FAITH IN CONTROL.

New Zealand Herald, Volume LXIV, Issue 19699, 27 July 1927, Page 13

FAITH IN CONTROL.

MARKETING OF PRODUCE.

PRICE FIXATION CONDEMNED

FUTURE OUTLOOK BRIGHT.

OPTIMISM OF MR. W. J. POLSON.

[BT TELEGRAPH. —OWN CORRESPONDENT. ] WELLINGTON, Tuesday.

"In spite of the recent set-back of control, I am convinced that .!t will ultimately achieve all that was expected of it without price dictation, and that the producers of this Dominion will some day realise its value." This was the opinion expressed to-day by Mr. W. J. Poison, president of the New Zealand Farmers' Union, in addressing the annual conference in Wellington with regard to the marketing of New Zealand's primary products.

"The recent set-back to co-operative marketing in connection with our dairy produce, and the reduced prices obtainable generally for most of our products, have created some anxiety," said Mr. Poison, "but I think there * should be no such feeling. The present depression, although severe, is undoubtedly temporary. All the evidence points to an increased demand for the products of the soil, and the trend of modern economic evolution is so decidedly toward the association of individuals into groups for the merchandising of all products, whether primary or secondary, that organised marketing is inevitable, however noisy the opposition to it."

Problem of the Future. The problem of the future, in Mr. Poison's" view, will not be how to find markets, but how to stimulate production sufficiently to satisfy those markets. Allied to that was the problem of how best to meet business organisation by business organisation, by tne application of orderly methods to farm marketing in order that the benefits of increased demand might not be lost through the handicaps associated with "dumping" and hapnazaid individual control. Turning to the factor of increasing population and the possibilities of productive expansion to meet the increased demand, Mr. Poison quoted the conclusion of Mr. G. H.. Knijbbs, the eminent Australian statistician, that, on the assumption that it takes two acres to support a man, the tillers of the soil must every year prepare, plant, cultivate, harvest and market the produce of nearly 40,000,000 acres more than in the year before. But, whatever the rate of increase in world population, the stimulation of primary production was necessary. The market for the produce of the soil was, beyond question, steadily increasing, and there could be no doubt about the great future of the dairying industry. It was his opinion that pressure of population and the need for cheaper food must in the near future break down the economic barriers of some of the Dominion's greater neighbours, and destroy arbitrary fiscal cordons, which could provide no permanent national bulwark against competition. Value of Co-operative Marketing. But, however wide the possibilities of the iiuture, no adequate advantage could be taken of it without organisation. The outstanding success of the Danes, who had turned a poor country into a rich one, was due to sound organisation. America's efforts in this direction had also achieved the most striking results. Tracing, in this connection, the development of co-operative marketing, Mr. Poison quoted the example of Canada. The co-operative grain-growers of Canada would this year control 80 per cent, of the Canadian wheat crop, lhat was a record of romance that almost transcended fiction—a record of co-operative endeavour, crowned now with success only after long and bitter years of struggle against vested interests and greedy monopoly. All co-operative marketing organisations eschewed price dictation. Price-fixing was a matter of definition. Ifc was evident, for example, that the Danes controlled their produce to almost as complete an extent as that attempted by the New Zealand Dairy Control Board.

Go-operative Price Regulation. Many opponents of price-fixing confused the methods of co-operation with arbitrary price-fixing, a practice which was entirely indefensible. But co-opera-tive price regulation was an important incident in merchandising, although it was a jneans to an end rather than the end itself. It would appear that control with arbitrary price-fixing was impossible without a monopoly of the product. One of the outstanding instances of control with price fixation and restriction of output was attempted in 1925 by Cuba, a country which produced over 5,000,000 tons of sugar annually. Powers were invested in the President permitting him to restrict output by 10 per cent, and to fix a price. Put Cuba, like New Zealand, had no monopoly of her principal product. The immediate effect of a reduction of 10 per cent, in the output of sugar was to create an impetus in the production of beet sugar in Europe, and tliero were indications of new sugar from other countries being brought on the market. It was extremely doubtful if the experiment, which was devised for a two years' trial, would be made permanent. The inexorable law of supply and demand rendered such schemes futile.

Fooling the Key to Problem. "The New Zealand system of control is not singular in conferring legislative power or control boards to bind minorities, but it possesses advantages over other mandatory systems, inasmuch as it does not allow any interference with production, and leaves it to the producers to decide what measure of control, if any, they shall employ/' said Mr. Poison. , . x,_ "It seems to me that pooling is the key to the successful merchandising of our products. It is impossible to contemplate organised selling without pooling. Pooling gives the most important measure of control, and enables regular tion of the rate of movement to market, and the distribution of the product as to locality and demand. To abandon pool ing is to show want of study of economics. It is to betray the producers and deal a deadly blow at co-operation. "One thing appears certain: That control along such lines as we have adopted is essential to the industry, and the future of the primary producer, whether he is a grower of butter-fat or wool, need cause no uneasiness," concluded Mr. Poison. "The markets which already exist are likely to increase continually; the organisation to capture them depends upon the producer."