. The Supplementary Estimates allowed for only $1,4 million in S.M.P.s- but in fact the best current estimates were that an extra $2OO million would need to be found to pay for the scheme. The Government was refusing to admit publicly just how much it expected the

scheme was going to cost by the end of the season and where the money was. going to come from, he said. Mr Muldoon said Labour was in no position to seek such details when it was “shovelling out election bribes day by day” without saying how they would be paid for. The level of payments had been calculated on the level necessary to maintain the business of farms in good conditions.

“That was the first approach, obviously,” Mr Muldoon said. “But it is not the only one.” “We also looked at what could reasonably be expected as the level of market prices particularly towards the end of the season, and those were not too far apart,” he said. “On that basis the S.M.P.s were fixed to give confidence, not to the big established farmer particularly but to the small farmer.”

They were fixed at a level that would maintain business confidence and encourage increases in production. “We must have production,” Mr Muldoon said. The Labour’s Party’s figure of S2OOM was “plucked out of the air,” he said.

The amount of the S.M.P.s paid out by the Government would obviously not be known until the end of the season.

The Under-Secretary of Agriculture (Mr Talbot) said the future of farm development was “exciting.” The Labour Party did not deserve to be the Opposition if it attacked the S.M.P. scheme.

It was necessary to give the farming sector confidence and the S.M.P.S did that, Mr Talbot said. Since 1975 the money generated by farming had. gone up from $1.4 billion to $4.4' billion.

Mr T. K. Burke (Labour, West Coast) said there had

been a nil per cent growth in New Zealand over the last five years. He said he was not opposed to the S.M.P. scheme but the levels set this year were too high.

“The real cause of farmers’ troubles is the high increased costs. The Government is carefully disguising the final figure : of the S.M.P.s.”

Mr Burke asked why the Government did not make an estimate of the scheme.

“After all, these are the Estimates, not the final figure,” he said.

The Minister of Agriculture (Mr Maclntyre) said S.M.P.S were brought in to give farmers confidence to produce, thereby earning overseas funds from primary production. The Minister of Labour (Mr Bolger) said the Labour Party was against the level of income of farmers this year, supported by S.M.P.S. Farmers needed the scheme to meet costs, he said. Mr A. J. Faulkner (Labour, Roskill) said the return at the farm gate was not enough to meet farmers’ essential needs. He was not opposed to S.M.P.S. But they would add to the inflation rate and until inflation and interest rates were brought down “we are not going to get anywhere.” S.M.P.s would work only when inflation was stabilised, he said.

Mr R. O. Douglas (Labour, Manurewa) quoted Mr Muldoon as saying 10 years ago that no government could justify the use of public money to help farmers who were not in difficulty.

Faced with an election defeat “any bribe is not enough,” Mr Douglas said. He called the S.M.P. scheme a “neutral seat retention scheme.”