Farm position ‘critical’

Press, Volume CXIV, Issue 33671, 22 October 1974, Page 16

Farm position ‘critical’

The farming industry and the country were faced with a critical situation, Mr R. H. M. Johnston, of Oxford, the North Canterbury member of the electoral committee of the Meat and Wool Boards, said yesterday.

Mr Johnston was commenting on the recent announcements by the New Zealand Refrigerating Company, Ltd, of its intended rise in killing and processing charges, and its opening schedule for lamb prices. “Together with falling prices, down to about 50 per cent of those 12 months ago, the farming industry has had to sustain massive cost increases in all areas of production at a rate never before thought possible,” he said. “Last year, costs rose 15 per cent, and estimates of a similar rise this year now appear conservative. “Devaluation will assist to ' only a limited extent. The ! onus is now on the Govem--1 ment to restore balance to an economic situation that has ' rapidly .got out of control. Failure to arrest spiralling costs and inflation will negate any benefit that should accrue

from devaluation. “The country just cannot continue to live beyond its means as at present. Massive overseas reserves have vanished only to be replaced by a large deficit and more overseas borrowing,” said Mr Johnston. ENERGY CRISIS “The energy crisis has contributed greatly to our plight, but in the face of rising costs and falling export receipts we will be fortunate to get 50 per cent of last year’s prices for meat and wool. The Government has a responsibility to the nation to inform us that the honeymoon is over.” If the nation as a whole were to share in buoyancy and prosperity, it must be prepared to share in adversity, said Mr Johnston. Net farm income was likely to fall until very little money, if any, would be left for reinvestment. “The position is as serious as that in 1971, when the Meat Board intervened in the market in a supporting role. A similar action will have to be given close consideration this year. Costs just cannot continue to increase while returns fall to the point where prices received are below the cost of production,” said Mr Johnston.