GUARANTEED PRICE

Evening Post, Volume CXXIV, Issue 54, 1 September 1937, Page 9

GUARANTEED PRICE

(EFFECT ON INDUSTRY

"DECLINE IN PRODUCTION"

(By Telegraph—Press Association.)

DUNEDIN, August 31. A rapid decline in production in the dairy industry if the guaranteed price is not fixed at a sum that bears •a closer relation to mounting costs, is predicted by the secretary of the South Island Dairy Association, Ltd., a£r. "'. G. Wight. General dissatisfaction with the prices which had been fixed was being expressed by dairy farmers, said Mr. Wight in an- interview. They had hoped that prices would have shown that the Government was making an earnest endeavour to carry out the object of its guaranteed price scheme which, according to the Primary Products Marketing Act, was "to ensure for producers "adequate remuneration for services rendered by them to the community."* There was no evidence that due regard had been given to the following considerations enumerated in the Act: The necessity in the public interest of maintaining the stability and efficiency of the dairy industry; the costs involved in the efficient production of dairy produce; the general standard >of living in the industry in comparison with the general standard of living throughout New Zealand.

' The Minister of Marketing had antaounced, Mr. Wight added, that the prices fixed for the current season were estimated to return to suppliers of butter factories 0.84 d per lb of butterfat and to suppliers of cheese factories 1.34 d per lb of butterfat more ■than they had received for last season. It had been estimated by a special committee set up by the New Zealand Farmers' Union to investigate the position that for the period from October 1, 1936, to June'l, 1937, dairy farmers' costs had increased by 3.385 d pfr lb of butterfat compared with the previous year. This figure could be taken as substantially correct to indicate the position at the beginning of dime, but costs were continuing to advance rapidly and it was probable that tjefore ,the present season had expired the increase would have moved up to 6d per lb of butterfat or even higher if the demands contained in an application for a Dominion award made by the New Zealand Dairy Factories' Employees' Industrial Union were granted. They would raise wages costs of the average-sized cheese factory by a further 2d per lb of butterfat at least. "FAILED LAMENTABLY." ; "In view of the above," Mr. Wight stated, "it will be realised that the Government has failed lamentably to implement its promises to improve the dairy fanners' economic position, and it is apparent to me that producers are not willing to accept the situation that exists any longer. They have got tired'of living in a perpetual state of penury while they see other sections of the community enjoying a higher standard of living", than' ever before. Many of them have already decided to''throw' up the sponge' and find some5 other vocation that offers them more . adequate recompense for their labour! and if the present position is allowed to continue dairy production in this country will undoubtedly show a rapid decline,in the near future. Several small cheese companies in the South Island have already been compelled - to; -cease operations because ofUncfe^sed cqsts^of production. ■-■ *■■?- '' v ■-.!■:<■■ ■/' .. .'"The Minister-of Marketing"in his broadcast address on Monday evening made reference to the demand which had been made on the Government for a guaranteed :price which would give the'dairy farmer not less than Is 6d per lb butterfat and mentioned that he had replied to the effect that 'the Government/did not respond to demands other than the demands of reason.' It would be a difficult matter to convince the average dairy farmer that the Government was not responsive to the ■ unreasonable demands •which he considers have been granted to other sections of the community. The Minister stated further that 'there would not be any dairy industry at all.in-three years' time if such people had their way.' He was referring to .people who demanded Is 6d. "If production costs are not brought Hown to a level more in relation to the value of the product than they are today," Mr. Wight concluded, "it ■will astonish me if the industry does not dwindle away in less than three years."