Farmers start to investigate stabilisation

Press, Volume CXV, Issue 33815, 11 April 1975, Page 7

Farmers start to investigate stabilisation

I he junior vice-president of Federated Farmers of Xew Zealand. Mr J. C. (John* Andrew, told farmers at a meeting in Christchurch last v\eek that it would he most helpful if they would try to come up with the sort of criteria that they would wish to work under.

The meeting was called bv Federated Farmers, and members of the electoral

committee of the Meat and Wool Boards to receive information about possible income policies for farmers. including the Zanetti report.

Thep their leaders would be clear what the rank and file farmers wanted and what they (the leaders) should do, said Mr Andrew.

Mr G. K. (George) Stephenson, chairman of the Dominion dairy section of the federation, expressed similar sentiments when he told his listeners that it was their job to let the leadership know through their branches and up through the sections what they wanted in the wav of an incomes policy. Understandably much of the attention of the meeting was given to the recently issued report of the farm advisory committee, sometimes cailed the Zanetti report. One of the purposes of the meeting was to explain aspects of the report. The meeting at the same time highlighted some ,of its weaknesses.

Mr Stephenson sajd that an essential feature of the exercise was the size of income left to the farmer. And what could be a highly acceptable income to a farmer in India would not be acceptable to a farmer in New Zealand. sMr Andrew said that stabilisation was not just a way that the industry could be stabilised and this would produce the cure for all of New Zealand’s economic problems. On the suggestions contained in the report for buying in and selling all produce under commodity pooling arrangements, the Federated Fanners spokesmen said that this was . entirely up to the producer board or commodity interests concerned and not for the Zanetti committee to pass judgment on. Mr Stephenson said that the Zanetti report had come out against a costplus system for agriculture, in that it was “not on” under an export market oriented farming economy. Among the big audience was a former Dominion president of Federated Farmers. M A. C. Begg, who indicated that the report very much emphasised that farmers would have to live on earnings.

The Zanetti committee has proposed that a Pastoral Industry Pricing Authority should be set up to oversee the setting of prices for, meat, woof and dairy produce with three committees under it — one each for wool, meat and dairy produce — to initially recommend the prices that would operate for a season. Mr Andrew referred to the first — P.I.P.A. — as Peepa — “it might be that’’ — and the other committees as the "minipeepas.”

Mr Stephenson said that each of these organisations would be made up of three Government representatives with one representa-

tive each of the Wool, Meat and Dairy Boards with an independent chairman, and as they read it the Government representatives on each would be the same people so that

“they must exert tremendous influence.” There was a wry com-

ment that the Dairy Board chairman, Mr A. L. Friis, who recently verbally chastised meat and wool interests for not earlier coming round to a stabilisation scheme, would hardly be happy with the prospect of two meat and wool farmers deliberating over the dairy price in a committee on which there was only one dairy farmer. Over all this the Zanetti committee has also proposed eventually a Pastoral Industry Co-ordinating Authority to co-ordinate the diverse elements in the industry. Of this the structure was unknown, said Mr Stephenson. It would cover evervone from the farm to

the market — the producer boards. Government, freezing workers and even the Northern Drivers’ 'Union, he said.

And while Dr Zanetti has alleged that there is excessive fragmentation of organisations in the industry, Mr Stephenson said than the structure proposed was complex whereas the present arrangements were simplicity.

Concern was expressed at the removal of the producer boards down the chain. “More and more people are making decisions that will not affect one bit their incomes. It is essential that we should be right in on those decisions as those whose incomes are affected,” said Mr Stephenson.

It was noted by the Federated Farmers team that the committee was proposing the phasing out of farm subsidies, with all support to the industry being given through price support. This; it was pointed out, was giving away something that was known and remained substantially unchanged from year to year, apart from some Budget modification, for a commodity price system that would be subject of an annual wrangle. And Mr Andrew noted, too, that under such a system of directly supporting or subsidising prices New Zealand could be classed as “a dumper” of produce on world markets.

