King Country Chronicle. Saturday, February 13, 1937. THE GUARANTEED PRICE.

King Country Chronicle, Volume XXXI, Issue 4955, 13 February 1937, Page 4

King Country Chronicle. Saturday, February 13, 1937. THE GUARANTEED PRICE.

There is a fear in some circles that the Government will extend its policy of “guaranteed prices” to the wool industry. Some drastic measures were instituted by the Government during last session, but if it is going to extend its policy to wool it will involve one of the most dangerous ventures ever attempted in this country. The wool industry is a gamble and subject to violent fluctuations. During the last decade the average price of wool has ranged from 5d to 14d, and it is quite impossible for the most experienced experts to prophesy what prices will be a few months ahead. The prices so far this season can be classed as nothing less than phenomenal when the previous season’s prices are considered, but with the land tax and other taxes combined with the large increase of all costs of production and living are taken into consideration, it is doubtful whether even with a 60 or 70 per cent, increase in prices, the woolgrower is very much better off than last year. There is nothing to indicate that the prices of this season will be maintained, and if there should be -a substantial drop, the outlook of the wool-grower, with the extra heavy costs he has to bear, will not be at all promising. It cannot be said that the “guaranteed price” policy of the Government at the present is an unqualified success. At the present price being received in London for our butter the Government (or rather the taxpayers of this country) are paying a heavy toll. Like the woolgrowers, however, the dairy farmers are no better off than when they had the marketing of their own produce. Their costs of production have likewise risen, and in most cases the net income. is smaller than it was two years ago. The Government may be able to arbitrarily control the guaranteed price for New Zealand, but it cannot dictate prices on the overseas markets. The basic wealth of this country comes from the soil. When the farmer is doing well all businesses tend to flourish. If these businesses are to be taxed to pay the farmer who provides the means for them to carry on, then the time will come when both sections will suffer. This is only an economic law that cannot be overcome. On the present evidence of increased costs the dairy farmers have a strong case for raising the scale of the guaranteed price, and will present their demands accordingly. In this they would be perfectly justified, but some day there will arise the problem as to where the money is to come from. Any government can create artificial prosperity for a period, but such prosperity cannot last indefinitely, for a reaction is inevitable. There is a limit to the amount of wealth in this country and the maximum and the minimum of that wealth depends on what we are offered* in the overseas markets for our exports. If business concerns are based on the work of the farming community, how long can they stand the strain of helping the man on the land by creating a superficial prosperity? The laws of economics are inexorable as will be realised in the country as the months go by. The farming community and business interests must work in co-operation, and it is absolutely futile for one section to bolster up the other by artificial means. It must also be realised that the workers of both sections are vitally involved in the prosperity of the farmer and the business man.