DAIRY FARMS.

Auckland Star, Volume LXX, Issue 192, 16 August 1939, Page 14

DAIRY FARMS.

OUTPUT DECLINES.

INDUSTRY'S PROBLEMS

WORKERS' NEEDS STRESSED.

VIEWS OF COMPANY HEADS.

(By Telegraph.—Own Correspondent.) HAMILTON, this day.

The problems of the dairy farmers of the Dominion, with particular reference to those operating in the Waikato, were stressed at. the annual meeting of the New Zealand C'o-operative Dairy Co., Ltd.. held at Hamilton to-dav. The chairman of directors. Mr. R. H. McKenzie. stated that during the season just closed the company's butter production had fallen by 11.32 per cent, whilst- cheese showed a slight increase of 2.67 per cent, brought about by the

erection of a new cheese factory at Ngatea and the switching over of a casein precipitating station to cheese. The butterfat represented in this in-

crease was infinitesimal when compared with the total output. During the season suppliers of the Raglan Dairy Company had decided to link up with their organisation. This entailed the closing of their factory and the transfer of that supply to their Franktcn factory. ThU had been effected without the least friction.

With world prices low and future prospects unpromising in casein, the management deemed it wise to contact the various groups interested in this commodity'and place the position before them. The present prices would not in most cases pay the skimming and manufacturing costs, let alone pay a premium. The alternatives were either to continue without a premium or, where the supply at. a centre was large enough, to make cheese instead. Five of the large precipitating stations—Te Aroha West, l'ukekura. Otaua, Te Kowhai and Rototuna —chose the latter and would shortly he in a position to commence operations. A sufficient supply could not be obtained from the smaller groups to warrant the operation of the drying station. New Zealand Dairy Finance Company, Limited.

The very difficult season had, of course, made the calls" on "the I'inaifce department extremely heavy. Almost 2500 applications and variations were made during the year ended April 30 last, the total sum being advanced lor the assistance of the suppliers reaching the record figure of £221.256. The bad debts for the year again were extremely light and notwithstanding that the total advances of the company since its inception in 1026 had totalled over a million pounds and a quarter in loans, the bad debts total only £2412.

New Zealand Dairy Farm Mortgage

Company, limited

Owing to the unfavourable investment market it was difficult to obtain funds for mortgage investment at 3J per cent, and the directors did not deem it advisable to increase the borrowing rate above that figure, with the result that the New Zealand Dairy Farm Mortgage Company, Limited, restricted business during its year ended March 31. 1939. The existing securities were on ;• very satisfactory basis and the investments by that company as at that date totalled £209,519. Employees' Superannuation Fund. Notwithstanding the social security legislation, the comparfy and its employees consider it wise for the time being not to disturb the present position of their fund. :•Vugh contributions were being made to two funds and commensurate benefits clearly would not be obtainable. Warning to Farmers. "In regard to finance generally," proceeded the chairman, "I would like to point out that the difficult season just past should sound a warning to all farmers to take care as far as possible that their future commitments are not likely to exceed their incomes. Experience gleaned from former periods of recession show that it is somewhat difficult for all classes of the community, and apparently Governments, to live within their reasonably prospective incomes. The position-during the past 12 months has not been improved by the difficulty experienced by the farmer in obtaining suitable labour to carry on essential farm work and it is regretted that the Government of the day has not seen fit to make moneys available for housing accommodation in rural districts. In fact, I am reliably informed that owing to the calls of the Government housing scheme in the towns moneys have not been available for farmers for some time. If increased production is required, the labour must be available to assist and that labour can only be employed if there are means of housing the labour. The Agricultural Workers' Act recently passed calls upon the farmer to provide a proper standard of. accommodation for the farm worker, and rightly so, but expressions- as to desire of increasing production and the like are of no avail unless money is made available to carry those things into effect. One would think that in a primary producing country the first care of any Government would be to maintain primary production and to see firstly that all necessary moneys are available for the business of that very necessary industry. Guaranteed Price.

