SHEEP FARMERS’ FUTURE

Southland Times, Issue 23793, 15 April 1939, Page 18

SHEEP FARMERS’ FUTURE

Guaranteed Prices For Pastoralists ?

MOVE TO APPLY POLICY PROSPECTS OF SCHEME DISCUSSED (SPECIALLY WRITTEN FOR THE SOUTHLAND TIMES) By S.A.H. The Prime Minister (the Rt. Hon. M. J. Savage) has made a direct offer to apply the guaranteed price policy to the pastoral industry. This was conveyed to farmers at the big rally at Timaru on April 5.

Whether or not that offer is accepted will depend upon the desire or otherwise of sheep farmers. The Government has clearly laid down that the principle will be applied to their industry, only when those engaged therein definitely ask for it. To that extent are farmers free to make their choice. But—and a big “but” this is—those same farmers are not free from economic causes that may very largely, if not overwhelmingly, influence their choice. And those economic influences are predominantly controlled today by the Government itself. Farmers of the most sturdy independent character may well feel themselves weakening in face of the net of economics being drawn upon them. When told he may have the guaranteed price, subject to his own choice, such a farmer may well recall the story of the negro labourer. This character told his mates that he worked from choice. In surprise they demanded if he had independent means. His reply was, “Oh, no! But its work or starve and I choose work.

AT WHAT PRICE?

Considerable as will be the influence of principle in determining the sheep farmers’ attitude, the matter of prices will be all as powerful, if not an even more powerful factor therein. Bluntly stated, were the Government to bid high enough, it would surely secure approval of the proposal to apply the guaranteed price policy to the sheep industry. But that bid would need to be really high, and the commitment contained therein would cause the Minister of Finance (the Hon. W. Nash) /'many sleepless nights. Mr Nash has already shown, in the case of the dairy industry, that he will not risk too much. And his last decision was made with an election imminent.

In any proposition now made there must be expected a stiffening in the Treasury’s attitude. Some farmers who have inclined towards guarantees for some time see rosy prospects. As high as 13d per lb for average crossbred wool is one such expectation. None see below 12d per lb, and 12£d is quite general. But as yet little consideration appears to have been given to meats, and these exceed wool in importance.

Forecasts made have been based on the dairy industry. As originally conceived this meant a 10-season average up to and including 1935-36. But when the average was made up officially, there was “a catch in it." The weighted average was used; this lowered the sum given quite to a degree. Then with two seasons’ working results available, the original principle was discarded altogether and this season’s dairy produce guarantee became a straight-out commandeer. And in announcing this season’s prices, the Minister of Finance plainly and unashamedly admitted, they were determined in a big degree by prospective export prices. In other words, they would be about London market returns.

In the light of all this definite recent experience, is there any formula available wherefrom sheep farmers could calculate just what they would receive? COMPLICATED ASSESSMENT In the words of a very prominent dairy executive, “The marketing plan for butter and cheese was handed to the Government on a silver tray all ready to serve.” The Prime Minister some two years ago gave indirect acknowledgement of this when asked did the Government intend to take over meat and wool in the same way. His reply may be boiled down to—he was not looking for complicated problems—just for the sake of handling them. A wise remark. Dairy produce is very simple to market. Contrast wool, half a hundred classes and types, marketed worldwide. And there is no such practical, simple grading of wool as in butter. That which is the highest class of wool today may not be so next season in price. Any arbitrary assessment would lead to endless and acrimonious discussion. A problem appearing comparatively simple in theory is found to be inextricably complicated when the endeavour is made to apply it in practice. And be it realized this is so for the State as well as for the producer. If there are deficits, these must be met inevitably, whether by inflation or added taxes. If prices are too low, the industry’s, hence the national production and income, will decline. And if prices are too generous on any particular class of product, then will that tend to be produced in excess and may be to the extent of a glut. TO WHAT AVAIL For many months past there have been underground stirrings towards guaranteed prices for pastoral production. The movement has found support from three quite distinct groups. First, from an extremely minute body of genuine believers in the guaranteed price policy. Second, from another small body of those irreconcilably opposed to the whole principle. These sought to see the sheep industry brought in, so as to show up the policy for the fraud they 'consider it to be and to bring in all exporting production and thus crash the policy under its own weight. Third, by far the most potent body of opinion, was animated by neither faith nor political animus. This felt that “the sheep farmer might as well get in for his ‘cut’ of whatever was available.” Shelter was sought from the blast of rising costs. A practical instinctive attitude. Should the pastoral industry go under the guaranteed price policy, it will be this instinct which will carry it there.

On the short view there may be some gain. But on tile long view none can possibly accrue. For when all are in, none will be carrying another.

And in years to come this policy will assuredly go the way of all others such —to extinction. And with its inevitable passing must come difficult times of readjustment. The supreme problem facing the sheep pastoral industry is to see costs held and lowered. All else is but husk, for there lies the kernel. Guaranteed prices offer no useful substitute therefore.