Compensated Price

Hawke's Bay Herald-Tribune, Issue 93, 6 May 1937, Page 9

Compensated Price

FARMERS OPPOSED Considered Economically Unsound WELLINGTON DECISION ■ "Generally speaking the farmer to* day finds himself in a world that 1* moving so rapidly that he is scarcely able to keep pace with the changes ' that ao vitally affect him, ' ' said Mt, Lloyd Hammond (president) at ihe annual meeting of the Wellington Central Provincial Executive of the INew Zealand Farmers ' Union, held at Marton, on Tuesday. "In faet," he continued, *'one might state with every degree of eonfidence that many farmers are even to-day unaware of the economic changes that must, as time goes on, have a marked bearing on their individual lives. "The Farmers' Union, to which we belong, and which every farmer shouid now join, was originally formed'to protect the xnan on the land at all times and irrespective of party government. The greater the changes proposed in his economic life the more necessary and vital it becomes that his union shouid be alive to these changes. More essential than anything does it become that every farmer shouid belong to his own union. Numerical strength was never more essential than it is to-day i£ the farmer still wishes to retain his individuality and his freedom in a new world of collective security. We have the spectacle of large and powerful units on every hand and in all walks of life brought into being to protect particular interests. One may envy them, cer* tainly not blame them, for their efforts on behalf of collective security.' They have realised, as we must, that without numerical strength individual physical •effort is of little practical value. What . .about it Mr. Farmer? We want your; knowledge within our ranks, your assisitance, and above all your moral supiport. You may double your production as you have done in the last few years, but your nnion may perhaps do more for you in one day by nnited effort than you are able to do for yottrself in a lif efcime.

"The dairy farmer may consider that because his produce is commandeered and he has a guaranteed price, that he .has nothing to fear; the sheep farmer because his immediate prices are remunerative, that all is well with him. Does the latter realise that, at the moment, he becomes guarantor to the for* mer, and that in reality the prosperity of all classes of farming is economically bound up in the future prosperity of all sections of the community, including himself? "^our union has always maintained and repeatedly said so that the soundest course for this country to take is to . reduce costs to a degree reasonably commensurate with our income received from overseas. However, we realise that in the present circumstances a different line is being taken and for thi's reason alone, if for no other, it is ■ essential that all farmers unite, if they expect to obtain their fair share of the rewards of their labours. Differences of opinion it is essential to have, but consolidation of policy is more necessary. Individualist as the farmer is, he views trith alarm the gradual elimination of individual effort in favour of State enterprise. As an' individual- farmer he has doubled his annual production in the last ten years. It is problematical whether he would be prepared to do the same again under absolute State control, bnt if he is ultimately driven to accept snch a state by virtue nf nrnrlnM nriiim ttnH lAarino

costs, then let the price for his present freedom be a compensating price and not a so-called guaranteed price. While we still maintain that the wiser course to pursue would be to reduce costs, we also recognise the utter hopelessness of such a course. "Can it be suggested with any degree of seriousness that* the wage-earner shouid be asked to take less, the manufacturer to carry on without tariff protection, and the retailer shouid reduce. his profits? I think not, because they all enjoy a compensating price, and even if the Government of the day demanded a reduction (which they do not), not one section of the community would agree to forego that which they consider to be their just reward. The farmer asks for just that. The sheep farmer is probably getting it to-day, but no more, in spite of his good prices; the dairy farmer, definitely, is not. The fact that there are more women and children in the milking sheds to-day than ever before speaks for itself. Fellow farmers, it is np to you. Your successful future rests with yourselves and may be stressed in one word — unite. "Farmers," he continiied, "are not o generally alive to the extreme serious- " ness of the position to-day. This union is not concerned with party politics but is vitally concerned with our industry. E cannot help thinking that we are becoming hedged in with so many rules and restrictions nntil we do not know where we are. Farmers of the past have always been individualists and regarded their freedom before everything else, but unless you are prepared to do the one thing which I suggest, and that is, to get into the union, I cannot see any hope of the farmer getting that which is his just due. The Government of the day has said that it looked to the nnion as the organisation rOpresenting the farmers. We have about 20,000 members out of a possible total of 60,000. That is not enough. Other interests know exactly where we stand and in fact know better than we do ourselves and so long as there is an- absence of complete unity we will continue to be the shuttlecock of those interests. It is unfortunate that I have to make such remarks to you gentlemen who do take an active interest in the union but it is the only way to reach those who continue to sit on the " fence. (Hear hear.) You are well aware of the position existing to-day but I have no wish to go into party politics. It ia essential, however, that farmers shouid awaken to their responsibilities and 1 implore you to use every endeavour to get those farmers, at pTesent outside, into the union. (Applause.) Mr. Y. Toulmin (Hunterville) supported Mr. Hammond and stressed the ueed for unity. He felt that the union eould be partly blamed for the position in regard to membership. In the past the union had not been needed to the same extent as it was .to-day and he felt that for that reason thmgs had be-

