BETTER OUT OF IT

Evening Post, Volume CXXIV, Issue 108, 3 November 1937, Page 8

BETTER OUT OF IT

Many dairy farmers will agree with the complaints made by Mr. Coates in the House of Representatives last night regarding tho disparity between the Government's guaranteed price for butter and the present London quotation. When the London price is 190s (New Zealand currency) a cwt and the guaranteed price is 123s Bd, they will ask who is getting the difference and will not be satisfied if they are told that they have had it —when the London price- was 87s sterling. Apparently the Prime Minister realises that it! will be difficult to convince the farmer that a stabilised price may sometimes involve receipt of less than the produce is sold for, and in an interview he has suggested the possibility of reviewing the matter. Mr. Savage states that calculations must be based on a whole season and not just on a period when high prices are ruling, but he adds: "There is no need to regard the guaranteed price as fixed and unalterable, though the farmer can rest assured he will get that price no matter how far the market may fall." ! This merely serves to demonstrate j how unwise it is that the Government should be mixed up in this matter. A [Government is subject to pressure land pressure from a well-organised {section of the community can be 'very strong. It can be exerted to secure a one-sided bargain—the benefit of a high market for the farmer and the liability of a low market for the paying public. Already it appears to have done that up to a point, for the Minister of Marketing stated last night that last year, "when the price was arbitrarily fixed on a 10 years' average," was an exception to the application of the general rule regarding the handling of the Dairy Industry Account Mr. Nash did not explain this exception further, but we assume that it is intended that last season's loss (estimated at £650,000) will not be offset by any surplus that may accrue in the future. A more complete explanation should be .given. Is this loss to stand alone—the Government's gift (af the expense of the community) to the, dairy industry? If so, then what guarantee can there be that a similar one-sided rule will not operate in future? A one-sided bargain, as we have pointed out from the outset, is not genuine stabilisation. It is stabilising, plus subsidising at the expense of the unsubsidised people of New Zealand. The only sure way to avoid the political pressure which involves the possibility of this inequitable system is to leave the Government out of the plan. Let the industry itself assume complete responsibility, taking its own surpluses, meeting its own deficits, and working out its own stable price. The Government can grant the industry power to manage iU own affairs (as has been done already in the legislation establishing producers' boards) but if it gives also the right to claim its losses from the Government it is inviting trouble. The Dairy Industry Commission pointed out long ago the difficulty of maintaining a stabilising fund and its opinion is confirmed by events.