GUARANTEED PRICES.

Hutt News, Volume 9, Issue 9, 7 August 1935, Page 7

GUARANTEED PRICES.

Mi: W. NASH HKPLIES TO MB SINCLA I K 'H 'STATEMENT. Mr Walter Xasli, M.P., president of the New Zealand Labour Party, replying to the statement of Mr A. .I'. Sinclair re guaranteed prices, has written to ilie "Mutt News" as fellows:— "Recognising the importance of the primary industries of the Dominion and that their continuance was dependent on the farmer receiving in income" sulficienl to meet his costs, plus payment for his own labour, proposals have befcn forked out for a guaranteed price to be paid to the farmer for his produc(ion. "The proposals arc of supreme importance not only to farmers but to all the people of the Dominion. My personal opinion is that the adoption of the guaranteed price is essential to the future success of our primary industries. Acting on this opinion I approached Mr Morton, the chairman of the National Dairy Association, and suggested that he should give an opportunity Cor 'the proposals to be explained to the members of the Association. After consultation with his executive he stated that provision ! would be made for me to address the conference. "Adiii'g in I lie spirit, of the courtesy shown by Mr Morton. L attended the conference of delegates to the National Dairy Association at Palmerstoll North. 011 Thursday, June l'7th, and explained in detail ihe necessity for, and practicability of, a guaranteed price to the fanner. During Ihe address I did not use one word of criticism of the Government, After describing in simple language the conditions of the picsi nt world market L set out in detail why guarantees were necessary and how they could be achieved. "Al the commencement I slated the objective, which was: —"To so stabilise the minimum income of the fanner that he can nice', his working expenses and 1 11 joy a standard of living related to the time, enengv, skill and experience used by hint in producing the commodity necessary for t lie balanced progress of the Dominion'' and that "the stabilised income of the fanner can only be achieved by like treatment of till other sections of the community who render equal service to that rendered by the faniur." "I. pointed o ut the experiments that had been, and were being, followed to j L Destruction of Stocks: Oranges,) corn, pigs, cotfee, dairy cows, etc. | Restriction of I'roduction: Wheat, I

I'iilltiM, tobacco. rubber, tea, sugar, etc. ». I. showed how New Zealand butter prices on tlif London market. liml r;i njifd f ruin Ul.s.'i/li/- to li")/- per cut. diiriii't; I lie l'# s t six # 'I'ha! butter prices in Kurope ranged friiiii iHi/|i [iff cwt .in London to Ijiis, II in Switzerland. I. Thai prices uf primary products had mi relation to cost ot production. .1. Thai pi i\ ate mpolies were gradually extending their iany<*. not fur |he purpos. of covering producers' costs imr >atisf'y r<>nsinner 11 <• in;ill<ls, but to cn-ure tlio production of the quantity that wonl I give thr maximum prolit to the monopoly. " Referring to I lir potential market for butter, I pointed wit: J, That tin.' consumption ot' butter til New Zealand is I u enty-Jive per cent below the ipiantily stated by Dr. Walt, Director-General of Health, to lie neeessai'v 1 1 . ir full physical development and maintenance. 1 That New Zealand's present consuinption of liulter exceeded thai of Great Britain by .in per rent. U. Tliut the ulliniati' market in Britain alone for liulter was twice the prosent consumption. ■I. That marga ri ne. of which I.iKKI.IIOO lons wa.- nianufartmed yearly, was the major competitor in quantity and quality. then pointed nut Unit since 11128-f 1 the farmer had increased his production I>y LI |»'i' rent.. Imt his prices had declined l>y -ll per cut., with the result that in spite of increased product! in his income had declined by ,! per cent. "1 then said that the maintenance of production was dependent on the upkeep of the farm- and the payment to Ihe tanner and his assistants ut a sum sullicienl to maintain them at a standard of living measured by tlie marketable production resources ot' the country, and that this could be achi'ved and could only be permanently achieved, by orderly marketing and guaranteed price-. "Guaranteed price-. 1 said, would stabilise land values, extend the sec tritv of rural land as a source of inv.slliient, reduce! interest rated on loans, and act as a compulsory insurance .scheme against bad years. 1 followed this up by .-huwing that J. During iho war years our prod ice had been sold at a guaranteed price to the Imperial Government. 2. Japan had instituted a guaranteed price for its rice "rowers. LI. Schemes to ensure a reasonable [r eo for butter were operating in Denmark, Estonia. Midland, Latvia, .Finland. Sweden. Australia, and the Irish Free St site, ■I. In the I nited Slates Three Tarty contracts fixing prices and quantities of tobacco, cotton and ot ho r p;oods were operating. ">. Great Britain had introduced a procedure which guaranteed farmer* prices for milk, pigs, bacon, hop;;, potatoes, etc, (j. The major portion of prices charged in New Zealand for goods and services were fixed either by private monopolies or the State. 7. The wheat and fruit growers of the Dominion had either legislative or administrative protection which ensured them prices cove.'in.j tiiair costs.

