State as Protector

Sun (Auckland), Volume II, Issue 429, 10 August 1928, Page 8

State as Protector

Producer Helped by Guarantee

BY the generous guarantee of a minimum price to the New Zealand egg producer, the Government has added another stone to a substantial wall of protection which it has been building up for the primary producer during the recent years of heavy competition. Although industrial stimulants have a reflex effect in added production costs, the Government claims that financial assistance to insecure primary industries is essential until markets are developed.

As well as protecting straggling secondary industries by tariff duties, the Government has accomplished much toward assisting specific primary products by a guaranteed minimum price at times when there appeared little prospect of these commodities being produced and marketed at a figure approaching world parity. A net return of Id a pound is guaranteed upon all apples and pears exported, the pork industry is being encouraged by a substantial subsidy, a sliding scale of duties on wheat virtually guarantee the grower a fixed price, mining and prospecting assistance is provided, unremunerative railway freights are conducted

for the benefit of primary producers, and now the egg exports will go forward with the poultrymen assured of a reasonable market return. In some cases this widening circle of protective generosity is shown by figures to have been costly to the State —either directly or through an effect upon related industries —but the producer has necessarily advocated some assurance of commercial return because of the relentless pressure upon his undertaking from outside competitors. The maintenance of New Zealand wheat prices at a figure slightly above world parity was calculated by the Government to encourage wheat production, particularly in the South Island, where the growers suffered heavily from grain importations; and

the duties were fixed at sueh a figrure as to make production of this commodity more attractive, and to encourage the consumption of our own product within the Dominion. SUBSIDY ON PORK The State has paid out £3.644 in subsidies on exported pork, and although the 1929-30 allocation has been determined by Parliament at £15,000, the producers have claimed that this season’s subsidy—amounting as it did to a half-penny a pound oil the exports—was Insufficient materially to affect the marketable state of the industry. The cost of pigraising, as well as that of egg-pro-dicing, had risen on account of the high price of grain feed, and the Government, perceiving the possibilities of export development, recently extended Its protective arm to the poultrymen, and guaranteed a minimum price of £3 5s gross on a case. This was done on the assurance from overseas of a steady market demand for eggs from New Zealand.

The guaranteed price upon apples and pears, which has operated since 1924, has been substantially to the advantage of the producer, and heavy calls have been made upon the Government’s obligation during the past few fruit exporting seasons. IRON BONUS INCREASED

Under legislation which has operated since 1924, £4,487 was paid out last year in bonuses on the production of iron, but in anticipation of greater output from Onekaka, the amount is increased this year to £B,OOO.

By a revision of the freight tariff in 1925, the Railways Department afforded tangible assistance to the agriculturist. and increased products resulted from the free carriage of manures and the transport at low rates of various goods. In his statement to Parliament last year, however, the Minister of Railways said it was impossible to estimate how far this would be pursued, because the motor traffic had captured most of the freights upon which the railways hoped to offset its losses on free haulage. Direct financial help to primary production is provided in this year’s Estimates, £59,000 being allocated for research and £9,500 for herdtesting associations.

So far as guaranteed prices on apples, pork, poultry and iron are concerned, the State, having committed itself to the role of protector, will now protect until the affected industries throw from themselves the crutches of infirmity and strut forth stoutly to take their places in the economic sun. The alternative is mirrored in the words of Nature s ancient law —the survival of the fittest.