“We have suggested to Dr Zanetti — how do you overcome that?” Mr Andrew mentioned that the desirable level of financial backing for the proposed pricing system was the equivalent of six months or a year’s value of the three commodities .— of the order of slooom. And where was this coming from he was asked. The committee had not fully explained this, he replied.

Mr Stephenson said that the stabilisation buffer accounts for rhe various commodies were concerned basically with exports and allowing for processing costs the annual value of these at the farm gate could he about s7oom.

He noted that account had also to be taken of the advantages and disadvantages of credits in these accounts — if money was left in for five years at 5 per cent they would be losing out badly, and in deed it would be hard i invest to cover inflation. Mr Andrew said that tiprices could' be set withou regard to the stare of th

particular commodity buffer account — it would nomatter whether it was it credit or not. Dr Zanetti and his committee has proposed that the surpluses accumulated in the buffer accounts during good years should be segregated from other foreign exchange reserves and only' released into the banking system when they are required to pay out to farmers again — a counter to excessive spending on imports in good times and therefore and antiinflationary measure.

It. was certainly desirable that the funds should be put somewhere so that they could only come back through the stabilisation system, said Mr Stephenson. and so that, they could not be used by the Government or the nation, but where on earth was it going to be hidden — perhaps put Jn a little bag with a long string and sunk in the Pacific.

He could not see the Reserve Bank or the Government “having on” a situation where S3ootn, S4oom or SoOOnt was stacked away like this. A member of the audience suggested that any surplus funds were capital and as such should be available for investment in further production. He urged that farmers should seek a statutory negotiating position. Would farmers be pushed into such a scheme? Mr Andrew said that the Minister of Agriculture and Fisheries, Mr

Moyle, had said that no plan would be foisted on the farming industry and there would be plenty of time for consideration of it. But at. the / electoral committee of the Meat and Wool Boards he had said that he wanted to see progress — there was no hurry but he wanted 'o see something by July (laughter).' The Government. - said Mr Andrew, was hoping to get some, agreement on stabilisation in the fairly near future — it wanted that in reasonable time before the elections in November. Mr A. F. Wright, senior vice-president of Federated Farmers of New Zealand, put the position bluntly. He said that “when we dis-

cussed it we made it clear that stabilisation involves the whole community —

we are part of rhe community and if we have tc have stabilisation then the est ol the community hould do likdwi.se.

We can make up our linds in the time that we ee fit." He said that they ould not afford to make a lurried decision that could hange the pattern of farming in the country for .everal 'generations. Mr Stephenson emphasised that the industry was in a position of strength. Farmers’ incomes were down but overseas reserves were also down and the nation had borrowed against future potential production. Present production was barely enough to pay for imports let alone service the borrowed money that would have to be repaid. The only source of revenue was agricultural production and without the willing assistance of the industry and its ability to produce and increase production the whole country would be sunk.

With farming income down and predicted to be down again in the next, year, it was not a good base to increase production from so. farmers were in a strong position to say that there was no hope of getting the desired production unless the measures to increase farming incomes were sufficient.

Did Federated Farmers support stabilisation or the present system?

At this stage Mr Andrew said that they wanted to try to explain what was involved so that . farmers could assess for themselves what the situation was.

“We are not coming here with any proposal and are not asking for a resolution or expression of opinon. At this stage we do not intend to show where we stand.”

Mr Andrew told a questioner that they were not opposed to the issue going to a referendum if that was necessary.

Mr J. R. Cocks suggested that farmers should be given the option each year of deferring taxation in a good year on a proportion of their income. This, he said, would oromote a more even pattern of development. It would give increased liquidity and more time to plan and develop and spend the money, Mr A. L. Mulholland said he did not see one reference to “arable'’ in the report. He suggested that people might look at stabilisation in the wheat industry “and the utter chaos it. is in.”