PRICE GUARANTEE

Manawatu Standard, Volume LVII, Issue 224, 21 August 1937, Page 4

PRICE GUARANTEE

AFTER FIRST YEAR. DAIRY FARMERS’ POSITION. HAMILTON, Aug. 19. A statement that at the end of the first season of guaranteed prices for dairy produce the producers were in a worse position that at the end of the previous season, was made by Mr R. H. McKenzie (chairman of the New Zealand Co-operative Dairy Company) at the annual meeting ci the company.

Mr McKenzie said several favourable factors had, however, substantially offset the effects of the rise in costs during the season. Of these factors the rise in production was the most important.

Referring to the current season, Mr McKenzie remarked that.the industry still awaited the Government’s belated announcement of the guarantee. The company’s price-fixing committee had asked that, prior to a decision being reached on the new season’s price, it should be given an opportunity of submitting its case to the Minister of Marketing. This request had been made following a statement by a dairy company chairman that Id a pound rise on last season’s price would be satisfactory. The industry awaited with interest the grounds on which he reached the conclusion that the average farmer, after paying the ruling rate of wages; allowing himself the same, with the added amount he was entitled to as a manager, and without exploiting the labour of his wife and children, could i carry on with Id rise under the present conditions. WAGES AND HOURS.

The contention that some could do so through, better conditions -was answered by the fact that in nearly all instances those improved conditions had been brought about by years of hard work and efficient management. Was the farmer not entitled to recognition on this score? The person who made the best use of the means at his disposal was a benefactor and should be rewarded accordingly. The dairy farmers were not unanimous in desiring a guaranteed price, some contending it would be used as a lever to raise wages which could not be so easily reduced .again, as could a guaranteed price. This viewpoint had been borne out so far. Wages were not based on the average of the proceeding 10 years, but on the highest rate during that period. Had the rise stopped there no serious complaint would have been made, but the shortening of hours added another 10 per cent-, not to mention further rises ns the result ol strikes. It was not to be wondered at that the farmer found himself worse off at the end of the recent season than at the end of the previous season.

It was the raising of costs after the guaranteed price had been fixed, said Mr McKenzie, that had led to the demand for the compensating price. THE COMPENSATING PRICE.

When the directors of the company were first asked to take an interest in the compensating price campaign the following planks were agreed upon to obtain a price for the farmer that would enable him to pay: —(1) Coni-

petitive rates for wages; (2) allow him reasonable interest on the capital invested by him in his farm and stock; (3) enable him to meet the increased costs imposed by legislation, inelud ing tariffs; (4) allow himself a remuneration eominemsurate with the services rendered to the community and with that obtained by other sections of the community rendering equal service. Mr McKenzie said the directors approved of the scheme only it confined to the above formula, and dissociated themselves from the introduction of any extraneous matter. It was assumed that the guaranteed price' was fixed after taking cognisance o) all the then existing factors. What they asked, was that should costs rise during the currency of the season, the price should also rise automatically. Conversely, should costs fall, which they would prefer, toe price should fall correspondingly. This system would obviate the time lag, so far as the farmer was concerned, and keep before the general puhlic the current trend The four planks of the compensating price campaign met with the unanimous support of the delegates to the last Dairy Board conference, after the matter had been fully discussed. What they asked for was so fair that no attempt had been made to combat it.