STABILISE OR SUBSIDISE

Evening Post, Volume CXXIII, Issue 124, 27 May 1937, Page 8

STABILISE OR SUBSIDISE

"We Farmers' Unions have always contended that control should be in the hands of the producers and not the' Government," said the Dominion president1 of the Farmers' Union at Dannevirke yesterday. fie added; "It is impossible for the Minister to be in control without being subjected to political influence, and that is one of the greatest weaknesses of the present system, and I fear it will prevent it getting a fair run." We can agree with Mr. Mulholland upon the risk of political pressure inseparable from Government control of a marketing scheme. From the beginning

we have said that it would be impossible to separate the political effects ft guaranteed price fixation from the economic, even though there is an elaborate but vague formula for price calculation. But if Ministerial control is to be abolished in favour of farmer control, the Government guarantee must also be eliminated. The community, repre-, sented by ■ the Government, cannot accept the responsibility of giving a price guarantee if control is completely in the hands of the producers. It would be different if the scheme were, as Mr. Mulholland suggested, one of "established," not "guaranteed" prices, and if it were really confined to preventing price fluctuations. But this cannot be so while the condition, clearly affirmed by the Governjment, remains, that the losses will be met by the Government and the profits will be used for the fanners. A scheme of price stabilisation which ! would give the farmers no more and no less than the market return would be quite different from a scheme operated under this condition. Mr. Mulholland said that there was no intention by the Government that the measure be inflationary. Perhaps not, but Mr. Nash himself admitted the possibility of inflation, and we cannot see how it can be excluded unless the scheme is true stabilisation. At present it is stabilising with the probability of subsidising.