Compensating Price

Hawke's Bay Herald-Tribune, Issue 111, 27 May 1937, Page 8

Compensating Price

— Prets Acsociation.)

farmers differ Discussion at Dannevirke Conference . THE UNION'tS POLICY

«Sy Telegrapb

DANNEVIRKE, This Day.. At tke interpTOvincial conference of tke New Zealand Farmers ' TJnion at Dannevirke yesterday, delegates representing tke Wellington Central, ^Manawatu, Wanganui, Southern Hawke's Bay, Wairarapa and Makara -Hutt provincial districts, reacked a momentous decision in endorsing the union's policy of compensating prices. The question "That this confererice considers compensating prices for primary produce unsound in principle and - that it would be impossible to implement such wben prices fall to slinnp levels" was kecnly debated at the instance of Mr. G. L. Marskall (Marton), wko moved tke remit on behalf of the Wellington Central provincial executive, and on being put to tke vote was lost by 40 votes to 49. Speaking to. tke remit in its original form, "That this conference considers gnaranteed or compensating prices for primary produce unsound in principle, and that it would he impossible to implement suck when prices fall to slump levels,." Mr. Marshall expressed the opinion that the union had somersaulted in supporting guaranteed or compensating prices.- Thepast policy of the union kad been against any interference witk tke primary producers' industry but now tke nnion kad accorded its sttpport to eompensating prices. He . felfc 'jthat suck a policy could not be implemented without xecourse to tke printing press and an orgy of inflation suck as Germany had indulged in. The speaker quoted the remaxks of Hon. R. Semple with regard to the impossibility of utilising the. printing press to provide notes and xemarked that the statement was on all fours witk tkose utterances of Hon. J. G, Coates and Hon. W. G. Forbes. He did hope tkat tke union would Tefuse to endorse suck a. policy.. Mr. D. G. Gordon (Taihape) claimea tkat support for tke policy of compen-j sating prices was dangerous sinco tke1 effect would be to start a vicious circle of rising costs. ■ Tke union skould devote its energies towards establisking a sound principle in Tegard to costs and tkeir xelationskip to income. He admitted tkat tke union kad been flghting for, this without success f or tke reason tkat its effofts kad not been karmbnisedj. ' , * ,• .! - Mr. J. S. Bremner (Fakiatua) felt * tkat finality would not be reacked on tke reniit because compensating prices and guarahteed prices were two different questions and skould'be separated. * Tke Dominion president oi tke "union (Mr. W. W. Mulholland) read a draft of the proposed plank of the union 's policy regarding compensating prices. Mr. J. K. Franklyn (Wanganui) asked where was the money to come from if the compensating price was fixed at 50 per cent. above the market price at Home? Mr. Mulholland said that he had no wish to involve kimself in a discussion before he had made his statement on the union 's policy. Mr. W. Morrison (Wanganui) felt that the Dominion executive of the union kad been forced into adopting compensating prices by tke dairy farmers. Tke guaranteed price kad brought witk it increased costs and tke dairy farmer, ke felt, was entitled to ask for a compensated price to set off tkose increased costs. Mr. H. Morrison (Wairarapa) pointed out tkat tke policy of compensating prices was adopted by tke last Dominion conference of tke union as a method of assisting tke dairy farmer. Tke union* had opposed guaranteed prices but the Government had applied guaranteed prices to the dairying industry and whatever virtues the system had, had been wiped out by higher costs, and the dairy farmers were entitled to ask for a compensating price. "Let those who are advocating compensating prices show us that the seheme is sound," remarked Mr. Franklyn. *

Mr. R. Craig (Rongotea) was against guaranteed prices, but if the farmer 's produce was to be taken from him then he wa3 entitled to demand a compensating price to enable him to meet the higher costs. Mr. C. E. C. Webb (Levin) opposed the remit, sthting that the mover had admitted the gap between costs and toreturns and had suggested tackling costs. That had been tried without success and the only remedy was a compensating price. The chairman of the conference (Mr. R. Sie ver s, -Porirua) felt that the Tefereuce to compensating prices in the Temit should be dcletcd to enable the conference to exprcss ils views on uuaranteed urices.

The conference agreed to the deletion of the words "guaranteed or" from the remit. Mr. F. C. Jurgcns (Bulls) questioned whether compensating priccs would be ' workable. Did the union believe in compensating prices or had it adopted the policy as a means of pointing out to the Government the fallacy of its present policy? The principle of compensating prices was sound, said Mr. W. J. Thomas (Carterton), who contended that the policy of compensated prices was complementary to the union 's fight for the control of costs. It was, his view that the principle of compensiiting prices would tend to put a brake on rising costs. Mr. J, McLeavey (Manawatu president) thought the scheme a reasonable solution for all time. Mr. Marshall, in reply to the debate, Aaid; Thi» will mean the ruining of the

coimtry. The Government will have to set up a printing press to spread the notes amongst the farmers when prices overseas reach slump level. The remit was defeated by 49 votes 'to 40, delegates alone voting as it was a policy matter. President Reviews Situation. The subject of guaranteed prices was touehed upon by Mr. Mulholland, union .president, He did not like the name guaranteed price, considering a better one would have been "stabilised" price. The Dairy Products Marketing Act was framed to bring in all farm : produce at some time or other. It was a compulsory pool of an undetermined duration. The objecfr of the Act was ito iron out. inequalities of price over a number of years. There was no pro•vision in the Act for a payment great- ' er than what the industry reeeived but the Government cduld pay out more for auy oue season by way of an overdraft but if tho scheme was to be successful, the payout must balance with what was reeeived over a period of years. To meet that contingency the Government had power to vary the payout from year to year. If sueh a scheme could be operated successfully it would be a fine thing and should be given a fair trial. There was nothing inflationary in the Act. itself nor would the Government let it be. It seemed tke Government was going to pay a price next season tkat was deeided by tke state of the markets and this pointed to the fact that the control of the country's produce was in political hands and not in the farmers'. The Minister, it seemed, was considering the political effect and that was a weakness. It would prevent the scheme from getting a fair run. As regards wool and meat, the way costs were being inflated, it was inevitable that the sheep farmer and grswier jwould.be calling out to the Government ifor help. Wages had been incrChsed and there were ofcher restrictions such as the 40-hour week, crippling the farmer. It must be obvious, tkerefore, that when prices fell, farmers would not be able to meet costs. The result would be an appeal to the Government under the Primary Products Marketing Act. There was a .further yista not unseen by Hon. Mr. Nash. When the Government controlled all exports, it would control all moneys overseas. This would imean the country would be unable to •import even a packet of pigarettes without going to the Government. And the Minister had laid it down as a policy that, when that happened, the 'Government would determine what could be imported into the country. Now the union was arguing inflhted .prices to meet increased costs. The Government, apparently, did not realise the importance of tho order in which •its policy was brought into effect. iWages were increased as the first step and costs went up ahead of returns. •The Government had become alarmed at .the situation and were looking to the 'farmers to help them because there was a definite limit to which the industry could be helped. The farmers had' not Only to keep down their own costs but also help the Government to keep down costs. (Applause.) The conference accorded Mr. Mulholland an enthusiastie vote of thanks.