PRIMARY PRODUCE AND PRICES

Bay of Plenty Beacon, Volume 12, Issue 34, 2 April 1948, Page 8

PRIMARY PRODUCE AND PRICES

Sir, —In September, 1939, the New Zealand Government declared its wartime policy of holding down prices of farm products to a strict | cost basis and instituted a system of bulk sales, import controls, subsidised prices and bestowed the title of “Stabilisation” to the whole process. In spite of this melodramatic start, industrial interest continued on their merry way and had gained much financial advantage throughout the country by December, 1942, at which date the Government asserted costs would be pegged, or provided for in prices. Already the farmers’ position was three years in arrears! For the following four and a half, years subsidies mounted as wages mounted until the cost of Stabilisation to the Nation drew close to the

rate of #20,000,000 per annum. Then the Government spoke, and ordained that subsidies must cease—not all, but most of them. As before, a clean sweep was instantly carried out as regards the ‘primary producer,’ but many consumer subsidies remained undisturbed. Farmer representatives were informed after the decision was taken officially, and subsequent discussions brought about a re-acceptance of the comparatively light, but very important subsidy on lime transport. The general position is now operating more than ever to the disadvantage of the producer. In addition to the statistically compiled subsidy figures contributed from various accounts in pounds, shillings and pence, we have producerpaid subsidies to local consumption in the form of “held down” prices for farm products to local manufacturers, consumers and the Government.

For example, fat consumers pay £25 per ton for produce valued at £l4O per ton overseas today. Tanners help themselves to whatever supplies they care to select from our first grade 'hides and skins at 10c! per lb., while the true value is in the vicinity of 22d per lb. In fact, they consume some 55 per cent of our total production at this absurdly low' figure and then com> pete with the British manufacturer, who pays the higher price for his raw material and transports it 10,000 miles overseas.

One-third of our calf skins are also swallowed up at one-third of their value. Altogether the New Zealand farmers are foregoing about £1,100,000 per annum to the local tanners and the leather trade in hides, skins and pelts at the present time. All State purchases are at stabilisation prices, even where primary produce is processed in Government owned food plants and sold to.the trade at a profit. Overseas today, profit in respect of patent foods is very great.

Acknowledgment of low food prices supplied by New Zealand, compared with world parity values charged by Britain for goods allowed in licensed return, led to the British authorities paying the New Zealand Government approximately £30,000,000 and so equalising the disparity.

Although there are several anomalies, wages rewards effective in New Zealand compare favourably with those in other parts of the world, but this cannot be said of the primary producer. The following table represents fixed English prices to March 31, 1949. Milk, 2/6 per gallon; 5/6 to 6/1b fat, New Zealand 2/- to 2/3; beef (Ist grade) 160/- cwt., 51/-; lambs 2/l|d per lb., 11-|d; pigs l/9|d per lb., 9id; eggs (spring) 4/- dozen, 2/3; wool (greasy) coarse medium 2/1, 2/-; wool (greasy) American 3/9.

(New Zealand growers always maintained their independence and producer control in the wool industry; hence the advance of New Zealand prices under open auction conditions to something approximating world parity).

The policy outlined above has held the primary industries fast throughout a cycle of high world prices. New Zealand has paid high prices, but sold at low prices, hence our trade balances are only a fraction of what they could have been! Indeed had England been prepared —or permitted—to send us all the goods we have needed as a people and a Nation during the last three years, New Zealand today would be heavily in debt to the Motherland. This is fair neither to Britain nor ourselves. Yours etc., PRODUCER.