GUARANTEED PRICE

Grey River Argus, 20 May 1938, Page 9

GUARANTEED PRICE

MAIN OBJECT ACHIEVED Dairy Coy. Secretary Expects More (Per Press Association.] AUCKLAND, May IS. .•Having achieved its main object, Te Awamutu Co-operative Dan> Com nanv Ltd in an adcliess on the guaranteed and compensated price scheme which he gave to the New . Zealand Society of Accountants Mr I Sinclair, who was a membe “rt P™ so up b, lhe Government last yeai, said termined effort would undoubtedly be made to present the scheme i more palatable form beioie the I farmers went to the ballot box in Nomain object of the scheme had been the stabilisation of the fames gross income. As a result of its ( , operations, he knew to a penny uhati additional revenue he would receive | if he increased his butterfat produc-j tion by 1000 Ib. This was a great ad- • ; vance on anything the farmer had

hitherto experienced, for at one time it had not been unusual by 2a or Ji per cent, in the space of a few weeks. However, said Mr Sinclair, stability of income without stability ol costs was embittering the dairy farmer. During the last two years there had been brought home to him the fact that gross income in business might mean nothing at al-- The only criterion of success in any business was the net profit for Ihe year, and in this respect the guaranteed price scheme was not coming up to expectations.. Lack of stability' of costs, however, was not the main fac tor which had disillusioned the dairy farmer, and which caused the guaran- i teed price scheme to stand condcns ed in his eyes to-day. I The main factor was the inability | of the scheme to give him a return which would enable him to pay’ his workers a wage which would attract labour to the farm. Dairy farms were being steadily denuded of the best class of labour. The problem was very' acute in every dairying district, and if something was not done it would wreck the scheme and those who were behind it. A man who earned £4 10s for a week of 40 hours on a Public Works Department job refused to work anything from 70 to 80 hours a week on a dairy farm for £3 2s 6d.

'‘From the very outset,” declared Mr Sinclair, “this difficulty was with the industry. It was strongly emphasised to the Government by some of us who were in a position to do so effectively at the proper time, and nothing has done more to prejudice the farmers' outlook on the guaranteed price scheme than the labour problem. He is purchasing farm machinery, tractors, and other mechanical aids, not because he is wealthy, but in a desperate effort to see him through, and the only solution which many farmers see to-day is to get out of dairying altogether.

“It has been expounded to dairy farmers throughout the whole of New Zealand,” said Mr Sinclair, of the compensated price scheme, “and it has been well received. It will be of great interest to observe whether the guaranteed price or compensated price secures the dairy farmers’ support at the next election.” Dairy companies are seriously perturbed at the heavy accumulation of produce in store awaiting shipment, according to Mr A. J. Sinclair For some years, he said, it had been established policy to spread shipments over the flush months; but either this policy was being carried out more drastically than usual, or shipping had been very erratic. "Many dairy companies of medium size,” he said, “are paying interest to-day of four and a-half per cent, on overdrafts of more than £20,000, to finance their monthly pay-outs, and heavy bills for storage must be met when the produce is ultimately shipped. There is a provision in the Act which enables the Government to take over the produce at any time, and as credit is obtained through the Reserve Bank at one and a-quarter per cent., the dairy companies contend that the Government should pay for the produce after, say, six weeks in store, since the Government gets the surpluses which accrue from this policy. If the surpluses were ultimately paid to the farmer, this grievance would be minimised; but it. is one of the minor ditliculties which the Government could easily adjust, thus making for. smoother running of the guaranteed price scheme."