Stabilisation of farm prices needed

Press, Volume CXIV, Issue 33680, 1 November 1974, Page 10

Stabilisation of farm prices needed

(Neto Zealand Press Association)

WELLINGTON.

The most significant step of the Government’s measures to control the inflationary spiral would be its negotiations with the Federation of Labour over the adjustment in wages and salaries next January, Challenge Corporation’s chairman (Mr R. R. Trotter) said in his address to the corporation’s annual general meeting in Wellington.

Mr Trotter said that it was essential that these negotiations were successful if the delicate balance in the economy, and therefore full employment, was to be maintained. “The increase must be minimal and should be limited in total amount even though this would mean some reduction in margins,” he said.

“Already, trade union and public service leaders are proclaiming loudly that wage and salary earners are ; being expected to bear the brunt of the economic burden,” he said. Nothing could be further from the truth, he claimed. Mr Trotter said that for the past six months farmers had felt the impact of deteriorating conditions and profits were much lower than they had been — and were almost certain to remain so for the rest of the year.

“The cold reality which the whole community must accept is that New Zealand’s income this year will be much less than it has been during the past two years — and all of us must accept some reduction in real terms of our present very high

standard of living,” Mr Trotter said.

“Even so, our standard of' living will still be high, and! some reduction ' in consumption will do us no harm.” Mr Trotter said that all New Zealanders could make a contribution to the common good by pulling together, avoiding sectional strife, and by making a real effort to increase the nation's productivity. He said that the prosperity and growth of agriculture — which produces 80 per cent of our overseas exchange earnings and has greater potential than any other sector of the economy to increase these earnings — was of vital importance. “At the moment agriculture faces a crisis of confidence. The farmer is at the end of the line and must bear the full brunt of price falls and cost increases.” He said that the corporation’s studies indicated that many farmers were unlikely to break even without defering essential maintenance and fertiliser. “As an aid to restoring confidence, farmers must be able to restructure their permanent debt on a reasonable and long-term basis and should, similarly, be able to borrow fbr development and live stock increases.” The very urgent remedy, he said, was the provision of adequate funds to the Rural Banking and Finance Corporation for this purpose. “A decision on this matter by the Government should not be delayed, as farmers are making critical decisions on next season’s expenditure now.” Mr Trotter said he believed that farmers should

initiate discussions on the difficult and controversial problem of stabilising prices for their major products, and said that although it seemed like anathema to farmers, if they did not take the initiative in suggesting steps for stabilisation, it could well be impressed upon them. “I am suggesting that it is (unfair to expect the farmer |to bear the full weight of the reduced income from overseas exports — that other sections of the community, including wage and salary earners, should be prepared to make sacrifices for the common good — and that long term finance must be made available to farmers if the crisis of confidence he faces is to be met,” Mr Trotter said.