Incomes policy taken further

Press, Volume CXV, Issue 33958, 26 September 1975, Page 6

Incomes policy taken further

After discussions, which have been going on nearly 7 all of this year at all levels in the organisation, the Dominion council of Federated Farmers last week came down with what is presumably the final version of its farm incomes policy.

The policy took shape at the annual conference of the Dominion meat and wool section and at the Dominion conference of the organisation and then went back to provinces for a final review before being given its final form. The final version places much emphasis on income sufficiency for fanners. Price smoothing schemes are tucked on a little casually at the end, and there is a reference to “any commodity price smoothing schemes,” but it is nevertheless acknowledged that they do form an essential part of any farm incomes policy. The federation’s policy now reads as follows: “(1) the aim of the federation’s farm incomes policy is to obtain sufficiency of incomes for farmers, thereby ensuring continuing growth of production and earning of the overseas exchange needed by the nation. “(2) that Federated Farmers initiate an annual review of the state of farming and after consultation with the producer boards formulate. where necessary, a case for national investment in agriculture, the objective of which should be to attain sufficiency of incomes for farmers.

“(3) that in order to attain the objective in (2) above consideration be ’given to the establishment of machinery under which direct formal negotiations would take place with the Government. “(4) that the basic criteria to attain the objective in (2) above include (a) investment needs of the agricultural industry; (b) levels and trends of production; (c) cost increases on and off farms; (d) actual levels of income; (e) relative, levels of incomes; and (f) market conditions. "(5) that a revision of the method of equalising individual farmers’ incomes be an integral part of the federation’s incomes policy. "(6) that any commodity price smoothing schemes should be based on market returns and the determination of these prices be the responsibility of the producer boards concerned. “(7) that the elements of price smoothing and sufficiency of incomes must form separate but essential parts of any farm incomes policy. The acceptance of price smoothing mechanisms without a procedure for establishing sufficiency of farmers’ incomes will not ensure the level of agricultural investment required by the nation.”

After the policy had been handed on to him the Minister of Agriculture and Fisheries, Mr Moyle, was quoted as saying that his initial reaction was that he could find no great differences of viewpoint between himself and the federation and no disagreement with the principles it contained. It would be acceptable to the Government as a basis for negotiation. He said later that he felt that the basis of income smoothing had now been accepted by the federation, which was in line with his own thinking.

Whether there was a gap between returns and what was regarded as income sufficiency was something that only time would prove or disapprove, he said. With price smoothing schemes in practice, if not in name, operating in the wool and dairy industries and soon to be unveiled in the meat industry, Mr Moyle said that he felt that there was reason for a great deal of satisfaction about what had been achieved in this way to date — some he felt'would be a little surprised at the progress that had been made.

Mr Moyle said he did not think that he had applied pressure to attain these ends, though he agreed that he did not think that there had ever been any doubt about what his view was.

But it would take two or three years to convince the meat and wool sector that what was being done was the right thing to do. There was a Jot of scepticism about going into debt with the Reserve Bank — fears

of someone having a lien on their properties or foreclosing on them. The dairy industry held quite a different view.

Mr Moyle said he saw price smoothing as averaging prices over time — not setting minimum prices. The meat and wool sector tended to take a pessimistic view of prices and to project these sort of prices forward into the future. It was his view that certainly for wool and also for meat that present prices were in the lower 25 per cent of future prices. A farmer view of the federation’s new policy is that it does not contain much that is new. The federation has been constantly reviewing the state of the industry, but now perhaps an attempt is being made to establish some formal machinery for the federation to annually put its case to the Government—to put the “wrangle” on a more formal basis.