Farmers seek cost adjustment scheme

Press, Issue 32535, 19 February 1971, Page 1

Farmers seek cost adjustment scheme

(New Zealand Pregg Association) WELLINGTON, February 18. “We can earn more for New Zealand and we want everyone to benefit. Just give us the tools to do the job,” said the Dominion president of Federated Farmers, (Mr A. C. Begg) in Wellington today.

He was commenting on the cost adjustment scheme and the farmers’ economic position after the federation’s deputation to the Prime Minister earlier today. “When farmers talk of ‘tools for the job’ they mean a cost structure which will enable them to maintain sufficient ‘plough back’ into their properties to continue as a viable and expanding business. “These conditions do not exist at present,” said Mr Begg. “Fanners have for many months been smarting under the most unprecedented cost escalation in New Zealand’s history. “Last year agriculture earned 86 per cent of New Zealand foreign exchange yet, unlike other sectors of the community, farmers cannot adjust to escalating costs by increased prices or increased wages. ‘Rubs hard* “For an industry which consumes only 80c of imports for every $lO it exports this rubs hard. This is especially so when the manufacturing sector uses $3 in overseas exchange for every dollar it exports. In other words almost two-thirds of the overwhelming import content which allows New Zealand’s manufacturing industries to exist comes from the foreign exchange earned by the agricultural export industries. “It is ironical that the protected cost structure of many of these industries along with numerous service industries is in itself having such

a harmful affect upon the New Zealand economy and the farmer in particular.” “Stock numbers are practically static and the volume of farm production has actually declined. The relative position of farmers has slipped badly as a result of costs generated within New Zealand.

‘Excellent prospects* “Closely related is the disturbing deterioration in the nation’s terms of trade. The Minister of Overseas Trade recently highlighted the fact that as a result of this deterioration farmers ‘have clearly suffered more than any other sector’,” said the farmers’ president.

“Yet while the fanners’ position is deteriorating with a consequent decline in farm devlopment the over-all export prospects for agricultural commodities are excellent and expanding. The Dairy Board has insufficient produce to fill its growing markets. As a result milions of dollars in overseas exchange are being lost. “The same applies to meat. Even so, meat export returns (lamb and beef) soared by s4om last year.

“Unfortunately, farmers’ cost increases for petrol, killing charges, road and rail freights have increased by s4om in the last three months alone. "Further, these are only three items of farmers’ costs. Short term “With regard to wool, it is still our only export commodity which is unfettered by international trading barriers. Indeed, wool receipts alone at s2o9m are two and a half times greater than manufactured exports ($79m).” Mr Begg described the cost

adjustment scheme as “a short-term investment in New Zealand’s economic future made necessary by the peculiar circumstances confronting our largest export industry. “It will provide the means for fanners to resume development and production. “The scheme will be selfcancelling when New Zealand’s economic climate restores a reasonable relationship between farmers’ costs and realisations," he said.