The Dominion. MONDAY, MAY 4, 1936. GUARANTEED PRICES AND OUTPUT

Dominion, Volume 29, Issue 185, 4 May 1936, Page 8

The Dominion. MONDAY, MAY 4, 1936. GUARANTEED PRICES AND OUTPUT

In his talk with the Dairy Conference last week, the Minister of Finance spoke most optimistically of the prospects of our finding a lar?elv increased dairy market in the United Kingdom, and was therefore not greatly perturbed by the suggestion that P^ ent £ guaranteed prices would almost inevitably have to he followed restriction of production. Mr. Nash agreed that it would be foohsh to produce goods for which there was no market, but said he hope that when the Government’s representatives went Home next year it would be found possible to obtain a market for a quantity e greater than could be produced from the sod of this X ‘ of us share that hope, but it is one which does justice to °»r hear - rather than to our heads. This business of marketing, as the Uovert m M will very soon find, is governed by facts, not by fancies And rte central fact in respect of dairy produce is that we cannot hope for any substantial expansion of our British market unless we aie prepared to accept low prices for the whole of our output- .. , Mr. Nash probably is thinking of the physica needs of the British people, and of our capacity to supply them. In that sense our marie Lor. rather, the combined market of all the supplying C .? U rr’ will not be exhausted until every man. woman and child in the Un ted Kingdom is supplied with milk and milk products to the full extei necessary for the maintenance of perfect health. Not only r ’ but also' every other political party, looks forward to the dav when these needs will have been met. But in the meantime the New Zea.an.l Government will have to sell its butter and cheese season by season, and in the face of competition that is becoming keener every v • this morning’s cable news records the appearance in Tooley btreet of experimental consignments from Japan, to be followed next yea by “big shipments . . . under the supervision of Danish experts, who have planned increased output. The keener the competition and the greater the supply, the better for the British consumer because prices will tend to fall. But the further prices fall the greater the gap to be bridged in New Zealand between the price the Government pays the farmer and the return it is able to obtain from the sale of the farmer’s produce. . . , , , ■ „c Anvthing done to help the dairy-farmer reduce his costs ot production—or increase his output without increasing his costs proportionately, which is the same thing—will help also to extend his markets. This was the line of action followed by the late Government in its debt conversions and mortgage adjustment legis_at-on. The present Government’s programme will increase costs ot production ; but in compensation the farmer is to be given guaranteed prices. If the compensation exceeds the extra cost—and the Government says it will—then certainly the effect will be an increase in production and in exports, with a consequent downward tendency in London prices. The Labour Party at Home will we.come this for it will reduce the cost of living. The Labour Party in New Zealand undertakes to protect the farmer against it. And the New Zealand public generally (including the farmer, of course) will pay. Lp to a point it may be worth while to pay. The balanced economy of which Ministers talk is a condition to be desired. But balance wiJ not be brought permanently nearer by subsidising an industry that is already producing more than its markets can absorb at profitable prices. ■