MARKETING SCHEMES.

Manawatu Standard, Volume LVII, Issue 9, 9 December 1936, Page 8

MARKETING SCHEMES.

Investigations of the Economic Intelligence Service of the League of Nations have established that world production of foodstuffs (excluding China), which had increased a little between 1928-1929 and 1934-35, declined slightly in 1935-36. As the demand for agricultural products at the same time tended to rise, the price level has registered some improvement and farm income has increased in several countries. The depression has nevertheless continued in many important areas owing to the growing isolation of national markets resulting from the familiar self-sufficiency policies which have reduced the quantum of international trade in foodstuffs by 14 per cent, since 1929. A common feature of such policies has been the adoption by the States of measures calculated to impose “fair” prices for agricultural products and at times guaranteeing the prices of particular specified goods. Interferences with the free functioning of the price system arc by no means a new development, but there can be little doubt, as a recent League report has pointed out, that in the past few years an ever-increasing segment of prices has come to represent “administered,” pre-determined prices, and uot “functional” prices actually determined in the market by the tree interaction of demand and supply. The “administration” necessarily involves at least a partial control over supply, and this control is usually attained by the restriction of imports through tariffs, quotas, and similar devices. In recent years wheat has provided the classic example of this form of interference. The differences between prices in exporting and importing countries to which this policy gives rise are shown in the League’s publication, “World Prices and Production.” In the exporting countries wheat quoted at cents per bushel of 6L)lb, were, in Argentina 93 cents, in Australia 99, in Canada 101, and in the United States 106. In the importing countries the prices given are France 155 cents, Austria 185, Germany 229, and Italy 247. In some of these importing countries the State not only affords protection to wheat pro : ducers through tariffs and milling regulations, but guarantees minimum prices by offering to buy all domestic production at a specified figure. In hranee the stimulus given to domestic production by high prices is so great that the price control has been threatened by the appearance of an export surplus.