PRICE OF POPULARITY

Evening Post, Volume CXXIII, Issue 129, 2 June 1937, Page 10

PRICE OF POPULARITY

The annual report of the South Island Dairy Association states: "The market prices for both butter and cheese have advanced considerably since February, and it is quite possible that, when the total exports for the twelve months have been sold, there may be a surplus instead of a loss." If this . possibility is realised there will be relief among the general public who have been contemplating with dismay the prospect of having to carry a substantial deficit, either through inflation or taxation. The optimism of the South Island Dairy Association must, however, be accepted with reserve. It discounts a calculation made in February, but two months later (on April 7) Mr. A. J. Sinclair, in a considered statement on prices for this season and the next, said: "The difficulties of financing a scheme of this magnitude were obvious. Unless butter took a sharp upward trend for the balance of the season ? the average price would not reach 100s per cwt, London, and there was a prospect .of a deficit of about £2,000,000 on the year's operations." Since this statement was made prices have risen, but whether the market has improved in time and sufficiently to balance earlier losses cannot be said. We have not the information as to average prices and quantities marketed for a more exact calculation. Indeed the only exact information available to the public at this stage is the position of the Dairy Industry Account at the Reserve Bank and this, on May 24, showed advances outstanding of £4,873,572. The elimination of loss, however, will not solve all the problems of the guaranteed price. On the contrary it may make them more difficult of solution., The South Island Dairy Association's report states: If the indications were that ftie Government was likely to incur a heavy loss, dairy farmers would no doubt be satisfied that the guaranteed price policy was an excellent one. The association proceeds to advocate a higher price for the coming season on account of higher costs and possible market advances. ... we would suggest to the Government (the report states) that when determining the prices to be paid for the coming year, liberal allowance should be made for increased costs, and also for a substantial rise in the market value of the produce which we feel confident will eventuate. The' inference to be drawn from these statements is that farmers will not approve the guaranteed price policy unless they, get from it something more than the market return on their produce. If the' Government wishes to maintain the policy and make it popular, it must advance the price—and risk a loss. Speaking at Gisborne on Saturday Mr. Semple said that if the farmers were not satisfied with the guaranteed price they had their remedy. A poll could be taken, of the farmers of the country, and they could, if they wished, discard the system of guaranteed prices and run the risk of receiving 6d per 1b for their dairy products. "If the farmers of the country wanted to go back to the stage of gambling with their produce, the Government did not mind." But is this so? Would the Government not mind if the farmers rejected on a plebiscite one of the principal planks of the Labour Party policy? Is it not more probable that the Government would be tempted to retain the scheme and the favour of the farmers by making the scheme what the South Island Dairy Association says would satisfy the farmers— a scheme in which the Government is the loser? Again the question which we have often emphasised arises: Is this to be a true stabilised price from which the producers receive the market return on their produce, no less and no more? Or is it to be stabilisation, plus a subsidy, with no option of rejection by a poll of the public who must pay?