FARMERS' POSITION

Evening Post, Volume CXII, Issue 7, 8 July 1931, Page 8

FARMERS' POSITION

TWO ALTERNATIVES

LOWER COSTS OR BETTER

PRICES

The- relation of .the prices receivod by the farmers for their produce to the general unemployment problem was dealt with by t'ho member for Dunedin West, the Hon. W. Downie Stewart, in the course of a speech in the House of Representatives yesterday. Mr. Stewart said he thought it was generally admitted that if the farmers' prices rose ov their position was materially improved the- unemployment problem would very quickly disappear. There were only two methods by which the farmers could be restored to a position in which they would not be faced with worst circumstances every day. So far as he could gather, the farmers who were under mortgage were numerous, and they were in such difficulties that they were only remaining on their properties at the tolerance of the mortgagees or from the fact that the mortgagees could not see they would gain by turning the farmers off. The alternatives for improving the farmers 5 position were to get costs down, or to improve prices. It was obvious that the process of getting prices down -was going to be a very slow one; they were not coming down fast enough to save tho farmers in the present conditions. • Because of that fact, it was interesting to note that. all sorts of schemes were being put up for the purpose of currency stabilisation. AT A DISADVANTAGE? • ; It was being suggested, said Mr. Stewart, that the fanner should get a groat .deal more than the 10 per cent, exchange premium in selling his produce abroad—that if tho exchange was allowed to swing free he would get the benefit of tho 30 per cent, premium the same as the Argentine and Australian producers. .: It was being argued that the New Zealand farmer was being undersold as compared with the Argentine and Australian farmers. It was wellknown that the depreciated currency for the time being, benefited the exporter. When ho sold his produce on the London, market he was credited with the amount due in the English market,, and when ho got Ms money he found that for every £100 in England; he received £110 in New Zealand. It did not appear at first sight that it; ■would be a boon to the farmers if the ; exchange rose to. anything like what! gome people hoped, and. on tho other; hand it Would be very much open to: criticism if the exchange was kept at aa abnormally: low premium. SERIOUS' CONSEQUENCES. Mr. Stewart said he did not think; it was. at all - obvious, however, from; the trading figures, that the exchange would reach to a 30 per cent, premium, as in. Australia' and tho Argentine. He believed that the 10 per cent, premium in ; respect of New Zealand had been brought about largely as a result of our connection with tho Australian banks. Assuming that the rate rose, the consequences, would bo very serioua ' from the national point of view, ami particularly from, the- point of view oi ' the Minister of Finance. Obviously, any large increase in the exchange rate ■ would heavily curtail importations. This j would knock the Customs revenue to j bits, and the revenue was bad enough already. • Mr. F. Waite (Reform, Clutha): "A good job.-" Mr. Stewart agreed that that might he, from one point of view. It was also obvious, he said, that the Government's costs in; remitting interest on loans to London would be trebled at least if the exchange rose as was being suggestedj and enormous extra taxation would have to be levied. Mr. Stewart said he was atill of opinion that it was not possible to force land settlement while prices were falling, and that the most that could be done with the unemployed in, that direction_was to use them in preparing land for future settlement. The per-; centage of tie unemployed who would be absorbed as farmers was so small as not in any way to afford a solution of the problem.