Wairarapa Times-Age THURSDAY, JULY 14, 1938. FARMERS AND PRICES.

Wairarapa Times-Age, 14 July 1938, Page 6

Wairarapa Times-Age THURSDAY, JULY 14, 1938. FARMERS AND PRICES.

'PHE erection of a rather amazing structure of experimental price-determining machinery was advocated by delegates to the Dominion conference of the Farmers’ Union yesterday. Even with some proposals set aside, the conference not only affirmed the principle of the compensated price, which already figures in the Union programme, but carried a resolution calling upon the Government to set up a special statistician’s department, under the.control of a Fellow of the Royal Statistical Society of Great Britain, to find the net disability suffered by the farming community.

As the resolution was brought down, and before it had been pruned by the withdrawal of a proposal to constitute a special arbitration tribunal presided over by a Supreme Court Judge, it carried a note which stated that the disability (under*which farming industry labours) “extends back as far as the introduction of protective tariffs and the inception of heavy capital expenditure from the proceeds of loans.” No lack of sympathy with' farming industry in its genuine difficulties need be implied in suggesting that wordy adventuring of this kind would be better left alone. The Dominion President of the Farmers’ Union (Mr W. W. Mulholland) opposed even the part of the resolution that was carried, on the sufficient ground that: “We know what the position in New Zealand is - today.”

While those engaged in farm production for export undoubtedly are handicapped unfairly in having internal costs raised against them, although they must take what they can get for their produce in an unsheltered market, it may be doubted whether any artificial measures of pricefixing and regulation will afford them relief. It is not easy to see how such proposals as the Farmers’ Union conference discussed, and rejected only in part, yesterday, could be implemented otherwise than by the socialisation , ( of land industry and the reduction of farmers to the status of wage-earners looking for their wages to the State.

The weakness of the economic position of.the farmers of the Dominion appears only too plainly in days when, as Mr Mulholland said in his presidential address, “risingcosts soar merrily to the skies.” The position of the farmers is not wholly weak, however. It has strength in the fact that production from the land takes an all-important place in. this country’s total national economy, and cannot be wrecked without dragging most of our remaining economic organisation down with it.

Our land industries are responsible for oyer 60 per cent of our total material production and provide almost exclusively the exports which amount to nearly one-half of our total material production. A large proportion, too, of non-farming production, service and trading depends on the demand of those engaged in farming industry. These facts mean, amongst other things, that there are definite limits to the extent to which those engaged in farming can be penalised for the benefit of other sections of the population.

Eagerly as the subject has been canvassed of late, nothing that can be called a practical method of giving the farmer direct economic redress for the maladjustment of his costs and prices has yet been propounded. Even the Farmers’ Union, in its endorsement of the compensated price policy, has restricted itself to rather vague generalities.

Its policy plank in the matter demands the complete closing of the gap between farmers costs and prices by the reduction of costs (which it considers the sounder method) or by an increase in prices sufficient to enable farmers to pay competitive rates of wages, allow them reasonable interest on capital, enable them to meet, increased costs and allow them a remuneration commensurate with the service they render and with that obtained by other members of the community who render equal service. It is stipulated further that compensated prices are not to be brought about by inflation, meaning by that an increase in the general price level due to an increase in the amount of money put into circulation.

Stated in these terms, the compensated price policy appears to be equivalent to a demand, either for the reduction of costs to bring them into line with the prices obtained for export produce, or for the_ payment of a subsidy to farmers derived from the taxation of the nonfarming population.

Save under pressure of sheer economic necessity, in a period of depression, it is unlikely that any New Zealand Government will attempt a general reduction of costs As to the apparent alternative of a subsidy derived fiom taxation it seems obvious that it would be entirely inadequate when it was most needed. Unsatisfactory as this conclusion may appear to be, its effect is modified greatly by the consideration that to allow farming industry m this country to be driven to the wall evidently would be nothing else than a policy 7 of national economic suicide.