THE GUARANTEED PRICE

Press, Volume LXXIV, Issue 22513, 22 September 1938, Page 10

THE GUARANTEED PRICE

Discussion by Dairy

Conference

DISAPPOINTMENT

EXPRESSED

“ Purpose of Scheme

Not Achieved ”

PRESS ASSOCIATION TELEGRAM.) WELLINGTON, September 21. A conference of representatives of the principal bodies associated with the dairying industry was held today in Wellington. Those present were members of the New Zealand Dairy Board, representatives of the National Dairy Federation, the South Island Dairy Association,- and the New Zealand Farmers’ Union. The meeting was convened by the Dairy Board to consider the report of the guaranteed prices advisory committee, and the decisions reached by the Government on that report. After thoroughly traversing the report and the salient points of the evidence, the conference recorded its deep appreciation of the very thorough manner in which the investigations had been carried out, and endorsed the ' standards arrived at unanimously by the committee. The conference regarded these standards as the absolute minimum which should determine the price to be paid to dairy farmers under present conditions.

The conference expressed, its profound disappointment with the Minister for Marketing (the Hon, W. Nash) for the way in which he had arbitrarily altered the standards unanimously agreed on by the committee of experts, after an investigation extending over 25 days, and after a most thorough examination of evidence of a nature which had never previously been available. With all due respect to the Minister, the conference doubted his ability to discover, in an arbitrary manner, new standards more accurate than those recorded by the advisory committee,

"The conference is forced to the conclusion that the Minister simply made up his mind as to the price he was prepared, to pay to the industry, and then adjusted his standards accordingly,” says a statement issued by the conference. “The alteration made by him in fixing the average production a cow at 2501 b of butter-fat, in. place of the committee’s figure of 2401 b. gives an average far beyond anything which has been achieved in the Dominion. It would appear to the conference that .the unit of labour of 57501 b of butter-fat has been altered by the Minister to 6000 merely to fit in with the price which he had decided to pay, and in view of the thorough investigation canned out by the advisory committee, the conference is of opinion that he could not have had any facts before him to support his contentions. Employee’s Wages “The conference draws the attention of the industry and the Government to the fact that the basis of standards, as altered by the Minister, means that where a farmer employs hired labour, the greater proportion of the price increase will go to the employee. This is clear when the standards of the committefe are noted as follows: The standard production a cow was 2401 b of but-ter-fat; the standard unit of labour production was 57501 b of butter-fat; the allowance for capitalisation in the form of interest on land, stock, and chattels was 4i per cent, on a standard of £75 a cow, and these factors finally allowed a monetary reward to the farmer-owner of £4 10s a week, plus an allowance for house and perquisites of £ 1 10s, making a total of £6 a week, which included payment for hi§ managerial responsibilities. The suggested labour reward for an employee is £3 2s 6d a week, plus 17s 6d boarding allowance, a total of £4 a week. If the employee’s wage is increased to .£ 4, as stated, then on a basis of the Minister’s figure of 60001 b of butter-fat a unit of labour, this increase takes 1.82 d per lb of butterfat, so that if a farmer gets the proposed increase this year of 1.5 d, as stated by the Minister, he still has insufficient to pay the increased labour reward. Effect of Alteration “On a farm producing 12,0001 b of butter-fat, and worked by a farmerowner and one employee, the increase in wages to the employee would represent .9 Id per lb of butter-fat over the whole production, and if all the work were done by hired labour, the increase would again be 1.82 d per lb of butter-fat for labour alone. Already it is obvious that, with decreased production this season, and with the certainty of increased manufacturing costs as compared with last year, there is no possibility of the Minister’s estimate of an increase of 1.5 d per lb of butter-fat to the producer being realised. The conference is of opinion that 1.25 d would be a more correct estimate, with the result that a. farmer relying entirely on hired labour will net .57d per lb of butter-fat less than he received last year.

“This is an illustration of the effect of arbitrarily altering standards to fit in with preconceived ideas, without due consideration of the effects of the relationship between farmers’ costs and rewards. The Minister has frequently referred to the guaranteed price scheme as a means of securing for the dairy farmer an income commensurate with the time, energy, skill,, and experience expended by him. He has stated that the main purpose of the scheme was to solve the economic problems of the dairy farmer; but in the opinion of the conference this has not been achieved. The price which the Government has decided to pay to the dairy farmer this year is obviously based, not on the principles laid down in the Primary Products Marketing Act; but on a figure which must have been arrived at mainly on consideration of market realisations, leaving the

farmer to carry a steadily increasing burden of costs.” Those present were members of the Dairy Board, Messrs A. Moreton, W. Marshall and A. J. Sinclair (National Dairy Federation); Messrs H. H. Meredith and G. Herron (South Island Dairy Association); Mr W. W. Mulholland (president of the New Zealand Farmers’ Union); Mr C. P. Agar (who was a member of the committee which advised the Government), and Mr T. C. Brash (secretary of the Dairy Board).