The Press SATURDAY, JUNE 29, 1946. Costs

Press, Volume LXXXII, Issue 24914, 29 June 1946, Page 6

The Press SATURDAY, JUNE 29, 1946. Costs

The doctrine that Mr F. P. Walsh preached to the National Dairy Association, in the address reported yesterday, was a wholesome one, and not less wholesome because it raised a question of critical importance without supplying an answer. Mr Walsh concentrated on the problems of costs, emphasising several different but connected considerations. For instance, it is essential to New Zealand’s interests as an exporter of primary produce to keep costs under control; and if this was always true, it is specially true to-day, when Britain’s position as an importer has been badly impaired and British agricultural policy will undoubtedly turn with it. The present intention is to develop production and nutritional policy along lines which broadly favour open and expanding markets for New r Zealand’s primary produce; but if butter, cheese, and meat are too dear, Britain may be forced to limit imports and pursue the agricultural policy that war made expedient, accepting all its peace-time disadvantages. These would extend to New Zealand in more respects than one: such a policy, for instance, would hot merely limit the British market but would be sure to raise the price of British exports. For this reason, though not for this reason only, Mr Walsh rightly warned farmers against the temptation to measure New Zealand prices against oversea prices and to see in their higher levels—when they are higher—sufficient cause to let New Zealand parity swing with world parity. Any argument that urges the New Zealand producer to let New Zealand price levels turn up, in the faith that there will be no reaction to grind him against his higher costs, is a dangerous one. Again, Mr Walsh was equally sound when he said that lower costs and higher ■efficiency promised farmer and farm, hand a better standard of living, shared with the rest of the community. It is a promise which is not likely to be fulfilled on any other condition. All this, it may be repeated, is thoroughly wholesome doctrine. But it raises the question, of course, of what is being done to keep costs down and to raise standards of productivity The farmer, who has asked this question anxiously for a long time, cannot be satisfied by reference to stabilisation policy, though it has worked and is still working, or to price control, which admittedly works in some respects to put a premium on inefficiency, or to subsidies, which, whether they are paid from the pools or the taxpayer’s pocket, do not lower costs but merely spread and conceal their incidence What the farmer sees is the steady advance of real costs against him, a process to which he sees no end and against which he sees no effective counter-measures being prepared. He does not want wages to be lowered, social services to be cut, or any otHer purely deflationary device to be applied; but he does want, and need, to buy goods and services on more economical terms. Until he can, it is not much use preaching lower costs to him. He has a right to think that somebody else needs the instruction as much or more. To give Mr Walsh his due, he has preached to other audiences, courageously and well. He must make a convert of the Government.