THE New Zealand Herald AND DAILY SOUTHERN CROSS MONDAY, AUGUST 30, 1937 THE GUARANTEED PRICES

New Zealand Herald, Volume LXXIV, Issue 22820, 30 August 1937, Page 8

THE New Zealand Herald AND DAILY SOUTHERN CROSS MONDAY, AUGUST 30, 1937 THE GUARANTEED PRICES

Disappointment with the new season's guaranteed prices for butter and cheese is bound to be widespread among working dairy farmers. The Minister of Marketing has named prices that promise no better a return than the overseas market may be expected to give. Taxpayers will devoutly hope that such proves to be the case. On the other hand the dairy farmer has to pay heavily increased costs, largely imposed by the operation of the Labour Government's policy. These higher charges on production have been estimated by such responsible organisations as the New Zealand Farmers' Union and the New Zealand Co-operative Dairy Company to amount to about 3.40 d per lb. butterfat. Against that the Government is giving a rise in price of .SBd for butter and of 1.35 d for cheese, leaving the farmer to carry the remainder of the increased costs loaded on to his industry. In fact he is compelled to pay out of his hard-won output for the higher wages and shorter hours of the town worker. His reasoning will be simple but penetrating and efficient, and probably on these lines —he is getting no more under the guarantee than he would expect to obtain under ordinary marketing; he must pay added costs reliably stated at 3.40 d per lb. butterfat; and, therefore, he is a deal worse off than he would have been without the Government and its guarantee. Nor does it help him to reflect that his labour and effort, and those of his family, are being exploited for the benefit of the town worker.

If ,the assumption be correct that the guaranteed prices are fixed no higher than the overseas market may be expected to return on the average, then the taxpayer has cause to feel reassured. He may not be called on to make good a deficit in the Dairy Industry Account. At the same time the Government accepts a grave risk on the taxpayer's behalf. The disturbed international outlook may defeat the promise of the daii'y market. Moreover, should the London market fall below 101s a cwt. for butter, and 57s for cheese, the British Government may impose , a levy in oi'der to subsidise United Kingdom dairy producers. That levy would be paid, not by the dairy farmer, whose prices have been guaranteed for the whole season by Mr. Nash, but by the Government. A levy of id per lb. on butter and id on cheese imported into Britain would cost the New Zealand Government about £1,800,000, calculated on last year's exports. The cost of a levy would have to be added to the losses due to the low prices that made the levy operative. The farmer may fairly rejoice that he accepts none of that grave risk; he has his guarantee and the certainty and stability that goes with it, some solace for increased costs. On the other hand, the taxpayer's outlook is grim. On a steady and comparatively high market in London, he may break even. Should the market slip, however, he will be faced by a serious deficit. He carries the risk with no prospect of compensation.

Mr. Nash's announcement of the new season's prices is the barest possible. The farmer is not told what figures the Government's committee recommended and how far these have been amended by the Minister or by Cabinet. He knows that the Government is required by the Act to take certain factors into consideration, but he does not know how much weight was given to each of these factors. He cannot demand information because he has no standing in the matter at all. The worker is provided with impartial tribunals for fixing wages and conditions; the landowner can have recourse to a Court to fix the price of his property; but the farmer must take what he is given by the buyer for the fruit of his labour. He receives a dictated price that he cannot question; it is beyond appeal. He is not represented nor consulted. Now he is informed in a curt statement of the prices the Government is pleased to pay. He may have no legal right to ask for the grounds on which the new guarantees are based, but he certainly has the strongest moral right. It is expected that Mr. Nash will amplify this morning's statement, and it is to be hoped he will do so promptly and fully. The dairy farmers deserve better than the present arbitrary statement. They are entitled to reasons., They should be given the report and recommendations of the Government's committee and some account of how Cabinet reached its decision from that report. The Government should also seriously consider amending the present one-sided system of fixing the prices. The buyer should not have the sole voice; the seller should also be heard. The Farmers' Union has made the reasonable suggestion that the prices should be computed by a tribunal presided over by a Supreme Court Judge. Other members of the tribunal would consist of equal numbers of assessors nominated by the Government and the dairy industry, the prices to be determined on evidence. In other words, the farmers ask for an Arbitration Court such as the workers have for fixing the reward of their labour and effort. Such a system could well be instituted to supersede the present dictatorial method. A tribunal as suggested would accord with democratic and representative principles, have ample support in precedent, and return an impartial verdict.