The Gisborne Herald. WITH WHICH IS INCORPORATED “THE TIMES.” GISBORNE, SATURDAY, OCT. 28, 1939. PRODUCE COMMANDEER

Gisborne Herald, Volume LXVI, Issue 20080, 28 October 1939, Page 4

The Gisborne Herald. WITH WHICH IS INCORPORATED “THE TIMES.” GISBORNE, SATURDAY, OCT. 28, 1939. PRODUCE COMMANDEER

The position in regard to the sale of New Zealand primary produce to the British Government has been considerably clarified as a result of the scries of broadcast talks given by Mr. Nash. Subject to any revision of opinion that might be necessary when final details are disclosed it would seem clear that the prices to be paid

j by Great Britain would be satisfactory if internal conditions in New Zealand j had been normal. To the extent that j they may prove unsatisfactory, in- ; ternal conditions and not the price in sterling will be to blame. It is irn- | portant that it should be recognised that the prices offered by the Home Government cannot be expected to be based on any circumstances which might be peculiar to the Dominion. The basis adopted has been that of market quotations in Britain in recent years. Obviously, Britain could not give preferential treatment to one supplying country as against another, ! and this means that the returns to the ! New Zealand producers must bear a | relationship to those in other counI tries and cannot possibly make full I recognition of the higher production i costs in the Dominion. In other | words, the war-time commandeer i serves to emphasise the fact that the ! whole economy of New Zealand must j be based on the prices received for S exported produce; the theory of "in- ] sulation” goes by the board.

i The price to be paid for New Zea- ! land meat under the agreement with

j the British Government is based on prices ruling in England during the calendar year 1938, which will mean a somewhat higher return than that received during the last production year. ! The detailed figures announced by Mr. I Nash will give farmers a rough idea I of what they may expect to obtain, j These figures, however, are subject to a deduction to meet the cost of placing the meat f.0.b., but to an addition representing the value of by-products. The net result will probably be a figure slightly below that quoted by ! the Minister. These prices, together j with the return of 12]d for wool | mean that the sheepfarmer, although 1 not by any means placed in a position

of affluence, will be slightly better off

than last year, provided always that it is possible to prevent costs rising above last year’s level. Insofar as wool is concerned, however, it has not yet been announced who will bear the costs to f.o.b. The inference from the earlier statement was that this charge would not be levied against the grower, but now there seems to be some doubt about the position, more particularly since it has been made clear, and even emphasised by Mr. Nash, that the costs on meat from farm to shipboard will have to be met by the producer. Until this point is clarified the position of the sheepfarmer will still remain in somedoubt.

It is apparent that greater difficulties have been experienced in fixing the price to be paid for butter. -In the past, a somewhat half-hearted attempt has been made to “insulate” the dairy farmer against overseas price fluctuations. The result last year was that he was paid a substantial bonus at the expense of the rest of the community. This year it has been sought to recoup this bonus from the British Government, but it is obvious that Britain cannot pay a special premium to New Zealand on account of its guaranteed price scheme without giving similar treatment to other supplying countries. The difference, apparently is not great, since Mr. Nash intimated last night that 136 s f.o.b. had been agreed to in the case of Queensland butter, whereas the New Zealand guaranteed price is equivalent to 139 s f.o.b. This difference would be reduced by the premium normally secured for New Zealand butter, but, small though it is, it directs attention to the problem confronting the Government. If the price to be paid by Britain is not increased. will the Government be justified iir paying the dairy farmer a pre-

mium at ttic expense nl the rest of the community, which, of course, includes other farmers? Previously there was

the excuse that dairy produce alone had been taken over by ttie Government, but now that all produce has been commandeered it would be manifestly unfair to subsidise one section of the farmers and not others. Paradoxically enough, it lias taken | the war-time commandeer to demonstrate the fallacy of the guaranteed price system. Under the complete

commandeer, better prices will be received for meat and wool but, in the absence of a subsidy, lower prices for dairy produce; yet according to the | Government’s own tribunal the existj ing price for butter is too low to-give | the farmer a reasonable return. The ; point which is most emphasised by this position is that New Zealand’s I economy must be based on the prices

received overseas for its primary produce, and this, in turn, demonstrates the imperative need for a cost structure that more closely conforms to world prices. The same point was emphasised infercntially by Mr. Nash when he appealed—with a confidence that will hardly be shared by the farming community—-for greater production. Since the dairy farmer, again according to Mr. Nash's own tribunal, is already not receiving a reward commensurate with his efforts, how can he be expected to produce more unless his costs are reduced?

And what applies to the dairy farmer, applies also to other branches of the primary industry. The first requirement, therefore, is that New Zealand should determine to bring its costs to a level that will permit of profitable production. If that is done, and if Mr. Nash will give an assurance that the commandeer is a war-time measure only, and not for all time, (hen he can safely leave the rest in the hands of the farmers themselves.