THE OTAGO DAILY TIMES THURSDAY, November 2, 1939. A PROBLEM OF PLENTY

Otago Daily Times, Issue 23955, 2 November 1939, Page 6

THE OTAGO DAILY TIMES THURSDAY, November 2, 1939. A PROBLEM OF PLENTY

Paradoxical as it may seem, the problem of plenty can be no less vexing than the problem of scarcity. Experience is demonstrating that fact to the fruitgrowers of the Dominion in the present season. Due to factors which are bound up with the economics of production and of distribution, a too-bounteous crop is threatening growers of apples and pears with the gravest embarrassments. In a season of shortage, provided the ordinary channels of distribution remain open, the market is capable of adjusting itself to the conditions it has to meet. A price regulated by consumer-demand, in such circumstances, may be sufficient to compensate producers for a crop yield that has failed to measure up to normal standards. A yield above normal, on the other hand, may hold for them no promise of so satisfactory an outcome. Production costs are more or less fixed; as the trend seems to be in these difficult times, what variation is noticeable is in an upward direction. It follows that the problem of marketing is complicated when nature offers her fruits too lavishly. The consumer would prefer, obviously, that the advantages of over-supply should accrue to him, while the producer’s task is to ensure that control shall establish his right to a price that will not only cover his costs but also provide him with a reasonable margin of profit. On these lines the fruit-growers have a problem to resolve as between themselves and the Government as a potential marketing agent, or between themselves and the consumermarket through their own agents. That problem is proving discouragingly difficult of solution. Immediate prospects are for an all-over yield of some 3,500,000 cases of apples and pears. In normal times anything up to 1,500,000 cases might be sold on the export market. But these are not normal times. The war has virtually closed the outlets of overseas trade. The Imperial Government has notified the Dominion Government that it does not propose to buy any fruit, and the expectation is that available shipping space will be taxed to the limit in the transportation of meat, dairy produce, wool and other essential war purchases. If that is so there will be no space available for the shipment of fruit to markets in Europe, South America or the Far East, and there is small likelihood that those markets would be accessible in any case in present conditions. The position, then, is that whereas 2,000,000 cases—the full crop minus the ordinary export quantity—would be more than sufficient to meet domestic requirements, the entire 3,500,000 cases may be left for local disposal, and that is an economic impossibility. The orchardists as a body are disinclined to band their industry over to the Government under a system of price guarantee which they do not feel would operate to their advantage, although the Government has indicated that a request for the extension of the guaranteed price system to cover fruit would be well received by it. Similarly they are not impressed by Mr Nash’s offer to take over, at a fixed price, approximately onethird of the crop, nominally for export, and leave the remainder for the growers to market themselves locally on the best terms obtainable. The view of Otago growers, as expressed at last week’s meeting at Roxburgh, was that they should be permitted to dispose of their own fruit on the local market, that sales should be confined to three grades only, and that the Government should take over an export quota as suggested by Mr Nash. This would presumably mean the limitation of the harvested crop to superior grades, which proposal would seem to clash with the Minister’s refusal to see any portion of the crop wasted or destroyed. Mr Nash has said that the producer is entitled to payment for his work, and that it is the wish of the Gov-

eminent to assist him. Clearly it cannot hope to assist him adequately without involving the country in a loss on marketing—a loss which would have to be added to that of £1,750,000 already written up against the taxpayers in respect of dairy produce. And it is equally clear that the growers, for whom loss on the season’s operations seems certain, would welcome some form of State co-operation which would ensure the economic stability of their industry. Whether that result can be attained within the framework of the Minister’s offer, which appears to be his best offer, is apparently for the industry itself to decide.