MARKET LIMITATIONS

Wanganui Chronicle, Volume 80, Issue 242, 13 October 1938, Page 16

MARKET LIMITATIONS

MOUNTING COSTS “A GRAVE WARNING” “It is with a feeling of apprehension for the future of New Zealand, and especially of its producers, that I once more issue a grave warning,” said Mr. E. M. Edkins, chairman of directors, at the annual meeting of the Farmers’ Co-operative Auctioneering Company, Limited, held at Hamilton last week. “I think it is high time the farmers of the Dominion awakened to the dangerous position into which we are drifting with the ever-mounting costs of production,” Mr. Edkins added, and continued: “This country is adopting a dangerous experimental policy, involving the raising of costs, and is taking absolutely no notice of the fact that unless other countries, producing the goods as ourselves and competing on the same markets, adopt similar methods, so surely will they undersell us. To hold those markets we shall have no alternative but to sell below cost, thus causing ruination to our producers, wholesale unemployment, and the very repercussions affecting all classes of the community that we are striving to avoid.” Mr. Edkins, according to the official report of the meeting, stressed the check imposed on rising prices by the production of substitutes such as margarine, in competition with butter, and Wollstra, in competition with wool. He also remarked that “if in the near future the enormous expenditure on armaments, which naturally creates an abnormal demand should suddenly cease, New Zealand will wake up to the fact that it is loaded with huge commitments for taxation, reduced revenue to meet it with, and high cost of living. “No Government can force purchasers overseas to pay us a price in excess of a world competitive price,” Mr. Edkins averred. “A practical demonstration is at hand in last season’s rise in shearing costs from 28s 6d to 34s per hundred. Wool, however, dropped by over £6,000,000. The Government then reduced the wages to 28s 6d. But why do this if we can insulate New Zealand from world prices? Why not keep the price of wool stable and wages up ? Who, however, is to find the huge deficit of over £6,000,000?”

He condemned the policy of an everrising price for our dairy produce beyond a world competitive level as wrong in principle. If carried to undue lengths it would surely have its repercussions. The principle of selling dairy produce through one channel was good, and should be strictly adhered to, but it should be controlled by the Dairy Board in association with the Government, who would necessarily have representation it assisting in assessing the price. This principle eliminates the possibility ot one company becoming panicky and breaking the price.