FARM SUBSIDIES

Evening Post, Volume CXL, Issue 19, 23 July 1945, Page 7

FARM SUBSIDIES

PAID BY PRODUCERS

BOARDS' EXPLANATION

"Because of the methods of payment io the primary producers which have been jn force under stabilisation policy, and because some of these payments are referred to as 'subsidies,' there is an idea in the minds of many of the public that primary producers are receiving substantial subsidies from the Consolidated Fund or War Expenses Account; but this is not true," says a statement issued by the Meat Board and the Dairy Board.

"The New Zealand Government," says the statement, "receives from the British Government 'lump sum payments' in addition to the actual prices paid for produce. These comprise a lump sum payment of £12,000,000 and annual lump sum payments of £4,000,000 for four years, a total of £23,000,000. A committee fully representative of the primary producers i which has had access to all documents j •connected with these payments, has agreed that the primary producers have no direct claim on these lump sums, which are being paid by the United Kingdom 'in recognition of the benefits received from the price stabilisation policy,' and are direct payments for stabilisation subsidies of a general nature. What the public fail to realise is that under the stabilisation procedure, the producers do not receive any of the lump sum payments -nor the whole of the money that is paid for their produce (apart from-these lump, sums), and that the so-called 'subsidies' paid to- the producer come from the money received for their produce, or in other words, from the producers' own pockets. "The producers do not actually receive annually as payment for their produce the whole of the purchase price paid by the United Kingdom - for the exported produce; part is paid into stabilisation and other accounts on their behalf. GENERAL SUBSIDIES. "Apart, however, from certain socalled 'subsidies,' which are actually paid to producers as a means of holding down their costs of production, there are the general subsidies for all sorts of purposes, such, for instance, as keeping down the price of sugar, coal, eggs, fruit, clothes, and services, all part of our general stabilisation policy. The general stabilisation subsidies come out of the lump sum payments, and to the extent that they do not/exceed £4,000,000 yearly may be fairly said to have come from the primary production of the country as a whole. The primary producers' representatives believe that this method of working by means of a stabilising policy is sound for the country as a whole, despite the sacrifices it entails on their own part. It has already been shown that the farmer, from his own produce, pays the 'subsidies' he receives under stabilisation. .No other business in New Zealand carries its own subsidies in this way. So far as all the other many -'general' subsidies are concerned, it is only when they exceed £4,000.000 yearly that they come from the War Expenses Account or the Consolidated Fund. Up to that stage they really come out of the country's primary production. J "The public should clearly understand that the primary producers, in receiving these payments, are not being 'subsidised' by the community, but that whatever so-called 'subsidies' they receive actually come out of their own pockets, from money received for produce," adds the statement. "Their representatives have taken a broad national viewpoint on the whole question, have agreed that they have no! direct claim to the lump sum payments, and that it is better to face up to a temporary wartime situation by a policy of stabilisation than to have an uncontrolled spiral of rising costs. They are disappointed that stabilisation was not implemented earlier, and that it was not applied rigorously and effectively to all sections, and are particularly . disappointed at the recent break jn the policy, which they think willJafTeet them -detrimentally."