King Country Chronicle Saturday, July 18, 1936. GUARANTEED PRICES.

King Country Chronicle, Volume XXX, Issue 4872, 18 July 1936, Page 4

King Country Chronicle Saturday, July 18, 1936. GUARANTEED PRICES.

Only two weeks now remain before the Government discloses its guaranteed price for dairy produce, and the greatest marketing experiment in the history' of New Zealand begins its trial. To satisfy the farmer the price fixed will have to be high—butter quotations are up to 117 s at the present time, and with the exchange this means a gross factory pay-out of Is Already dairy companies' pay-outs are up to Is l%d, so that with the prospect of rising costs, the farmer will scarcely be satisfied with, say ,a guaranteed price of Is 2d. Mr. Savajje refuses to be stampeded, however. "Our policy has been settled, and the higher the price the better we shall be pleased," he told the farming community this week in one of his urbane generalities. All that the farmer knows about the actual price is that cheese factories have been told that the pay-out to their suppliers will be l%d in advance of that paid to butter factory suppliers and that to raise the quality of our produce the prices will be paid under a five-grade system. Certainly it has been laid down that the price would be the average over the past eight to ten years, but this seems as much a platitude as Mr. Savage's repeated injunction to farmers not to worry. One of the points he has made is that farmers will be relieved of such worry over market fluctations "during the season." But it is not seasonable fluctuations that are the bane of the farmer, but slumps in prices spread over several years. To have a guaranteed price over a season would probably be beneficial, but only to a limited degree—what he wants as the ideal is that he can be sure of a reasonable price for his product over several years and arrange his finances accordingly. In fact, the Government itself would need this in their effort to secure a "proper balance between production prices and land values." Mr. Savage has said that if the Government bases mortgages on the guaranteed price, the result generally would be justice to all parties —yet if he can base mortgages on a price of a single season he can do what no man before him ever even attempted. If prices were fixed at Is 5d per lb. over a period of years, however, how long could the Government hope to receive, the dairy farmer's vote in the event of butter rising above this figure, as it may well do owing to war fever in Europe. The whole position is fraught with difficulties. One that the Government has foreseen is that a guaranteed price will cause speculation in land. This is their excuse for not revealing the price sooner, and to | overcome the tendency legislation is : to be introduced to ensure that benefits would not accrue to the speculator. As far as can be gathered from Mr. Savage's remarks, the Government's way of coping with the situation is to be a higher charge on the transfer of dairy farms—which certainly is a remedy with a sting in its tail. As for the adjustment of mortgages, this will have to be done drastically, or the guaranteed price will have to be high to compensate the farmer for his increased wages and costs bill. Nor must it be forgotten that the State is vitally interested in dairy farm mortgages, while mortgagees, many of whom have spent their lives in farming and retired on income from investments, are entitled to some reasonable return for their savings. As it is they will be hard hit by the rise in prices. Marketing difficulties have been well foreshadowed, and with a guaranteed price New Zealand will be open to the charge of dumping, so that it will be interesting to see what is the outcome of the deliberations between the Hon. W. Nash and the British Minister of Agriculture, the Hon. Walter Elliot. In the meantime, of course, the sheepfarmer will be strug-

gling along with what the world's market grants him in wool prices, and what the Government gives him in rising costs —and in view of the Government's oft-expressed worry over speculation in dairy land, it is interesting to note the number of clearing sales of dairy stock in this district. It may be partly .due to ragwort, but we have had this difficulty with us for a long time now; but most probably the tendency is because of rising costs, the almost certainty of acute labour troubles in the future, and a lack of confidence in the far-reaching scheme introduced by the Government in an endeavour to secure an adequate return to the dairy farmer.