MARKETING PRODUCE

Hokitika Guardian, 23 August 1926, Page 4

MARKETING PRODUCE

(“-Mercantile Gazette.”) The annual convention of the fanners of New Zealand held in ‘Wellington invariably provides considerable amusement because of the wonderful ignorance displayed by farmers in respect to economics. There is a little school of noisy men who have become obsessed with tho idea that the setting up of control hoards will achieve extraordinary and impossible results. But the word “control” has acquired a sinister lmj'ming since the Dairy Control Board decided upon exercising compulsion, and so we find the fruitgrowers have decided to eliminate the word, and have decided to designate their hoard as the “Fruitgrowers’ Board,” this of course is camouflage, for it is a, control hoard like all the others. Now a certain section of farmers desire to have a Wool Control Board, hut the word “organisation” is to be substituted for the word “control,” hut if tho advocates have any voice in deciding the functions of this hoard it will possess all tho powers granted to the Meat Control! Board, and that includes the power of compulsion. This yenrningon tho part of a section of farmers for control hoards is inexplicable, uni'ess we assume that in their opinion these boards will be able to “stabilise’' or /bring about an improvement in prices favourable to the farmers.

When discussing flip formation of a. Won! Control Hoard one speaker stated that lie had been very disappointed at the prices which had been pcivo ll for wool by the buyers at the New Zealand stiles. They had been told that wool prices must lie stabilised, and the hie; finnnc'id interests would not advance against wool until prices had been steadied. Were the New Zealand woo'growers going to sit down under such treatment? Another farmer failed to see why New Zealand crossbred wool should bare to bo sold at from 4d to 5d below eost of orcdiirtion. A third flirmor remarked that they could out on a wool sale in Gisborne but flip buyers would not romp there. A Wool Beard would bo able Ir> say where wool should be sold, and from his point of view that settled the matter. A Wool Board may he authorised by Parliament to order the woolgrowors about, but the buyers cannot he so controlled, and the farmers want to he careful that they do not am (a go i lisp the buyers. The idea of the farmers appears to bo to raise wool prices through some mystic powers which they believe control boards possess, and it seems that no amount of argument will drive this folly out of their minds. No board, no matter with what powers it may bo endowed with by Parliament, can fix or dictate prices, and least of all can this be done in. the wool trade.

The conditions under which wool is marketed in New Zealand and Australia. are as perfect as human ingenuity can make them, and that they are not unfair or unreasonable as they affect growers is proved by the fact that practically about 98 per eeut of the clip is now sold at auction within tho Dominion. A woolgrower is not obliged to offer his wool at tho .local sales, he can, if he prefers it. ship his wool and offer it at London sales. Ho has thus the option of two markets, and if he prefects the lortal market we may assume it is because it suits him hotter. The price of wool to-dav may he, as some growers contend, below tho cost of production, but that is no concern of the buyer, who also seeks to make a profit on his purchase. It is not the cost of production that worries him, hut how much profit lie cain earn on his turnover. If the cast of production is greater than the selling price of wool, which we unhesitatingly say is not the case, then it is tho"duty oT the woolgrowcrs to study ways and means of reducing those costs. No wool control board, or wool organisation hoard can fix prices or stabilise prices. The price of a commodity depends upon the economic factors of supply and demand; neither producer nor consumer, between whom there is a never-ending contest, can fix arbitrarily the price. Ti'ule is mutual, and price is fixed by mutua.

consent. The farmers and some members ol Parliament have considerable faith in compulsion, a power given to the hoards bv Act of Parliament. > ll3 President of the Farmers’ Union w.io, ns a member of the Rural Credits Commission, has had the opportunity ot making personal investigations, receutlv stated that “Dictation and any attempt at price fixing would, in my opinion, ho suicidal.” (He was .-referring to butter). “The whole position is . surrounded with greater difficulties than I. for one, appreciated before investigating for myself. I heie i» unfortunately a very strong feeling at Homo against what the British gH.cu and merchant erroneously believe to be the policy of the Barry Board. Members of the Commission, of which J. was recently a member, who made careful investigations m most of the important centres ol Great B>.ta. were astonished and alarmed at the hostility of many who had formerly been our customers and who were now purchasing other butters lhe fa mc:,s, or some of them, wi.l not he convinced of the futility of these ccntio boards without a full experience of their opetitions, and it is thereto o worth while letting the Dairy Control Board continue with its compulsion business.