"ON TRIAL"

Evening Post, Volume CXXVII, Issue 107, 9 May 1939, Page 8

"ON TRIAL"

STATE MARKETING

TESTING TIME AHEAD

(By Air Mai!, from "The Post's" London Representative.)

LONDON, April 20.

Under the heading, "State Marketing on Trial," "The Times" commented today on the appeal by Mr. W. Nash, Minister of Finance, asking that Dominion dairy farmers should not press for an increase in the guaranteed prices for butter and other dairy produce.

"Mr. Nash's appeal," said "The Times," "is a warning of the difficulty of maintaining an even balance in a controlled economy in face of the political pressure of sectional interests. In New Zealand the two most powerful elements are the farmers and the trade unions, each demanding a larger slice of the national cake and each justifying the demand by the increase in costs of living or of production resulting from concessions made to the other.

"This difficulty is not necessarily insuperable; but, if it is not to upset the whole structure, both elements must recognise that the general national interest must outweigh that of any section, and the Government must be strong enough and impartial enough to hold the balance even."

Referring to the Primary Products Marketing Act and the creation of the Primary Products Marketing Department, "The Times" continues:—

"It was hoped that the scheme would enable large economies to be made and would mitigate price fluctuations. It is too early to say yet whether it will be a success or not. The testing time will come when there is a serious fall in world prices. So far the results are not discouraging. Substantial economies have been effected in the cost of marketing. In the first year the Department's transactions showed a loss, though much smaller than had been estimated.

"Last season the guaranteed price was raised, but rising market prices enabled the Department to show a profit even after a large bonus had been paid to the farmer. This year •the Department has budgeted for a deficit, which on present showing is likely to be substantial, more than wiping out the profit of last year.

"One danger is that the farmer, whose political influence is very great, will insist on getting his full return in good years, so that there will be no reserve left in the hands of the Department to meet the losses of the bad years, which are bound to come. Another is that rising wages and a rising standard of living may force up costs of production and compel the farmer to insist upon a corresponding rise in his guaranteed price, creating a widening gap between what the Department must pay and what it receives from its sales.

"Mr. Nash's address shows that Ministers are alive to both dangers. The manner in which they are met will be a test of the capacity for self-discipline, which is an essential condition for the success of a planned and controlled economy in a democratic country."