Wairarapa Times-Age FRIDAY, NOVEMBER 1, 1940. ECONOMICS AND FAIR PLAY.

Wairarapa Times-Age, 1 November 1940, Page 4

Wairarapa Times-Age FRIDAY, NOVEMBER 1, 1940. ECONOMICS AND FAIR PLAY.

J}ECLAIITNG that the industry for which it speaks “is smarting under a sense of injustice because it, is being asked for the third season in succession to accept the same fixed price and also to carry added costs due to increases granted to other sections of the. community,’’ the Dominion Dairy Conference has declared its complete lack of confidence in the Minister of Marketing (Mr Nash) and has charged him with failure td'meet specific undertakings to pay a price which would cover costs of production. Whether anything is or is not likely to be accomplished by singling out a particular Minister in this way, the conference has raised questions with which the Government, should feel bound to deal, either by demonstrating that the complaints made are not justified, or by endeavouring to grant and provide redress. On the leading facts of the position it is not to be denied that the dairy industry has a genuine and serious grievance. Under the guaranteed price scheme, it was promised returns that would cover working costs and put those engaged in dairying in a fair relative position with other sections of the community. In fact, however, the industry is offered the same prices as it received three years ago, although costs of production in the interval have risen considerably and are still rising. Some of the later increases in costs are due to the war and represent burdens which we must all share, but the dairy industry is in' a position to point out. that its costs have been increased. by the policy of the present Government, in part by concessions granted to some other sections, though not by any means to the whole community. It of course has to be admitted that the problem of satisfying the claims of the dairy industry is in existing circnim stances one of great difficulty. There is at present a deficit in the Dairy Industry Account of £2,160,000, which means that since the guaranteed price scheme was introduced, that amount has been paid out to dairy farmers in addition to the net. marketing returns on their produce. The additional amount has been paid from an overdraft.at the Reserve Bank, and it is an overdraft without visible immediate support. An unwillingness on the part of the Government to enlarge the Dairy Industry Account deficit by further‘borrowing from the Reserve Bank is understandable, but the underlying question—a question which vitally concerns other sections of the community as well as dairy farmers—is whether a continuance of the policy and circumstances in which costs' in excess of returns have been piled on the dairy industry can be justified. At the Dairy Conference, yesterday, Mr C. P. Agar said, as lie is reported, that the injustice to the dairy industry was illustrated by the fact that the country was suffering from a certain amount of inflation, and the dairy industry was expected to keep on producing and carry higher costs without participating in that so-called inflation. “If it is a good thing to have inflation, let us all be in it,” he added. “If it is bad, well, let us have equality of treatment for all sections of the community.” Up-to-date evidence Jwith regard to conditions making for continued inflation in this country was supplied by the Prime Minister (Mr Fraser) at the opening meeting of the Economic Stabilisation Conference in September. Though the total of goods and services for civil use has decreased by some 14 per cent, the amount of money that is available for spending by individuals (Mr Fraser said on that occasion), after taking into account increased taxes, is still about the same this year as it was last. A situation like this no doubt means that prices must tend to increase with the increased pressure of purchasing power on goods to be bought. That, I believe, is the situation by which we are faced to-day. This may be accepted as an accurate and authoritative statement of a position which as a whole is unsound and which particularly penalises not only dairy farmers, but. all who have to meet increasing costs from fixed or falling money incomes or returns. _ On the facts in sight, dairy producers have their own claims to redress, but there is al the same time a national problem to be faced. The Government has recognised the existence of that problem in setting up the Economic Stabilisation Conference, but current, policy in the Dominion is in some respects aggravating the existing economic instability ami lack, of balance. This appears nowhere more obviously than in the fact that while dairy farmers are called upon to meet increased and increasing costs from unchanged returns, award workers and some other sections have been granted wage bonuses which are intended to offset rises in living costs, but ultimately will raise all costs still higher. The affairs of the dairy industry where costs and returns are concerned are in a stale for which no easy or obvious remedy’can be suggested. In common with all other sections of the community, however, dairy farmers would benefit from sound measures of national economy directed to the curtailment of national expenditure, particularly on public, works, and to the greatest possible expansion of useful production. Taxation and saving have their place in the adjustments that are called for, but it is in building up production and cutting out what in existing circumstances can only be regarded as wasteful and unwarranted expenditure that roof remedies must be sought for the evils and difficulties of which a glaring result, and example appears in the existing condition "of the dairy industry.