Guaranteed Price

Poverty Bay Herald, Volume LXIV, Issue 19423, 7 September 1937, Page 11

Guaranteed Price

Sir, —Adam Smith, in his “Wealth of Nations,” wrote: “Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer.” It is difficult to see how this teaching is followed by our present Government. We are to pay a penny a pound more for the butter we eat locally and, as well, contribute in extra taxation for a bonus on butter exported. How can our politicians square' this with the teaching of the economist?—Yours, etc., CONSUMER. Sir, —In your leading article of September 2 you state, inter alia: “The farmer is now clamouring for an increase in the subsidy, but by what process of reasoning can he establish his claim?” When the price was fixed for last season at 12 9-16 d per lb., this was stated by Mr. Nash to be the avei’age over the last 10 years, or rather a ‘generous’ interpretation of the average. However, Mr. Nash’s idea of generosity did not measure up to those of leaders of the dairy industry who had estimated that the price would be approximately Id higher. Probably nobody would have complained had wages and costs been based on the same process of reasoning as prices. These, however, were raised to unprecedented heights by Government legislation. Mr. Nash then stated that any increase in costs would be met by an adjustment in the price for next season. Increased costs have been worked out independently by two farmers’ organisations, and the results arrived at were both approximately ,‘ijd per lb of butterfat. Mr. Nash, accepting neither advice nor demands from farmers-**-only industrial unions have these privileges—set the price at 13,id, or approximately ;Jd per lb. of butter fat higher than last season. The original price of 12 9-lGd was said to be such that the average efficient farmer could maintain himself and his wife and family in a reasonable standard of comfort. If we accept this as a fact, then with costs increased 31d and prices increased only 3d, the average efficient farmer is going to have a very lean time, and even the ultra efficient farmer will be hard put to maintain his reasonable standard of comfort. Again, Mr. Nash stated in his broadcast that the average pay-out for butter factories last season was 13.52 d per lb. butterfat. Now the Toiaga Co-operative Dairy Company, of which I am a supplier, was only able to pay 13d. Many factories must be below this figure, as Toiaga, though small, is economically and efficiently run, and last season’s average grading figures of 94.055 for butter was the highest on the whole of the East Coast from Wairoa to East Cape. Tlius there must be many hundreds of farmers throughout New Zealand who, through no fault of their own, have received much less than the payout quoted by Mr. Nash, but are still expected to pay the full wages and costs imposed by the Government. I trust that I have been able to show a few causes for the “clamouring” of the farmers. It seems obvious that the Government is keeping the farmers’ nose at the grindstone in, order to provide good wages and conditions for other sections of the community .—Yours, etc., EFFICIENT FARMER.