Wairarapa Times-Age FRIDAY, JUNE 10, 1938. THE DAIRY PRICE PROBLEM.

Wairarapa Times-Age, 10 June 1938, Page 6

Wairarapa Times-Age FRIDAY, JUNE 10, 1938. THE DAIRY PRICE PROBLEM.

f A.S it was advocated by responsible members of the Labour Party during the last general election campaign, the guaranteed price policy was one under which the high prices received for dairy produce in years of good marketing were to be set in part against the low prices received in less prosperous years. Many people in this district, who attended a.meeting addressed by Mr Semple in 1935 will remember that he exhibited a graph showing the fluctuations in dairy produce prices over a period of years and explained • that with guaranteed prices in operation these fluctuations would be flattened. It appears to have been taken for granted by Labour spokesmen at that time that the averaging of prices over a period of years would always give the dairy farmer a reasonable margin of return over his total working costs.

Largely, no doubt, on account of the extent to which it has been complicated by a steep rise in working costs, the existing position with regard to guaranteed prices is confused and mystifying to a degree.

At Gisborne, on Tuesday, the Minister of Education (the Hon P. Fraser) said, as he is reported, that:—

It was the Labour Government’s policy that in years in which there was a surplus this sum would be held against years when there would be a deficit. This policy, however, would not be put into operation this ■ year, but £500,000 or t so would be distributed to the dairy farmers before the end of the year.

This has inspired in some quarters the jibe that in an election year, the Government is trying to buy the dairy farmers with their own money. Farmers who allowed themselves to be bought with their own money obviously would have themselves to thank for the position in which they found themselves. It may be supposed in fact that the attitude of dairy, farmers towards the Government will be determined much less by the distribution of the present season’s surplus than by what the farmers think of the probable future development of the guaranteed price policy. Here obviously, there is a good deal that needs to be, cleared up.

When he was interviewed in Wellington yesterday, the Prime Minister (the Rt Hon M. J. Savage) repeated and slightly amplified his earlier statement that the Government was prepared to hand over the responsibility of fixing guaranteed dairy produce prices to a tribunal presided over by a Supreme Court Judge.

As I have said (Mr Savage observed), next season we are prepared to give the farmers the tribunal they are asking for, provided the people who are talking represent them. Farmers no doubt will be satisfied with the price that the tribunal fixes. We will expect them to be in any ease.

This is definite as far as it goes, but still leaves a gooc( deal to the imagination. Whether farmers will be satisfied with the price fixed by a tribunal obviously will depend on what that price is, and what relationship it bears to itheir costs.

Much must depend, also, on the basis on which the tribunal is instructed or asked to determine the price to be paid. For example, is the tribunal to give effect to the policy originally declared by the Government and now reaffirmed’ by the Minister of Education, of simply averaging the prices received over a period of years for export dairy produce, or is the price to be one which will give the farmer a fair margin over costs irrespective of the movement of oversea markets? If the last-mentioned basis is to be adopted, by what means is it proposed to make good the expanding deficit that very possibly might then become a feature of the Dairy Industry Account?

Until these questions have been answered, the proposal to set up a tribunal to determine the guaranteed price can hardly be credited with tangible form or shape. A tribunal simply could not act unless broad lines of policy at least were laid down for its guidance.