come a bit slack in the matter of organisation. He confessed that he had been oue who had never taken much interest in the union 's affairs and was offering his unbiased opinion. The strength and membership of the union depended npon the service the union gave and he did not think that the union had rendered the service it was capable of. In reply to. a question the' president said that the compensating price proposal was now the policy of the nnion. Mr. G, L. Marshall (Marton) said that .the - compensating price had been accepted as being the best way out of a dilemma. It had been sponsored by the Auckland members who had steered it through the last conference. He was' dead against it and considered it a most iniquitous proposition. It was popular only with the Auckland dairy farmers. The whole scheme was rotton to the core. The union knew it was uneconomical yet adopted" it as a policv measure. "Well, what is the alternativel" asked the president. What would farmers do if they turned it down and prices fell?' Would it not be logical to assume that the Government would answer the union 's appeal for assistance in words to the effect that we could "stew in our own juice?" He had his own views on the position but what was the alternative to compensating prices? If there was something better to offer then the union wonld be only too happy to know of it. Mr. J. B. S. Dudding (Marton) ad* mitted that all wero dead against the scheme and it was anly accepted because ^conditions had forced it on the farmer. He was prepared to back the scheme because while they had the Government they had there was nothing else for it. It would have been much better, suggested Mr. A. C. Coleman (Marton) if the Government had introduced a moratorium such as that which operated in the 1921 slump. Mr. D. G. Gordon (Taihape) said that the subject was difficult to approaeh without trespassing upon party politics. He felt that the poliey of compensating prices had been adopted without the concurrence of branches and that to his mind had been the weakness. He was quite opposed to compensating prices and sympathised with the president. Costs shouid bear some relation to income and he claimed that as prices fell, wages and interest shouid be reduced. One of the difficulties of the depression was that wages wero reduced but interest was not interfered with for at least two years. It would be better to fight for silch a scheme than the idea of compensating prices which savoured very much of ultimate Government controL The compensating price carried . with it a guaranteed price with State control, or, alternatively, a boosting np of the exchange which in the long run would defeat the end in view. Mr. Q. O. Wilson (Bulls) : I quite norrpo

The president remarked that the arguments were quite twelve months' old. Dairy farmers were 100 per cent. behind the compensating price scheme. Mr Gordon asked whether dairy1 farmers had had an alternative pnt up; to them such as reducing costs. "We have been fighting for that for years," replied Mr Hammond, "but we never got any where; It seemed to be; a hopeless fight." ** Mr Hammond went: on to refer to a resolution carried by. the executive in 1932 in which a plea was made to the Government to reduce. the interest rate. He admitted that the' whole scheme was based upon uneconomic grounds, but there was no chance of altering the policy. Practically the whole of New Zealand was in favour of the scheme. Mr E. C. Barnett (Halcombe) considered the scheme rotten to the core and would end in a crash. The country was definitely heading towards inflation and it seemed that some were anxious to get what they could out of the position before the crash. Mr D. D. Simpson (Hunterville) !| There is an alternative but we aro notl allowed to deal with it. That is a! change of Government.

Even if the rest of New Zealand was in favour of the compensating price, Mr G. L. Marshall could not see any reason why the executive shouid meekly acquiesce. Mr F. 0. Jurgens (Bulls) agreed with this view and saw no reason why the Wellington executive shouid not stand out. Mr Marshall considered that if a plebiscite of the farmers were taken the scheme would not be endorsed. He claimed that in two years' timo the country would be facing another slump and, with prices down, who would pay for the compensating price? Mr B. McLeod (Feilding) said that farmers did not want it but as they were getting behind they had grasped at it. There was no alternative, said the president. Mr McLeod: It's hard to suggest an alternative. j /If we ^ accept the compensating price, isn't it asking the Government to control our meat and wool?" asked Mr Marshall. "No," rkplied the president. "The Government had made a definite statement that it would not commandeer meat and wool." "But the Government has the powef to act now if it wishes, ' ' remarked Mr Coleman. say,".said Mr Hammond, tnat the Government has been very rair to the union. It has kept faith so far on questions which the union had brought forward."

Delegates expressed the view that branches shouid have had an opportunity of considering the matter of compensating prices before the union adopted it as a matter of policy, and Mr , Jurgens moved: the Dominion executive of the union shouid not in future make any policy definitely the policy of the union before branches had had an opportunity of considering t,he matter." 6 The motion was secondeS by Mr Barnett. ' G. Short (Feilding) considered, that opposition to the compensating H meAn a sPUt in the imion. Lt might mean the re-birth of the Dairy Farmers' Union. After further discussion, the meeting adopted the reporfc and balance-sheet " kQI J ■? carried the motion proposed by Mr Jurgens. Later in the meeting, Mr Marshall moved the following remifr for the forthcomrng inter-provincial conference: — That this conference considers guaranteed or compensating prices for prinn^y produce unsound in pnnciple, and that it would be impossible to implement such' when prices f all to slump levels. ' ' The motion was seconded by Mr B Hogg and carried by .17 votes to 9.