GUARANTEED PRICES

Otago Daily Times, Issue 23858, 12 July 1939, Page 5

GUARANTEED PRICES

TO THE EDITOR

Sir,—l am entirely, at a loss to understand why Mr J. E. MacManus should assume that because I affirm that the main problem facing the fanners is that of a reduction of productive costs, I favour an attack on wages My letter was a defence of the Prime Minister’s attitude to the subject, and an exposure of Mr Mulholland’s misrepresentation of that attitude. It was not a defence or an attack on the principle of guaranteed prices. I was attempting to show that much of the propaganda published, pro and con, Is clouded by emotional and obviously partisan statements that effectively prevent any clear analysis of the efficacy of the proposal to attain its end. Mr MacManus’s contribution is no help in that respect either, and I fail to see what bearing the remarks he makes anent the sugar cane workers have on the matter. The weakness of Mr MacManus’s argument is apparent when he himself states that the sugar cane industry is protected from outside competition, which makes it possible to maintain a guaranteed price for sugar. What is it that is protected? Is it the local market for sugar? If so, where is the surplus “dumped”? The analogy is hardly a fair one. In the case of butter, our market, except for a small amount that is sold locally, is an overseas one, over which we have no control. If we had the power to “ protect" our market (as, I presume, is done in the case of sugar) we should then be on entirely different ground. Finally, on this point will Mr MacManus explain why the price of sugar has risen so sharly over recent years? My explanation of the problem of guaranteed prices, where the bulk of the produce Is shipped to meet open competition, is that it is an unsound policy to pay more for that produce to the farmers than it will fetch on the average over a period of years. Mr MacManus states that “ a guaranteed price as it develops will ultimately take into account all costs., - including those of labour." If this is so. then we will still be in the throes of the vicious circle of wages, costs, and prices. As the exponents of Douglas affirm that there is not sufficient purchasing power liberated in the cycle of production to buy the finished article and to: cover wages, costs of raw materials, depreciation: interest, and selling charges—and I am inclined to agree with this statement—how can a guaranteed price cover all these items? Perhaps Mr Chapman will explain if Mr MacManus cannot do so. Finally. I am prepared to affirm and to produce evidence thst will prove my contention that a system of co-operative farming can and does reduce the costs of production without reducing wages rates. At the same time, it allows the produce of the dairy farmer to, be placed on the table of all wage workers a| a price within the scope of the worker’s wage rates. Mr MacManus may also remember a rise in the price of butter during the past year due to the rise in the guaranteed price, which, in the opinion of the committee, that determined the price, was not sufficient to cover the costs of production But of that more anon.—l am. etc., G. J. Brooker. ntekaike. July 7.

TO THE EDITOR Sir, —Your correspondent James Wood says he is not concerned about who is going to foot the bill, but is concerned with what the bill is going to be. The taxpayer has to pay the deficit. I ask the question, is this tax going to equal any benefit that may be received from a guaranteed price? The price of potatoes this year is the reverse from that ruling last year, when the price was extremely low. This variation is due to the consumption as Compared with the production as much as to a faulty svstem of marketing. The marketing of produce produced and consumed in New Zealand can be controlled. so why not extend this system to produce sold overseas. By a system of controlled marketing we overcome commission farming and have no need for a guaranteed price. I would like to correct a wrong impression which mav be caused by the last paragraph of Mr Wood’s letter. The New Zealand Federation of Young Farmers’ Clubs is under Government control, and the rules forbid the discussion of politics at any club meeting.—l am. etc., H. W. PerriamGibbston. July 10.