LIMITATION OF PRODUCTION

Manawatu Times, Volume XLIX, Issue 3288, 6 March 1926, Page 14

LIMITATION OF PRODUCTION

THE FARMER SACRIFICED ON THE ADTAR OF FETISH:

PRODUCE! PRODUCE!

At a time when “Increased Production” is accepted as the shibboleth to prosperity by a certain section of producers and politicians, irrespective of economic laws and principles, it is refreshing to see propounded the other side of the question.

“In dealing with surplus production it is necessary to examine the problem from every angle (says the "Producers’ Review.” The most crusted shellback political economist must admit that there is a limit ■ to the consuming power of the community, and, admitting this, must therefore admit that production beyond this point means that a certain amount of energy, work and capital has been wrongly directed. That amount of production In Excess of the requirements of consumption is not only wasted, but has unnecessarily depleted the soil to that extent.

Production is reduced, when overproduction, with its consequent low prices, has driven men off the land, and probably through the Bankruptcy Court. If the cry "No limitation of production” is sound, then those who produce more than it is possible to consume should be compensated for doing so, even if the surplus production has to be destroyed. What is the effect of over-produc-tion upon the community, apart from the effect upon the producer himself? It means that the cost the necessaries of life fall below cost of production. It means that the purchasing power of money is increased without any benefit to the producer. The wages of the worker go further and provide him with a deal more pleasure. But the producer who supplies him with these necessaries is compelled to accept a price that does not return him anything like the basic wage. Someone will at once exclaim: "But the lower price of commodities enables the worker to buy more." There is a limit, however, to the worker’s consuming capacity, and it is when production gets beyond that point that the producer gets It where the chicken got the axe. Another phase of over-production is Its boomerang effect upon the consumer. Over-production brings ruination In Its train, with the result that there is on enforced reduction of production. This, In its turn, brings about a shortage of supplies, with the inevitable increase in price—an undue increase very often brought about by speculators in foodstuffs.

Organised production means stable prices, and with organised production there must be limitation of production of those lines of which there is a tendency to produce more than is required. By the limitation of production to the full requirements of the community each commodity would find its natural and true price level —not regulated by that socalled law of supply and demand, but by virtue of the fact that a price would be demanded that represented the cost of production under fair and reasonable conditions.

The law of supply and demand should be reversed, and a well-regu-lated law of demand and supplj brought Into operation by the producers themselves. The producer has always worked in the dark. He takes no cognisance of demand. He sends his produce to the market to often find there is no demand. This year potatoes reach an abnormal price, due to shortage. Next year is an excellent one for potato production, and every farmer who can grow potatoes grows them, and when the crop matures and is ready for the market awakens to the fact that every other farmer has been doing the same thing—with the inevitable result. Limitation Of production within reasonable bounds of the "requirements of the community is Justifiable, and it is time the producers in their own interests took the matter seriously In hand.