"I then pointed out that the proposal could only be carried out after the completion of Agreements with Great Britain and other countries to give us a market for certain tonnage of butter or other products in return for a reciprocal agreement to utilise the credit ccivt'd from the sale of the 1 utter, el", (after provision had been made for the payment of interest and redemption of our overseas debt) for the purchase of goods for import to the Dominion. "With tlie quantities providid for in these agreements plus (he tonnage required to meet the NeW Zealand demand, the Government would negotiate with the dairy industry the price to he paid for products, and the order would | lie placed for the given quantity at this price, the pav-out to be made 011 delivery to 'grading store. "The case as I made it was an objective one, giving the advantages and difficulties that might be experienced in making the change. Irrespective of the merits and justice, of the case for paying the farmer a fair and reasonable sum for his work, we will in my opinion be compelled as a nation by the restriction policies of other countries, including Great Hritain, to take tfie necessary steps to provide a niark"t negotiations between Guvenunent and Government." "May 1 say a few words with regard to the subsequent proceedings at the conference, I was of opinion, as I was Mr Morton, that the proposal would be considered 011 its merit.-; but j Mr. Sinclair immediately stipulated , party prejudice by eritcising the cha.r- | man and executive for allowing a mem- | Iter of the Labour Parly to deliver an J address to the delegates. He then mis- j represented the position by saying that 1. had said that the success of the proposal depended on bulk purchase I'.v Great Britain —a stabilised pi'ice in Great Hritain —which meant a Labour Guvenunent in the Old (.'ouir'ry. "My statement was for an agreed market in Hritain, not purchase, and I made no reference to a stabilised price overseas—that is a question lor the British 'Government —bn|l even (Mr, Stanley Baldwin has stated that it ! agreement could be reached bulk pur- | chase would be better all round. j "Another opponent at the conl ereiu-e | —a Mr Brechin —warned the tanners j against guaranteed prices, saying that ] the Milk Department of the Wellington j City Council, to which he was a >up- 1 plier, found it necessary to charge the consumer L'di) per cent, more for his 1 milk than it paid him iMr Brechin) j for his milk.'' j '•'This statement, was the grossist j

