COSTS AND RECEIPTS

Ashburton Guardian, Volume 53, Issue 15, 28 October 1932, Page 7

COSTS AND RECEIPTS

POSITION OF THE FARMER.

A SERIOUS DISPARITY.

(Special to the "Guardian.") WELLINGTON, Oct. 27. Directions in which New Zealand's economic position might : be improved were outlined by Professor Belshaw in an address to the executive of the Farmers' Union yesterday afternoon. He advocated a reduction in bank overdraft and deposit rates, and spoke in favour of a higher exchange rate. He said there was a serious ■ disparity between farm costs and farm receipts. The problem could be solved either by reducing the costs of production or by increasing money incomes and increasing purchasing power. The crux of the matter was to cause the profits of the farm to re-emerge. The policy should be to increase the receipts in such a way that costs did not rise equally, or failing an increase in farm receipts it was essential to reduce costs. New Zealand still required a rise of 50 per cent, in export prices to balance the position, but he was doubtful of the wisdom of further legislation to reduce costs. He maintained that the raising of the exchange would be in the best interests of New Zealand, and not merely of the farmers, but he did not entertain any hope at present that the exchange would be raised.

The great immediate danger to be opposed was any attempt to lower the rate in an effort to get back to parity unless conditions were stabilised «nd internal and export prices were in equilibrium. In the absence of a rise in the exchange of a substantial rise in sterling prices New Zealand could do little more than hold her position and prevent 1£ from getting worse.