THE New Zealand Herald AND DAILY SOUTHERN CROSS FRIDAY, MAY 27, 1938 FARMERS' PRICE FORMULA

New Zealand Herald, Volume LXXV, Issue 23048, 27 May 1938, Page 10

THE New Zealand Herald AND DAILY SOUTHERN CROSS FRIDAY, MAY 27, 1938 FARMERS' PRICE FORMULA

Not content with the Prime Minister's undertaking to give them an independent tribunal to fix the guaranteed price, the farmers in confei'ence at Wellington have proceeded to suggest the procedure the tribunal should follow and the considerations it should take into account in reaching its decision. These suggestions involve a radical departure from the methods adopted by the doctrinaire Minister of Marketing and enshrined by him in the Primary Products Marketing Act. Mr. Nash may not wish to surrender his pet notions and cherished ideas, but his predilections and dogmas should not be allowed to stand in the way of the farmers' scheme, if it can be shown to be fairer and more practicable. The producers are entitled to the most influential voice in the disposal of their own produce, the fruit of their labour and effort. On examination, the farmers' scheme commends itself above Mr. Nash's. That is not to say that it is ideal, but merely that ' it is the better of present alternatives. The farmers themselves claim no more for it. Their suggestions and price-fixing formula are put forward to cover them "while the guaranteed price is in operation." Their basic policy, which is fundamentally sound, aims at keeping production costs down at a competitive level. Under present conditions, much aggravated by the legislation of the Labour the complaint is that the farmer must "buy dear and sell cheap," purchasing his requirements at the high internal price level and quitting his produce under open competition in the world's cheapest market. Despairing of reduced costs under present political conditions, the farmer is seeking to influence in his favour the other factor in the equation—prices.

Manipulation of prices, it should be remembered, is put forward only as an alternative—a second choice — to the favoured policy of keeping down costs. The methods adopted by Mr. Nash are, however, generally repudiated by the dairy farmers. They object, first, to the price being fixed in secret by the Government, which, as sole buyer, dictates its own figure to them as sellers. Many of their organisations have demanded that the price- be fixed by an independent tribunal on the model of the Arbitration Court, but presided over by a Supreme Court Judge. That reasonable demand has now been conceded by the Prime Minister. Mr. Savage would also do well to accept the further suggestion of the Wellington conference that the tribunal should ipake its price atf&rd on the evidence placed before it and that its proceedings and findings should be made public. After all£the business is not the sole concern of Government and producer. The people are vitally interested in the prices fixed, first, as consumers of» 20 per cent of the dairy output; second, ,as affected by the welfare or otherwise of a major industry; and, third, as taxpayers who may be called on to make up any deficit between fixed price ' and actual realisation. These vital interests can best be safeguarded by proceedings in public and the publication of findings. Next the farmers suggest — several of their organisations appear to be fully agreed—that the price should be such as will (a) enable farmers to pay competitive rates for wages; (b) allow them reasonable interest on capital invested in their farms and stock; (c) enable them to meet increased costs imposed by legislation, including tariffs; (d) allow them remuneration commensurate with the service they render, and with that obtained by other members of the community who render equal service. If this formula be carefully examined, as it deserves to be, it will be found to be eminently fair. The farmers are not seeking any advantage or privilege over the rest of the community. They demand no more than economic equality. Secondary industries receive protection; workers' wages and conditions are carefully conserved; the farmers now ask for like consideration. In the United States the protection they are afforded as a set-off against the high duties on manufactures has been dubbed the "farmers' tariff." The New Zealand farmers' formula is directed to the same end. By comparison with that enacted by Mr. Nash it appears to be easier to apply. Mr. Nash's included a number of high-sounding imponderables, impossible to measure, such as "the public interest," "stability," "efficiency," "efficient production," "the general standard of living," "a reasonable standard of comfort" and so on. All these words and conceptions might be held to have many interpretations, which had nevertheless to be crystallised into a definite price. In the end Mr. Nash told the Taranaki dairy farmers that the whole rigmarole had been boiled down to a wage of £4 a week for the dairy farmer, with 30s house allowance. No one needs telling how that compares with ui'ban wages for a 40-hour week. No wonder the farmers want to supersede Mr. Nash's formula for one of their own, one that appears fair and that seems capable of application. All its terms are measurable by known standards ; it avoids the mass of abstractions inserted into Mr. Nash's formula, abstractions capable of any interpretation to suit the interpreter, who is the Government buyer. If the guaranteed price is to continue, then the farmers' system is to be preferred to Mr. Nash's. A better solution of the problem, and one preferred by both the farmers and the Leader of the Opposition, would be to reduce costs. Mr. Hamilton has suggested that the two methods might be combined, thus closing the gap between costs and prices from both ends. In the meanwhile, however, the farmers have presented their price formula as the alternative politically practicable at present.