MARKETING COSTS

Te Aroha News, Volume XLI, Issue 6407, 27 October 1923, Page 2

MARKETING COSTS

CRUSHING EFFECT ON INDUSTRY HOW FARMERS ARE FLEECED f —: ' High marketing costs are having a crushing influence upon primar incrushing influence upon, primary inproduction is likely to have the important effect of bringing more profit to those engaged in handling the goods, but it is unlikely that the producer or the consumer will benefit in any way. The figures quoted in a letter to a southern contemporary by a farmer who claims that he has carefully tabulated his receipts and expenditure show that 45 per cent, of the gross value of his produce was absorbed in marketing costs. It is easy to see how the increase of primary production will contribute to the wealth of the country, but under present conditions the man who produces the goods will not be a participant in this wealth. All primary producers have had the same unfortunate experience, more or less, but still the wheels of trade go round. Apparently it matters little if the producer gets no returns from his goods;

the mere, fact that he does produce finds employment for labourers, freight for railways and shipping, commission for distributors, and profit for retailers. Truly the primary producer is the backbone of the country, but one wonders for how long he will be content to carry all the burden. The problem of marketing produce must be solved before real progress can be made. Land settlement and the further increase in production will be of no advantage to the country if the work of production becomes unprofitable. The plea for assistance has been so often successful'that' the producer naturally

.urns again to the Government when

in difficulty. A careful analysis of the effects of Government help will show that it is at the bottom of the trouble and the main cause of the producer’s plight. Without quoting individual instances in New Zealand—for the law of libel has to be observed—we may just remark that the establishment of the Commonwealth shipping line enabled Australian produce' to be marketed during the war. Its continuance has, without a doubt, been a heavy burden on the community. The Commonwealth line is at the mercy of the Australian Seamen’s Union, while the Navigation Act and the port dues have made the Australian trade unprofitable to rival lines. Hence freights are increased. Advocates of Government interference in'the control of primary products can make comparisons themselves between the two countries. Assistance in any industry raises the general burden to the taxpayer, prices of commodities are increased, wages automatically rise, and costs are piled higher and higher. These can all be passed on until the unfortunate producer at the end of the line is reached. Co-operative effort on the part of the producer would appear to offer the only satisfactory solution of marketing. Quite a number of farmers’ co-operative ventures in practically all parts of the Dominion, ; have in the past not proved largely because the shareholders have m.-thadthe business acumen to direct huge operations successfully themselves and they would not pay enough I to secure the services #f a good man to run the business for them. Many of the co-operative dairy factories failed for this reason, failure being helped by the disloyalty of shareholders sending their, supplies to rival firms which offered a slightly better, price. The meat freezing- and bacon curing enterprises have, similarly, been embarrased for much the same reason. Some of the concerns that have managed to weather the storm offer compulsion as the panacea for all the ailments of this, nature, but is it any wonder that many farmers are sceptical as to the promised results? Further, Government assistance usually means Government interest, and past experiences have proved this is costly to all. concerned.