| misrepresentation, as the return lor I the Milk Department for the year ended March :11st. !!»->. showed that the price paid by the council to the farmer at his »'ate, averaged S.TI.'l pence per gallon, or slightly more than l/.N per 11, butterfat. That the co-t of the milk per gallon at the depot in Wellington was 11.11(11 pence, the a\erage selliirg price was I'Ul.'i pence, the difference being Jl.XOlt pence —which covered pastuerisation, bottles, bottling, delivery, and all overhead—and that on a turn over of tl 5:i,.)7.) the net prolit was £bl7ii. equalling less than two and n half per cent. The manager of the citv council milk department on enquiry says that Mr Brechin's name is not, and never has be'n, on their list of suppliers. '■'The remit was defeated, not on a delegates' vote (because well over three hundred were present) but on a factory vote, but even then !>!> factories neither voted for nor against t lie motion, the actual result being: For guaranteed prices, 20; against guaranteed prices, IVS; did not vote, ol*. "Returning to Mr Sinclair's press statement, may I say that Mr Morion s procedure was in my opinion correct, in that the objective to-day should be to discuss proposals on iheir merits irrespective of their source. I did not intrude a single prejudice against the Government ol ' anyone else when making my case, Mr Sinclair introduced political prejudices to bias the dclcgal.es against the proposal, (M"r Brechin stated something that was positively untitle in his efforts to influence the delegates a-gainst the pro-] posal. J ".Mr Sinclair says that the farmer must accept world parity. Will he advise the industry how world parity is ; ascertained when all markets are re-; stricted by tarilVs, and many id' them | bv quotas,' Also, if world parity is (n j lie the basis, what proposal has he fori Fhe farmer when world paiily H below j BOstHe says that "if the farmers ask ' for prices higher thair world parity j for the exportable surplus, the higher) price must be paid by the people ol j New Zealand." | "There is no such thing to-dav as | "world parity," but if the price paid j to tne farmer exceeds the price realised j overseas the difference must ultimately j be paid b\- the people of the Dominion. : But to-day tliev are paying the farmer [ iM per cent, on the realised price, irre- J spectivce of whether the price covers j cost or not, with the absurdity that as prices fall the premium to the farmer is reduced also, and as prices rise his ( premium increases, whereas tinder j guaranteed prices he would be paid a j fair price for what he is required to ] produce. A 'fair price' is the sum | necessary to produce a lb of butter-tat | on the average farm, which must in- | chide payment to the fanner for his j skill, knowledge, energy and experience." The price would be lixed by negotiation between the industry and the Government. "Mr Sinclair says that wages must be increased to enable the people to pay the guaranteed prices. This is quite correct. The proposals are dependent on the people being able to purchase the goods which are produced. This implies wages equal in value to the price paid to the farmer for like work. He also comments on mv not telling the conference what was a fair guaranteed price for butter-fat. The answer is, as previously stated —a fair price for butter-fat is the working ex-

peases plus cost of suitable land and payment to the farmer for his work. "The difference between this scheme and that advocated by Mr Sinclair in lil.'lO is that the farmer gets a positive price based on cost for his product instead of a speculative price. If the proceeds of the sa.lc over the years do not meet, the price paid then the account will be ad'jnsted through the ordinary procedure, but a balanced economy will inevitably give a payable price for commodities. "Let us look at Mr Sinclair's guaranteed price proposal: He advocates that the minimum retail price for butter in New Zealand shall be fixed [by a butter stabilisation committee, I that, presuming that this price is: i fixed al l/(i per lb and that the allowI ance for patting and distribution is Ud per lb and the. retailer's profit is 14d per lb with an t'.o.b. parity price of Id per lb, the division of the 1/fi paid by the butter consumer in New Zealand should be as follows:—ltetailer lid, butter stabilisation committee 4d, dairy companies supplying local market 1/01—1/(5. "The Id per lb would be distributed among all butter factories in proportion to their tolal output. The result of Mr Sinclair's proposal would be that butter users would permanently pay 4d per lb extra for butter to subsidises butter exported. The proposal I .submitted to Ihe conference provides for ascertainment of quantity required, with payment to the farmer of the cost of production including' a reasonable sum for his own labour. That makes the nation responsible for Ihe marketing of the butter with losses or gains, if any, to the nation, '' Another supporter of guaranteed prices is the president of the Farmers' t'niioi (Mr W. .(. Poison), who in Parliament last year advocated thaT ihe farmer should lie paid lOd per lb for butter-l'iit, and that if the sales overseas did not realise this sum the (1 i IT" re nee should be made up bv a payment from the Reserve Bank. "The question of 'guaranteed prices' is id' such importance and the correct understanding of the proposal so essential to the farming industry that within reasonable limits I will be pleased to sued and explain the proposals to meetings of farmers at any time by The purpose of these meetings should be (dear. "Will the proposals for a guaranteed price for farming products put the primary industries of the Dominion on a sound footing and ultimately lead to the balanced progress of the Dominion?

| In brief, the proposal involves the ] following procedure: — ] I. Negotiation of reciprocal agreement | with overseas countries for guaran- ] teed markets for state quantities of our primary products. '2. Ascertainment of our internal requirements of the same products, li. Negotiations with primary producers ducts required at cost <•)' production for arrangement of price for proI including reasonable payment: for j fa. liners' time, skill, knowledge, and | experience. 14. Arrangement for payment of guarI anteed prices through Reserve Bank I of New Zealand. j .1. ('outml of internal price level and j minimum wages to ensure consuifipj tion of . the production of the ] Dominion.