THE PRICE NOW AND IN FUTURE

Evening Post, Volume CXXII, Issue 31, 5 August 1936, Page 10

THE PRICE NOW AND IN FUTURE

The guaranteed price for dairy produce will disappoint farmers who had been expecting something better than the present London prices would support. For cheese they have a guarantee a_ little better and for butter something worse. But it must not be forgotten that, for this season, the Government did not promise to take the existing London price into account., The price Avas to be on the average of the past eight or ten years. Mr. Nash claims that this promise is fulfilled and "in addition an allowance has been made for increased costs in the industry." The Minister adds: . '

In ascertaining the average prices the most complete statistical information from the industry and Government Departments was made'available to the Dairy Advisory Committee.

As the formula "the average of the past eight or ten years" is so vague, the Government will no doubt disclose its statistical information and show how the formula has been applied and the calculations made. This is only fair to the, industry and it is essential, if the farmers are notNfor ever to complain that they have been given less than their tyie. Regarded from the public viewpoint, (the public who would have to pay a deficit) it seems that the Government has chosen to keep to its formula and work for safety. If the season* goes on as it has begun there should be a surplus in the fund to meet any deficits in future years. The farmer reaction to this possibility will reveal whether the industry really wants a stabilised price and is willing to pay for it or whether it just wants subsidies. We have previously contended that , subsidies would be wholly unfair to the public and a dangerous innovation. Will the dairy industry now agitate to compel the Government to give not stability but a subsidy? The Govern-

ment, in its proposals for fixing the price for future seasons, is directly inviting subsidy pressure. It has a vague and all-embracing formula including costs of production, standards of living, and stability in the industry (all of which may cover any range of prices) and it has appointed a committee of seven persons, of whom five are directly interested in the industry, to confer j-with the Executive Commission of Agriculture. This looks much like preparation for haggling. If the Government formula for future price calculation is sufficiently definite, why could it not direct its officers to make the necessary calculations? We foresee the possibility of the pressure of the industry (through this committee) forcing the Government to pay a much higher price next season, and ultimately stability will be realisable only by publiclycontributed subsidies. Meanwhile mortgages will have been, adjusted on the basis of the low guaranteed price for this season, and the mortgagee will have no hope of revision to the^basis of a higher guaranteed price. The Minister of Finance is genuinely anxious, we believe, to have stability on a basis fair to the industry and to the public; but his plan opens the door to political bargaining and land speculation. The price for this season is evidence that he seeks a true stabilising scheme; but we. doubt very much whether all his weight will be enough to keep the door to bargaining and speculation shut when political parties and organised industries are pushing on the other side. - . ■