WHAT IS GUARANTEED?

Evening Post, Volume CXXVIII, Issue 13, 15 July 1939, Page 8

WHAT IS GUARANTEED?

The Prime Minister's hint that the guaranteed price scheme may be ended can be variously interpreted; as on attempt to call what the Government may regard as farmers' bluff, as an effort to discipline complaining producers, or as evidence of dawning recognition that the scheme (with prospective deficits) will be an incubug to a financially* embarrassed Government. But if the Government thinks that it can escape the dilemma in which it has placed itself by simply withdrawing the guarantee it is over-estimating the simplicity of the primary producers with whom it has to deal. The objections of the farmers have never been to the guarantee part of the scheme, but, originally, to the commandeer which would permit the Government to take the produce at Its own price and, now, to the fact that this is actually happening. The Government, hypnotised by theorists, thought it could bring prosperity by artificially increasing purchasing power, though production did not rise proportionately. To those who douhted and pointed to the probable effect of higher costs on producers for export, the Government replied; "You will be safeguarded by the guaranteed price which will cover costs and assure you an equal living standard," There was just one thing the Government forgot—a fact succinctly stated by Mr. A. N. Grigg as the reason for the sheep farmers' rejection of a guaranteed price—"the country cannot guaran* tee itself more than the real value of its total produce." It is hinted that now the guarantee may be withdrawn; but the withdrawal began last year when the Minisler of Marketing whittled down the price unanimously recommended by an expert advisory committee. Cancellation of the scheme would go a stage further, but it would not give the farmer what he is really asking for and entitled to claim as his due. It would give the farmer freedom to deal with his pro. duce but with the scales weighted heavily against him. The Govern? ment guaranteed everybody's stand? ar4 of living. The farmers say, and rightly, for the expert committee supports them, that they have not received equal treatment. So the Government turns round and says: "Very well, we will guarantee you nothing. Now are you satisfied?" Of course they are n°t.- The proposition is npt a fair one. To be fair it should place the farmers in the position they would have occupied if the Government had not set out on its plan for raising living standards and posts, The Government proposes | nothing of that kind. Jhe Minister

of Finance made a request for stabilising prices .and eosls (when the farmers' prices were lagging behind) and lhat request appears to have had little force behind it, except in its application lo tliu fanners' prices, In brief, all Iho coslraising I'ucLors which lmvn made ihc guaranteed price scheme unfair are Lo be retained, and ihc fanners arc lo be loft to got out of their difficulties as best they can. The Government began by trying lo guarantee more than the real value of iho total production of the country. It cannot now evade its responsibility Jay further penalising the section which has never had the fujl value of the guarantee. To be fair it must face the real cause of the trouble—the costs which are absorbing an undue share of the production. That is where the guarantee should be revised.