QUALIFIED ENDORSEMENT

Otago Daily Times, Issue 23865, 20 July 1939, Page 10

QUALIFIED ENDORSEMENT

The Prime Minister should not' be surprised that his “hint” that {the guaranteed price scheme might be abandoned if the dairy farming industry is opposed to it has been greeted with a shoal of letters, 1 and telegrams protesting against such a move. Mr Savage himself provides a valid reason for the present! disinclination of dairy farmers to see the guaranteed price schem i (abolished when he observes: “(It is obvious, of course, that the farmers are not going to throw over the present system for the system they had before.” But he prefers tio disregard the real significance of objections to the ' operation oif the scheme, and to his cynical “jhint,” as he calls it—“ threat ” might be a more apt word—that the Government may consider its abandonment. The dissatisfaction with the; guaranteed price has arisen because the Government has taken upori itself arbitrarily to fix a price dairy produce that does not give the producer a reasonable return for his labours, taking into account, as is required by the Act, the stanidard of living in New Zealand. The question of production costs inevitably is the important consideration in fixing a price that allows the producer an adequate margin oh which to work, and the rising tendiency of costs in dairying—as in atl other forms of primary industry !in New Zealand—has effectively disposed of any advantage the dairy | farmer might have hoped to obtain! from a guaranteed price. From ttye Taranaki district has come a repiy to Mr Savage’s statement which represents the farmers’ attitude. A meeting of dairy farmers there expressed their support of the scheme, that “ the guaranteed pricje was a figure recommended by tjie commission appointed for that purpose,” the reason for the proviso being “ because it was considered that rising costs must be taken [into consideration.” The endorsement of the scheme thus becomes an I endorsement of the principle of j a guaranteed price, applied as the Government indicated it would i apply it, and having little relation to the scheme in operation, undjer which the price recomnv nded by’ the commission has been ignored, by the Minister, and inadequate (allowance made for high costs of production and higher taxation. It (is natural that the industry, faced tc-day with conditions that would not allow a margin between the New Zealand production costs and the price at which it must sell on the; open market, should be dismayed at the prospect of the abandonment of State marketing under a guaranteed price. For the high costs producers have to thank the present Government, and so they look td the Government to compensate them. Since Mr Savage has apparently set his against securing any reduction of fixed costs by the obvious processes he can effectively meet the Glairy farmers’ genuine grievance only by fixing a guaranteed price which would ensure them a return j above that obtained by the State far their produce- -thus in effect creating a subsidised industry—or by granting them taxation relief. Either method, unfortunately, must piit an extra burden on the shoulders of the New Zealand community.