GUARANTEED PRICES

New Zealand Herald, Volume LXXII, Issue 22197, 26 August 1935, Page 15

GUARANTEED PRICES

Sir, —In the leading article in Saturday's Herald farmers are warned that the Labour Party's guaranteed price policy may be accompanied by increased costs. But high costs did not prevent the farmer from enjoying a period of prosperity after the war. Higher wages and pensions, and employment for those on relief, is a necessary part of the scheme. New Zealand's problem is the world problem, i.e., the loss of her markets, and we are beginning to understand that our most important market is at home. We hare in this Dominion the wherewithal to provide our own people with food, clothing, housing and furniture. We must so organise our community that these services are fully supplied, thus greatly increasing our production and diverting farmers' exports from glutted overseas markets. But the exporting farmer who is providing the means to import these things not produced here tnust be subsidised to compensate him for the service he is rendering to the community. It is being done now by mesns of the es> change, a faulty system, which gives least help where most is needed: the Labour Party will substitute a guaranteed price. J. S. Moxtgomeeie.

Sir, —"Humbug" is quite wrong in comparing the wheat guarantee with the Labour Party's proposal to guarantee prices for wool, meat and butter. The wheat guarantee is on very limited production for local consumption and does not apply to exports. It has nothing in common with the Labour Party's proposal to guarantee our huge exports at a price above the market. His reference to exchange is also beside the upoint. New Zealand, rightly or wrongly, raised the exchange from 10 per cent to 25 per cent,, and this placed the farmer-on the same level as his Australian competitors. The Labour Party proposal «>ould, on Mr. Langstone's figures, equal about 120 per cent. However, since we wrote, a prominent member of the party stated at the Town Hall meeting in Dunedin that "the guaranteed prico given to the farmer was nothing more than a repayaple advance and, in the long run; the nation might lose nothing." Thus it now appears that the farmer will be expected in good years to refund any excess price received in bad years. This may be fair in theory, but very hard to realise in practice. The fact is that there are so many conflicting explanations of this policy that it is very difficult to know what it means —and shows that its authors themselves do not know. The guaranteeing of export prices has always failed to work and must do so again. N.Z. Welfare League.