The Dominion. FRIDAY, DECEMBER 9, 1938. “INSULATION” AND THE FARMER

Dominion, Volume 32, Issue 65, 9 December 1938, Page 10

The Dominion. FRIDAY, DECEMBER 9, 1938. “INSULATION” AND THE FARMER

4 It is not surprising that the announcement of the Government s new financial and industrial policy has been. S w bv the sookesmen for the farming community. The programme as Silted by tte Minister of Finance and the Prime Mmrter is no respect advantageous to primary producers; on the contia y, o weaken their position and intensify their problems. Any pioIramme having this effect is undesirable and fundamentally unsound g™ as New Zealand is concerned It cannot be just,find unless rural interests are being fully protected and fully catered for. Those interests are vital to this Dominion. , It may be said that for the time being the Governments concern is not with the primary producer, but with the economic position of the country as a whole, and the need to divert to our co manufacturing industries a proportion of the money now spent on n - ports It mav be said, in other words, that the primary produces expected to hold the fort while the Government conducts an exper - mental campaign in new fields of domestic economy. Bit is the post Don of the primary producer such that he can assume this role? I it rood business to keep him on the defensive and place him under greater difficulties when the real wealth and welfare of the Dominion are so dependent upon his efforts and the progress that he makes? To “Stempt to build New Zealand” (which is Mr Savage’s description of his ffisulation policy) without proceeding at the outset to rehabihtate on greatest industiies-to attempt to bu Id new industries at th expense of primary and essential industries-is to undermine the real foundations of our present and future prosperity. Unhappily, there is little doubt as to the effect of the new policy on the farming community. Al worst, it can lead o> resmeted markets overseas and a diminution of the goodwill of both British and foreign customers. At best it must cause an eternal cost mcicase against which the farmer has no. insulation whatever. As M . W.- J. Polson, chairman of the Primary Producers Federation, says “It has apparently become the farmer’s fate to buy at high puces and to sell at low prices. . . . The farmer is caught in a trap conceived in antagonism to, and devised in defiance of, economic laws .. . these are strong words, but the facts of the position justify them. On all sides the primary producer is hemmed in by high costs. Labour costs are cripplingly high, transport charges are up, and local body lates tend to increase. The producer is doubly taxed (on land and income), the cost of the machinery and the raw materials he uses is hig , and, in addition, he is obliged to share with the rest of the community the burden of a State scheme of labour absorption that robs him of the productive man-power he so badly needs. . That is the position at present. What is wanted is relief, not fresh burdens. The outlook for the primary producer in an era of import restriction—an era of complete trade and financial control fo. the salvation of the State purse-was described m a statement by’the New Zealand Fanners’ Union, published on Wednesday. I his pointed out that there were two price levels for the farmer—the present inflated New Zealand level (which he has to pay), and which could be expected to move higher, and the level for the farmer s produce (which he receives) : It will be quite evident (the statement proceeded) that if there is a restriction of imports, and the present rate of Government expenditure in New Zealand continues, the New Zealand price level must rise very considerably; particularly so when Remembered ’ that the Government intends to raise an-internal loan . . . ’ l 'lncn will have the effect of liberating still further purchasing P°y er New Zealand, which will have no outlet such as previously obtained in the purchase of imports . . . There are, too, other factors with which the primary producer may have to contend. It is not improbable that a restriction of imports, and-a consequent restriction of cargoes from overseas will lead to a revision of freight rates. Again, it is evident that, unless a completely new employment policy is introduced by the Government, the encouragement of manufacturing industries, excellent though that may be in itself, will tend to reduce still further the farmer s chances o obtaining labour easily and at a cost he can afford to pay. . The problem of New Zealand’s economic debility is not being squarely faced. It has been brought about mainly by financial excesses. and till these excesses are checked —till costs and pr’ces are brought into proper relationship—the primary producer will be no better off. Import restriction will leave him worse off, and his plignt in the end will be shared by the community as a whole.