THE GUARANTEED PRICE

Otago Daily Times, Issue 23859, 13 July 1939, Page 15

THE GUARANTEED PRICE

TO THE EDITOR Sir, —If “ Countryman ” gazes at the butter prices up to 124 s per cwt and he adds to that the rate of exchange he may alter his view “ that there is seme doubt of the advance ever being repaid." Experience of wool returns shows that wool, which is less perishable than dairy produce, would be a safer produce on which to advance a stabilised guaranteed price that would be enough to make it pay the farmer to grow it, as in addition to being less perishable the low fluctuations in price do not last as long as with butter or cheese. The best proof of the benefit of the guaranteed price is the fact that dairying in Queensland under a guaranteed price is expanding, while in New South Wales it is decreasing. Thus in 1937-38 Queensland’s share of the butter exports was 32 000 tons. In 1938 to 1939 Queensland increased her exports to 54,000 tons. Victoria’s share of the butter shipment is down to about 26,000 tons, against 33,000 tons for 1937-38 and New South Wales—held up also as a model of anti-Labour rule —was down to 10,000 tons, against 14,000 tons m 1937-38. Queensland’s success with her butter marketing justified New Zealand in taking a further step that also included a guaranteed price. Mr Savage is finding the means of reducing costs. He has set up a commission of inquiry where sworn evidence may first get at the facts. For instance, the i importers claim that Oregon pine boards from Canada that cost 9s cost them 35s by the time they are landed in Dunedin, partly due to paying the exchange rate on purchase price, then on railway freight, wharfage, and loading cost above shipping freight cost, and, as our New Zealand harbours have to pay exchange rate when they pay interest on London loans, it has to be paid twice in New Zealand if the timber is transhipped, as most of it is. This applies also to fencing wire, farm implements, roofing iron and many farmers’ requisites, the Royal Commission will find out how much of the benefit the farmers receive from the exchange rate is lost by these means. It will also find out how far land speculation, with its attendant evils of mortgage charges and interest, resulting in high rents, add to the costs as well as other things What Savage did say was that he would not reduce wages as it would reduce the spending power that bought much of the farmers’ produce Other costs he would reduce ( when he knows what they are. Addressing the Australian dairy factory managers and secretaries’ conference in June, the chairman of the Commonwealth Equalisation Committee. Mr J. Purcell, said “he felt strongly on the question of import restrictions, as of 470,000 tons of butter imported into England, 225.000 came from foreign countries. He considered that before imposing restrictions on Empire countries, Britain should restrict foreign butter. It was disooncerting that Britain should use 4000 tons of margarine a week, compared with 9000 tons of butter, especially as the former was coming from black labour countries. The butter industry in Australia was being seriously affected, as there were 21 factories in Australia making margarine. Butter companies had to make returns and there was no such thing as margarine returns. About 14,000 tons of margarine were consumed in Australia, or about 16 per cent, of the butter used in the country." I quote those words as helpful suggestions, as they conform in part the views expressed by me.—l am, etc., J. E. MacMamw, Dunedin, July 11.