DAIRY PRICES

New Zealand Herald, Volume LXXV, Issue 23057, 7 June 1938, Page 13

DAIRY PRICES

COMPENSATED SYSTEM JUSTICE FOR FARMERS MR. HAMILTON'S CLAIM CONSERVING NET INCOME [BT TELEGRAPH —PRESS ASSOCIATION] HAMILTON, Monday An exposition of the compensated price as a system designed to give farmers the same living standards as those enjoyed by other sections of the community was given by the Leader of the Opposition, the Hon. A. Hamilton, during his broadcast speech in Hamilton to-night. Compensated prices did not exist as a formula or a plan, he said, but as the acknowledgment and practice of a principle. "Almost as long as I have been in Parliament," Mr. Hamilton said, "1 have heard leaders of the present Government stating that export prices and price levels in Great Britain or elsewhere should have little or no influence on our internal standards or price levels. The same thought is now being advanced under the strange but unexplained title of 'lnsulation.' There may be some misunderstanding about compensated prices, but there is no mystery. However, there is certainly a mystery surrounding the method by which the insulating theory of the present Government is to be worked. Dependence on Exports "The compensated price system works on the assumption, practically the opposite to the insulating theory, that New Zealand's general prosperity is largely dependent on export prices, or on conditions and price levels in Great Britain, where we sell our produce and buy most of our imports. This being so, it is necessary in the general interests of New Zealand, as well as of the farming community, that internal costs should not get out of a reasonable comparison with export prices." The Government seemed quite satisfied to fix wage standards on farms at 10s 5d a day, Mr. Hamilton continued, and to pay £1 a day on public works which were really only relief works. Under those conditions, the farmer had no chance of competing for labour. The advocates of compensated prices claimed that costs in New Zealand should be kept in reasonable relation to export prices and that the living standards of farmers should bo protected against rising costs. Protection against price fluctuations was lost if the farmer was not similarly protected against ever-rising costs, which had to be met out of his slender net balance. The Government's so-called guaranteed price stabilised the dairy farmer's gross income, but it did not stabilise the cost of his necessary expenditure. That was the reason for its failure. Regulation of Oosts Under a compensated price, Mr. Hamilton continued, the Government's first duty would be to regulate internal costs or prices so that farmers who had to sell their produce against world competition would not have too great a portion of their gross returns ! eaten up ip costs. It had to be remembered that it was the farmer's net income, not his gross income, which counted. The second duty of the Government would be to legislate so that farmers who had to meet world competition would be placed on a competitive basis with, other industries. Farmers would be prepared to accept fluctuations in price levels on the world's markets so long as they were given protection comparable with that provided for other industries. "When the National Party takes over after three years of Socialist rule," Mr Hamilton said, "the job will not be easy. However, it must be tackled. The present Government has gloried in its policy of increasing costs, which has embarrassed every industry, and the first thing will he to call a halt to the ever-present increases and the rising spiral of costs. The Underlying Principle "Farming is one of our essential industries, if not the most essential. There is no other country in the world with such a large export trade in primary products. It is only fair and just to see that those encaged in tho farming industry are not asked to live and work for a lower wage or standard than other sections of the community. "That is the principle underlying compensated prices," Mr. Hamilton concluded. "The first essential is to keep a correct balance, so that there will be po need for adjustment or compensation. Those who deny the justice of this claim must answer the charge that they are not prepared to give the farmers the same standard of living as is enjoyed by other sections of the community." SEASON'S SURPLUS BIGHTS OF FARMERS ACCESS TO OWN MONEY LABOUR AND RISING COSTS . [BY TELEGRAPH —PRESS ASSOCIATION] HAMILTON, Monday The promise of the Government to distribute among the dairy farmers this season's surplus in the Dairy In- j dustry Account was the subject of com- . nient by the Leader of the Opposition, j the Hon. A. Hamilton, in his broadcast speech at Hamilton to-night. Mr. Hamilton repeated that the full season would probably result in a surplus of £2,000,000, and that the money belonged to the dairy farmers of the Dominion, who were tho only people who had any right to it. "The Prime Minister has told the dairy farmer," Mr. Hamilton continued. "that the present surplus of £500,000 will be handed over to the farmers some time before the election. What I want to impress on the farmer is the fact that this money is the farmer's by right. It is the balance of what his butter and cheese was sold for on the open market. "If the Government is really in earnest in its desire to help the dairy farmer, it will do two things. In the first place it will stop taking the farm worker off the farms to public works, and, secondly, it will honestly tackle the problem of increased costs, which are proving such an intolerable burden."