COMPENSATED PRICE.

Ashburton Guardian, Volume 57, Issue 246, 29 July 1937, Page 6

COMPENSATED PRICE.

CRITICISM OF SUGGESTION.

SHEEPOWNERS’ POINT OF VIEW

(Per Press Association,)

WELLINGTON, July 28

“The suggestion is being maue tnat as costs oi production witfiin iNew Zealand increase, so tne price to tne exporting dairy tanner snail also be increased, the object being to ©stablisfi security of prolit to tlie particular group of producers for export,” said iiir tl. D. Aoiand (president of the iNew Zealand Sfieepowners’ and Farmers’ Federation) at tne annual meeting to-day. i “This objective will, I am afraid, be unattainable as a continuing policy, witnout undue hardship on those sections of production, whose product would be required to make up the dineience between profit and. loss to tne individual section of farmers guaranteed security oi profit by tins metfiod.

“The natural result of any attempt to give a preferential treatment to any section of industry would he demands by other sections for similar treatment, and when our national bal-ance-sheet is drawn up it would be xound that the position of the Dominion as a whole would be that we had been following a circle, chasing rising internal costs with an increasing subsidy required within New Zealand on our surplus production for export. “The term compensated price must carry with it the necessity for a full investigation of all the factors contributing to the rise in internal costs oi production for export, and would mean an exhaustive inquiry into almost every section of industry in the Dominion, if the costs imposed on the production of the particular product lor export was to be fairly allowed for. “Demoralising! Effect.” “The demoralising effect on industry generally, and the very grave difficulties which would arise in almost every branch, will be appreciated. “Ultimately, the adoption of such a principle as that suggested in the term compensated v price, if applied to all exports and to production for domestic consumption, would mean a regimentation of the whole of industry within the Dominion, on a totalitarian basis, which is not practicable in a country like New Zealand, depending, as it does, on overseas trade.

“I feel convinced that any undertaking by the Government to guarantee to any section of export producers security of a return for its product, higher than that which is justified by the price received on its world market, is not possible, without injustice being inflicted on some other form of production from which a direct subsidy might be taken, or on the general taxpayer in New Zealand, who would be required to foot the bill in the interests of the particular product receiving the subsidy. “There is also a very grave danger that the British farmer might deeply resent any suggestion of a substantial surplus product being dumped on the British market.

“To my mind, a more equitable approach would be to reduce the costs of production by way of reduced charges, interest, land values, taxation, etc., to the point justified by the average return for the particular product over a reasonable period of years.”