DAIRY INDUSTRY

Gisborne Herald, Volume LXXIV, Issue 22314, 26 April 1947, Page 8

DAIRY INDUSTRY

I NEW PARTNERSHIP | STATE AND FARMERS I LOWER COSTS ESSENTIAL I ‘‘Until Parliament meets and the | necessary legislation is passed to estabj lisii the proposed Dairy Commission ! and invest it with the powers agreed | upon between the Government and the = dairy industry there can be no real ! appreciation or the benefits of the new I plan. It will take time to evaluate i the success of this new partnership bcj tween the State arc! the producers,” \ slates the executive of the Federated ! Farmers of New Zealand, in a review I of iht. 1 ; circumstances in 'whicn the comI mission will take up its duties, f ‘‘Meanwhile dairy farmers have the * satisfaction of knowing that their scas- . onal prices will no longer be fixed by the arbitrary decisions of the Government and that, as producers, they have secured some increased control over the destiny of their industry. They will, however, watch carefully to see how much the policy of the commission will be directed by the Minister of Marketing. “They will certainly not welcome any ; such policy control as is exerted over! the directors of the Reserve Bank and they will be solidly behind the pro- j ducer-mcmbers of the commission to ensure that the new body retains individuality of action and does not succumb to the powers of the State, a con-1 tingency possible under the terms of I the present agreement which stipulates! that ‘the commission shall comply j with the general trade policy of the Government and with any general or special direction issued by the Minister in terms of Government policy’. Readjustment of Prices “Recent outcries by dairy farmers to have the prices of their products fixed in relation to the labour rewards of other sections of industry have now been countered by the Government’s action in setting up the commission. Letters which have passed between the Prime Minister and the chairman of the Dairy Board specifically provide that the commission will be given legislative authority to consider readjustment of the present season's prices after taking into full consideration the effect of the extension of the Government’s 40-hour week policy. But the commission is also specifically directed, under the terms of the agreement, to 'have regard to the general economic stability of New Zealand’. “This, of course, restricts the commission in its actions. Inflation is the present economic characteristic of New Zealand and inflation can hardly be considered a form of economic stability. Increased farm prices would accentuate that present inflation just as will further wave and cost increases in other sections of industry. If the commission is to have due regard to our economic stability it should aim at a reduction in costs; deflation rather than further inflation. That has always been the real desire of farmers. "At the Dairy Industry Conference in June last year this point was made by Mr. A. J. Sinclair while debating I with Mr. F. P. Walsh. Mr. Sinclair • said: ‘Our real need is lower costs. I We dairy farmers, if given a choice of low costs or high prices always ask j for low costs. An inherent weakness of j the guaranteed price plan is the lack | of control over costs. The Government . can fix prices, but it has shown its in- j ability to control costs.’ i Eig Problem For Commission j "An increased dairy price, under j 1 present conditions, is necessary if farming is to keep pace with industry in the I i matter of rewards. But under those ■ ( conditions, under present circum- 1 1 stances, the commission may have some j f hesitation in raising the price, just]' though the former's claims are. The ! 1 commission, therefore, faces an enor- i mous problem at the very outset of its career. ( “jn essence, the Dairy Commission is to be the Arbitration Court of the dairy ; industry. If, then, the Government ’ stipulates that its decisions regarding ( price shall be made with regard to the economic stability of New Zealand,’ the Arbitration Court should be directed . similarly. The farmers of New Zealand should not alone be asked to provide economic ballast for the present unbalanced ship of State. “These are but some of the points concerning the Dairy Commission set-up f which Federated Farmers will have t : closely to examine in the near future. The machinery planned has potentiali- t ties. Its successful operation, however, <j depends more on governmental econo- t mic policy than on mere amendments t: to the Primary Products Marketing [\ Act." /