"The announcement, of the guaranteed price fo"r the 1939-40 season is held up pending the return to New Zealand of the Hon. Walter Nash, Minister of Marketing. . \ "When speaking in the House of Representatives on the Agriculture feMMßccy TTiil m T*m*w Ift inTi

Mr. Nash said inter alia: 'I see little more difficulty in working out a system cf guaranteed prices for a man who produces milk and its secondary products than for working out a system under which a miner is given so much for producing coal. The only difficulty is a •shortage of capacity in working 'it out.'

"This difficulty was overcome by the [appointment in 19.38 of an advisory committee to assist the Minister in arriving at an equitable price to pay the farmer. No one has ever questioned the capacity and integrity of the membets comprising that committee. Three members were the selected representatives of the dairy industry, "whilst three were appointed by the Government with a nominee of the latter, .Sir Francis Trazer, as chair-j man." After an exhaustive examination this committee arrived at a unanimous decision as to what represented a fair price to pay the producer for his butterfat. 11l arriving at this decision the committee set up standards as to the production per cow and the labour unit, and these standard", certainly did not favour the farmer. Advisory Report Disregarded.

"The Minister disregarded the recommendations of the advisory committee and fixed the price at a much lower level and in doing so sought to justify his action by reference to a clause in the advisory committee's finding, which read: "In submitting its report the eoinmitte recognises that its functions are purely investigational and advisory, and recognises also that owing to the impossibility of forecasting, even approximately. the market realisations for a year ahead it cannot make a definite finding regarding the possible financial implications involved in the payment of the prices it has recommended. The decision as to both the prices to be paid and the extent of the financial implications involved is necesarily dependent on general considerations of Government policy regarding finance and the committee can therefore only submit its recommendations in accordance with its order of reference." The Minister then went on to say: "Heavy deficits, moreover, if re|ieated. must inevitably wreck the whole guaranteed price procedure."

"Are we to understand that the dairy farmers' guaranteed price is to be based more or less on London values while he is subject to an ever-increasing rise in costs? Again quoting from Mr. Nash's speech on the Agriculture Emergency Bill: 'The guaranteed income of the farmer must fit in with the guaranteed income of all the other people of the Dominion. Tn the ultimate the income that the other people get will be from the income which the farmer gets and the farmers' income itself can only come bv the use of other people's income to take the product of the farmers' labour, skill and experience.' This sounds all right were all our products be : n'r consumed in New Zealand, but as only 17 per cent o f otir butter and 3 per cent of our cheese is consumed locally, the huge balance in competition with other countries has to 1>« made to fit in with the income of the British buyer, vhi'h '•* averagelv much lower than rules in this country.' Hence the deficit on last season's output and the likelihood of deficits in other seasons.

Reduction of Costs Needed. "Every sane thinker recognises that the proper way to restore equilibrium is by reducing cost, but in the present atmosphere this apuears impossible. Your directors are therefore fully in accord with the resolution parsed at the Diiirv Board fonfercce at. Wol'ington in April last, i.e.: 'Tlm f the Tiiaranteed price be that recommended by the Advisory Committee in 1038. plus afly increased costs that have accrued in the interim.' That the Minister cannot "conscientiously refuse this request is shown by his own statement, i.e.: 'The Government is satisfied that the working dairy farmer does not wish to end the guaranteed price procedure. It recognises, however, that he desires and is entitled to recover the increased costs that have been experienced and a better labour reward in accord with the jreneral improvement in living standards.'

"The New Zealand farmer is entitled to a New Zealand price for butter and cheese produced under New Zealand conditions. Two Bad Seasons.

"For the first time in my recollection butterfat has shown a reduction, for two seasons in succession, and this season is opening inauspiciousTV,' our company showing a decline of 27.84 per cent in butter and 16.22 per cent in cheese compared with June and July of last Reason. Unless we experience a remarkably good growing season we may again show a fall in production. Much of this it is true is due to unfavourable weather conditions, but by no means all. We have had unfavourable seasons before, but the then normal natural increase made up the leeway to a great extent. This normal increase has ceased—a fact which should give our Government food for thought. Time was when every farmer aimed at increasing his production and usually succeeded in doing so, but under present conditions he has neither been encouraged nor has he the means to do so. Countries live on their production—in New Zealand on farm production. If the farmer goes down so will everyone else in this country and our muchvaunted high standard of living will go down as surely as night follows day."