WORLD PARITY PRICES

Chronicle (Levin), 20 July 1948, Page 6

WORLD PARITY PRICES

Or Reduce Internal Costs, Say Farmers "I am of the opinion that the system of selling oui1 produce to Gr'eat Britain at a lowfer iigure .than world parity is wrong, " said- Mr. p. C. Jurgeng, provinclal president, Wellington Centa-al provincial executivej 'Pederated Farmers, -when discussing-the reported- new agreement • for butter at. yesterday's meeting of the execntive in Marton. "During the late war we did not feel justified in askihg Great'" Britain for world parity prices and the contribution made to Great Britain in this respect was made by primary producers I feel that we should sell our produce at world pa?ity( prices and any assistance required to.be given to Great Britain should be made by the wkile community. We have made one contribution of £10,00u,000 whicli, in effect, was made by the producers. The question is* whether primary producers can go on making tdiese eontributions? I do not think so. Riglit throughout the war years we have been unable to obtaiu the materials and labour neccssary to carry out repairs and maintenance and no industry can c'ontinue ehiciently unless it is in a position to see that repairs and essential maintenance as well as improvemenis are attended to. " Mr. Jurgens went ou to suggest that the combined efl'ect of accepting lower prices than world parity for our produce and rising internal costs was tending to retard xjroduction leaving a .not retuni to the producer suflfieient to nieet incoum tax only. Actually^ he decJared, the position today with man)" producers, if they cared to examine tbe position, was that they were paying income tax out of capital. It may be argued that provision was made to enable farmers to set aside a sum for deferred maintenance to meet the circumstances but that was two years ago. Assuming a fanner placed £200 aside and required to use that sum today to do the jobs he reekoned on doing two years ago, he wouid lind- that it would cost hiin double. Ilow far Would the i sums set aside go'? It was his opinion ; tluit tlie average farm of 500 acres 'would have to have some £1500 to overtake mai.ntenance aud iniprovenieuts and this assessment of the present day position suggested to him that thc industry was not 0n a'sound basis. Be might he alone in that opinion, neverless, his conclusions were based on a [ study of the trends. i The .farmers cost basis prices were I the average for New Zealand, namely, | 1942 'prices plus ttSCOrtained costs since, I that date. That fooked.quite sound. but I tiro costs of a unit 'of' production on first ! cla'ss land' were not n'earU1 so high as oh I seeond class land- and it was his view ' that the ineroasing costs of working seeond class land -would liavc the efl'ect I of wipiug out the capital Cost of that land. The trend 'bf the economic setup foreshadowed 'the time when the seeond class land:%oiild- be worth nothing and the fit'st cliiss land worth. double. At'ter veco'diiting his expetiences in farming liill countr.v in the Taihape district Mr. Jurgens coiitCnded that everv ri.se in farm costs dcpreeiates the value of t*he hill oountry. He rcferred to thc higher cost of fei'tiliser to ■ the. liill country fanner- 'and "illustrated the

point of lughcr costs. Oue bag of super to- each acre on each class of land would inean on the first class land a benefit to four ewes vvhile on the hill country wherc it cost , inore to transl»ort and spread, it wouid beuefit only two ewes. 11 e was of the opinion that the rcal facts should be knovvn to the public and farmers should light for their rights because after all New Zealand 's econoxny rested on primary pro.duction. The shor.tage of materials was referred to by Mr. L. Laiubert who stated that at a reccn-t clearing sale at Raetihi secondhand wire sold at £150 per tou. Some deep thinking was ealled for, suggested Mr. D. G. Gordon who mentioned the suggestion that producers' pool funds should be invested in London. That would have been excellent had it been attended to at' the start of the pools. It now appeared that the Government had invested the funds in its Mtate Housing scheme, so that when the time came for the need oi these funds, more inflation would resiiJt. He did not pretend to lcnow the solution but he agreod that something would have to be done towards cone pensating the farmer producing at the highest cost otherwise he would go out of production. "If we ask for full world parity I think we would be going ou a sectional basis whick in time might wrcck the Empire. I do think Great Britain is living on her capital for her existence and it seems to .me that tbe Dominions and Britain should beeomc oue unit with no trade barriers. Mr. Jurgens said that it-was his dosire to continue to help Britain but ovefyonc should contribute and not merely the farmers. Air. H. A. fcjtewart considered that ,the chief source of the trouble was New Zealand. "If we could get back to pre-war taxation, no 40-liour week and no , working on the principle of more pay for less work, we could do with l,ess for . our produce from Britafji. We should press. • for reduced costs in New ZeaJjamd. ' ' . He went on to refer to the evidence before the Hill Country Commission that fencing- today cost £100 per mile while concrete fencing posts were being quoted at £G0 per 100. Mr. Jurgens said that it was either a' matter-of bringing about an adjustment in our internal economy or farmers. demanding world parity for their produce. He criticised the Goverunifent for the present state of affairs, suggesting that its policy amounted to tleeci'ng the primary producer and allowing the rcst of the community to be lieve' that the farmer could aWord it. Answeriug a suggestion that it was the Government 's plan to nationalise .the land, Mr. Jurgens said that under the present clrcumstances that was not neccssary. Tbe verv basis of prices plus costs procfuces the situation thal the Goveniment has very efficient managers (Ihe farmers) who think they own the land, but are in realitv scrving t In* principies of Socialism, so the Government has no need to nationalise the land. After further discussion the following niotion was carried: That if the primnrv industry of New Zealand is to be maintained on an economically sound basis all internal costs must be reduced, or, alteruatively, farmers must be paid full world parity prices for their produce and.il' New Zealand is to continue to assist Great Britain, sueh assistance should be contributed bv the whole community and not one aection of the people."