The Evening Star WEDNESDAY, APRIL 29, 1936. BREAKERS AHEAD.

Evening Star, Issue 22325, 29 April 1936, Page 8

The Evening Star WEDNESDAY, APRIL 29, 1936. BREAKERS AHEAD.

It needs no stretch of imagination to see the -'dangers in the Government’s guaranteed prices proposals. The risks are obvious, but Ministers are so convinced of the soundness of their scheme that they are prepared to take_ them. Labour enunciated its policy during the elections, and now in the House of Representatives it is pushing steadily towards its goaf. Tn his election manifesto the Prime Minister said it was clear that farmers and all others who play a useful part in the work of production can and should receive a guarantee of a standard of life commensurate with their collective power to produce. “In the long run they must rise or fall together. It is neither possible nor desirable to help one section of the people at the expense of the rest.” Yet, as wo shall see, this is what is

likely to happen. It is a gamble. If world prices are high the Government under the scheme should be in a favourable position, but if they sag the people as a whole will be called on to pay the piper. The machinery for the operation of the plan is outlined in the Primary Products Marketing Bill, which was introduced in the House of Representatives yesterday. It is intended to implement the promise of Ministers to pay an economic price to the dairy farmer. According to the provisions of the measure, the Government will take over at a fixed price the ownership of all dairy produce exported from August 1, and in the matter of primary products intended for consumption in New Zealand the Government is empowered at its discretion either to acquire the ownership of them at fixed prices or to control their

sale and distribution. Thus the cardinal points of the measure are provisions enabling Government ownership and price-fixing for the whole of the Dominion’s dairy production. To conduct the scheme a Minister of Marketing is to be appointed and a new Primary Products Marketing Department established.

These two proposals must necessarily involve considerable expense, but the problem will be so difficult and so complicated that their adoption will be necessary. Besides, the intention of Ministers is not to confine their operations to the dairying industry, bub to extend them to other primary products. A great scheme is in contemplation in which the Government will act as a friend and protector of the farmer, giving him an adequate return for his labour and expenditure of capital. It is a laudable desire, but amid the perplexities of our economic system and ever-changillg conditions it must Ire evident that the performance will be less than the promise. As had been suggested previously, no indication of the price to be paid to the producer is given. This will be fixed from time to time, according to circumstances, by Order in Council. As soon as the products become the property of the Crown the price will be paid forthwith, out of a dairy account to be established, to the company or other owners of the factory in which the produce was manufactured. The Prime Minister has said that the guaranteed price will be based on an average worked out over the last eight or ten years. Dairy farmers will await with great anxiety a definite announcement of what the amount will be. If it should exceed London parity at the moment they will be satisfied. On the other hand, if it proves to be less intense dissatisfaction will naturally be for whatever price will be fixed will be arbitrary. On the Government and the new Marketing Department will fall the onus of disposing of its acquired products overseas. At the moment conditions in the Motherland, which takes an overwhelming proportion of our products, are fairly good, but increasing production and competition from Australia, South Africa, and Argentina, as well as Britain itself, will not make the position easier. State control and price-fixing are dangerous expedients at any time, but everyone who has the welfare of this country at heart will wish the Government’s plan success. Nevertheless, estimating the factors for and against the scheme, in the light of experience and trading practice, it is impossible to feel sanguine as to the outcome.