FARM SUBSIDIES

Wairarapa Times-Age, 24 July 1940, Page 7

FARM SUBSIDIES

NOW RUNNING TO OVER £1,000,000 MR HAMILTON PERCEIVES DANGERS. ARTIFICIAL AND UNBALANCED ECONOMY. (By Telegraph—Press Association.) WELLINGTON, This Day. The opinion that the interna I economy of Ihe Dominion was unbalanced when it was necessary to provide in the Estimates for assistance to primary industry more than £1.000.000 was expressed by the Leader of the Opposition. Mr Hamilton, during consideration of the Estimates in the House of Representatives yesterday. Mr Hamilton said the whole position was getting on to an artificial basis, and he feared that when the war was over this would either result in the export industries being ruined or the exchange rate being forced still higher. "It is disturbing that an amount as high as this is required to keep agriculture operating in the Dominion.” Mr Hamilton said. "The Estimates provide £131.500 for the carriage of lime for farmers, £61.000 for part freight on farm produce, £222.500 for part freight on fertilisers, and a new one of £630,603 as a subsidy on raw materials for the superphosphate industry. In addition, there is £223,905 for the development of the wheat industry, which is actually a grant to keep down the price of bread. "Does it not appear,” Mr Hamilton asked, "that something must be out of balance when, with fairly good prices for our primary products overseas, the industry has to be subsidised to this extent? It does not give a great deal of confidence to farmers to bring in new land and grow more crops. One is bound to conclude that the internal price-level is too high and that costs to farmers should be reduced.” Subsidies were being paid to the primary industries in many different ways, Mr Hamilton added, and it seemed to him that if, after the war, the farmers were not ruined, the exchange rate would break away to an even higher rate. Either of those alternatives was very undesirable, and, in his opinion, the only way to prevent them happening was to keep the internal economy down. The Acting-Minister of Agriculture, Mr Langstone: "What is a natural level?” Mr Hamilton: "What the British working man can pay for oui- produce.” "Something has gone wrong, anyway,” Mr Hamilton concluded, "when we have to subsidise our basic industry to this extent.” An explanation of the £630,000 subsidy for the superphosphate industry was later given by Mr Langstone, who said there had been an increase in the price of phosphate imported to New Zealand, and the subsidy was being paid to the fertiliser manufacturers to keep down the price to the farmer. "The Government felt it was better for the whole of the people to carry the burden than that it should be borne by only one section—the farmers, Mr Langstone added. "The sum may seem large, but in recent years there has been a great increase in the amount of superphosphate used, and the total cost of the phosphate brought into the country has correspondingly risen.”