The Franklin Times WEDNESDAY, SEPTEMBER 21, 1938 THE GUARANTEED PRICE

Franklin Times, Volume XXVII, Issue 111, 21 September 1938, Page 4

The Franklin Times

WEDNESDAY, SEPTEMBER 21, 1938 THE GUARANTEED PRICE

PUBLISHED EVERY MONDAY, WEDNESDAY AND FRIDAY AFTERNOON. Office and Works: ROULSTON STREET, PUKEKOHE. ’Phone No. 2. P-O. Box 14. “We nothing extenuate nor aught set down in malice.”

THE chief feature of the new guaranteed price, announced last week by the Minister of Marketing, the Hon. Walter Nash, is that it is below the figure recommended by Hie Advisory tribunal, as necessray to meet the increased costs of dairy production and to provide the dairy farmers with a standard of living commensurate with their skill, energy and experience. On the basis of the past, season’s realisations the new price will result, in an estimated nett deficit of £1)35,000 in the dairy account after allowing tor an estimated amount of £OOO,OOO being credit in the account for Hie season just closed. That is flic measure of the Government’s inability to meet tlie full increases in the costs of the.

farmer while keeping a cautious eye

on the London market. No more ' eloquent proof is needed of the lailuie of the guaranteed price principle, v which was to link costs and returns .on G a basis satisfactory to New Zealand’s & greatest exporting industry. ‘ It is not surprising therefore that the price is generally regarded as disappointing. The setting up of the , advisory committee, four of the seven j members of which were appointed by l the Government, was responsible foi 1 the most thorough and reasoned m- i quiry into costs yet held. Dealing • with the all-important question ol farm labour the committee was in agreement that the higher wages and shorter hburs being offered in other avenues of employment were seriously handicapping the dairy farmer. The committee said: “It is essential if the dairying industry is to he stabilised that it should be in a position to pay wages reasonably in line with those offered in other occupations, due allowance being made for the considerations that lead men to prefer farm work to other classes of work.” Calculating on this basis the committee reached a figure of 9.220 d for labour per average pay-out per pound of butter-fat. Mr Nash’s figure, how- • ev er, is only 5.782 d, this discrepancy being the chief reason for the Government’s price being .870 d less than the committee’s recommendation, j And as the advisory committee’s suggested average price is 2.75 d below the figure reached by the Dairy Board it cannot be claimed that the committee has unreasonably over-estimated the costs of dairy production or the level of labour expenditure necessary , to permit the dairy farmer to compete . with other avenues of employment. It r is on this vexed question of labour, in addition to increasing general costs, that the dairy farmer will feel once . again that the guaranteed price has ~ failed to provide all that was promised of it. ' He sees now,quite clearly that Mr Nash is torn between two irreconcilable factors, the increased and inn creasing cost of production in New Zealand and the London market levels. He sees that with conditions as they are the two cannot be aligned without inflation that would lack permanency e and would upset the Dominion’s eco-

nomic structure. The general taxpayer will remember that to provide the dairy farmer with a price that is below the cost of production, as announced by the advisory committee, the Government is ready to incur a deficit in the dairy account of nearly a million pounds. Here is the strongest possible condemnation of the guaranteed price principle and a clear warning that Hie stability of the Dominion’s greatest industry urgently requires a lowering of production costs from their present uneconomic level.