The Dominion. FRIDAY, AUGUST 6, 1937. FARMERS AND THE GUARANTEED PRICE

Dominion, Volume 30, Issue 266, 6 August 1937, Page 10

The Dominion. FRIDAY, AUGUST 6, 1937. FARMERS AND THE GUARANTEED PRICE

Speaking at a meeting of the Makara-Hutt Valley Provincial executive of the New Zealand Farmers Union Mr. K Windley declared that a policy of guaranteed prices was not a solution ot the farmers’ difficulties, and the increased prices the farmers are now asking for the current season’s butter and cheese would merely aggravate these difficulties. “Supposing,” he said, the Government increased them—what then? What is going to happen? Is it not reasonable to expect that it would further increase costs. Here we have an honest and straightforward opinion by a farmer. After a year’s experience of the guaranteed prices policy, he has come to the conclusion that it is “vicious and unsound.’ A policy is judged by its effects. The farmers were given a guaranteed price based on the average of prices and. costs over the previous ten years. Inat price, it has been stated, would have been considered satisfactory i costs had remained stable. But costs have soared and left the farmers worse off -than they were before. They have been hit two ways, first by the general rise in the cost of living, and secondly by the direct increase in farm costs resulting from the Government’s legislation. They are now Asking for an increase. In the circumstances they are justified. 1 hey have been forced into the vicious circle of costs chasing prices. But increased prices would be followed by another rise in costs, and t rey would soon find themselves as badly off as they were, before. Mr. Windley, in fact, is afraid that the farmers are “getting up to the neck” in trouble. He is a farmer, and he ought to know. If the Government attempts to relate future guaranteed prices to costs there will be no end to the complications involved. It has embarked on an unsound policy—unsound for the farmers and tinsound for the country as a whole. By a fortunate circumstance it has escaped disaster in the first year of its experiment, but the favourable state of the overseas market, though it has been of advantage to the Government, has been of no benefit to the farmer. Had costs remained stable, with overseas prices at their present buoyant level, he would have been infinitely better off without the guaranteed price.