The Press THURSDAY, SEPTEMBER 12, 1963. Sheepfarmers’ Incomes

Press, Volume CII, Issue 30234, 12 September 1963, Page 12

The Press THURSDAY, SEPTEMBER 12, 1963. Sheepfarmers’ Incomes

The Government Statis- 1 tician (Mr J. V. T. Baker) i said recently that his sig-j nature to any statistics is a guarantee of their objectivity. Mr Baker, and his predecessors, have established a reputation which ensures universal acceptance of all statistics issued' by his department. It is all the more unfortunate,' therefore, that one of the' regular series of figures—the annual survey of sheepfarmers’ incomes—should. I in spite of its “ objectivity ”, be open to serious objection. Publication of this survey[ has frequently prompted criticisms of the farming, community. These criticisms, by interested parties, ■ have mainly been ill-1 informed or even disin- [ genucus. The Government Statistician is at least partly responsible for the illfeeling aroused by these criticisms and subsequent discussions because his figures are inadequate. The latest figures available in this series (published recently) show the “ average net income ” of sheepfarmers in 1960-61 at £ 2030, virtually unchanged from the previous year. This figure is merely the difference between average gross income and average expenditure (each itemised). It would be more accurately described as “ wages of management “ plus return on capital in- “ vested ” (the terms used by the New Zealand Meat and Wool Boards’ Economic Service). Nowhere in the latest set of tables, nor in Mr Baker’s explanation of the survey, is this made

explicit. The fanner is en-j titled to a return on the capital invested in his farm, as well as a retvard for his labour and the responsibilities of management. The Department of Statistics figures do not state the average capital investment in the farms covered by the survey; but from the average number of sheep (1587) this figure might reasonably; be put at £25,000. The! Economic Service has shown that the return on capital (at current market values) is little more than 4 per cent; and 4 per cent of £25,000 is £lOOO (which would include much of the £2lB shown as interest payments by each farmer). This would leave a little more than £ 1030 as the farmer’s “ wages of manage- “ ment ” and payment for his actual physical labours. Even allowing for the cheap food and housing and other perquisites of farm life (offset, in many cases, by ! boarding school fees and the lack of city amenities), the ! sheepfarmer's “ real reward i “ for labour ” cannot be I much above this figure. Broken down in this man- ! ner, the “ average net inI “ come ” of sheepfarmers is I seen to comprise a very modest return on capital i invested, and a reward for [labour well below that of thousands of wage and salary earners in 1960-61. Unfortunately, many of those who use (or misuse) the figures do not distinguish between the two components of “ average net “ income ”. Mr Baker should make the distinction, or give up publishing the surIvey.