FARMERS' SUBSIDIES

Evening Post, Volume CXV, Issue 68, 22 March 1933, Page 8

FARMERS' SUBSIDIES

"FOR COUNTRY'S GOOD-

REPLY TO MANUFACTURERS

THE UNION'S CASE

In refutation of the statement made by the-Sew Zealand Manufacturers' Association that the farming community is being pampered to the tune of £12,000,000 by the" general public, the New Zealand Farmers' Union, in a statement today, says:—"lt is quite apparent that the Manufacturers' Association, in its desire to have a good 'whang' *at the farmer, has raised its sights far too high, with the consequence that it has considerably overshot the target. Moreover, as the whole of the expenditure quoted in the statement has been ratified by Parliament —the representatives of the public—there should be no criticism coniing from a section of that general public. "The statement issued by the New Zealand Manufacturers' Association ' that £12,000,000 of the public's money is spent annually in pampering the farming community is both erroneous and fallacious, as no allowances have been made for the values of benefits received from subsidies allowed. Modern business is conducted on the principle that it is sound to spend £100 to get in £150, and that principle permeates the granting of all subsidies to the farming community.

"The following self-evident truths should be noted:—

(a) Out of a total export value of £34,319,000 in 1931, the produce from our farms was worth £33.023,000, or 96.2 per cent, of the total; extinction of the farming industry would mean national bankruptcy.

(b) The farming industry is in danger of extinction if present prices for primary produce and/costs of production continue much longer.

fc) "The New Zealand farmer is compelled to sell on a world price level, but his costs are assessed on the high New Zealand price level. The index of export values of farm produce is 776, whereas that of farm expenditure is 1250. In other words it costs about. £161 to grow £100 worth of produce. On the other hand, the New Zealand Manufacturers' Association sells its output on the local market based on the New Zealand price level. .

(d) "Any concessions made to the .farming community to help to keep the industry going are economically: sound froto a national point of view,-while concessions made 'to some, of, our struggling sec-r bndary industries in. the.form of protective tariffs are economically unsound." Commenting on the various items submitted; by the Manufacturers' Association, the Farmers' Union says:—•

LIME AND FERTILISERS.

' "Concessions on lime and fertilisers— £334,000—These figures have been taken from the Government Estimates, but it is not expected that the actual expenditure for the year will exceed £310,000." It is pointed out ; that had it not been for the increase in the output of wool, lamb, and dairy produce due to the use of fertilisers, New Zealand's condition would have been more perilous, and hundreds of farmers would have had to walk off their properties. Lime is carried free up to 100 miles. The Department of Agriculture refunds 60 per cent, of the railage on fertilisers to the Eailway Department. Forty per cent, of the railage is paid by the farmer.

the past two years the small farmers of the Dominion have been unable to buy fertilisers; recognising that the farming industry had to be saved,, the Department allowed the superphosphate, manufacturers: a subsidy of 11s a ton as an aid towards the purchase. Owing to the raw phosphate rock being obtained cheaper since July last, this subsidy "has now been reduced to 8s lOd^ a tori. Notwithstanding the concession, farmers have still, to pay £4 a ton at the works for superphosphate. From the concessions totalling £310,000 should be ..subtracted the values of benefits accruing therefrom viz. increase in railway freights, in employment, and in national wealth.

HERD TESTING,

"2. Herd Testing Subsidy— £7700.—Herd testing is used to increase the production of dairy herds. Last year, 271,404 cows were tested in the Dominion. The farming community has to pay the expenses of testing, which amount to an average of about 5 per cow per season under the group system. The Government subsidy is. partly paid to the Herd Testing Associations to help to meet overhead , costs, and partly to. the herd owners to reduce costs of testing. Last year a refund of od per cow tested was made.

"3. Statutory Grants—£33,4so.—(a) The Massey Agricultural College Act, 1926, permits of a subsidy being paid but of the Consolidated Fund to the llassey Agricultural College for maintenance purposes. This bears the same relation as grants to university colleges made by the Education Department, (b) The Rabbit Nuisance Act, 1928, permits of a subsidy being paid out of the Consolidated Fund based on the total rates collected by the fifty Rabbit Boards. These boards levy rates for the destruction of rabbits either on fa) the rateable value of the property, or (b) an acreage basis, or (e) the number of head of stock carried on each property. If the Government were responsible for rabbit destruction the annual cost would be far in excess of the £11.500 subsidy, (c) Compensation for condemned- stock — £12,500. The Stock Act, 1908, provides for the Department of Agriculture paying half the fair market value of all stock condemned on farnis by stock inspectors. The principle behind the section of the Act was that this payment would act as an incentive to reduce stock diseases, which was in the interests of the country. Owing to low prices ruling for stock, this estimate will not be fully expended.

LIVE STOCK DIVISION

"<L Salaries:, of...Live -Stock Dairy, : and Fields Divisions, Department ,of Agriculture—£ 189,000.—There Is a glaring error here, as the. Government'Estimates show the salaries for 1932-33 to be:—Live Stock Division, £73,582; Dairy Division, £39,534; Fields Division, £25,000; total £138,116. As these salaries include those of poultry experts, meat inspectors, and dairy inspectors who are working for the general public, it is unfair to place the whole expenditure of the Agricultural Department at the door of the farming community. ;

''No allowance was made by the New Zealand Manufacturers' Association for the earnings of meat and dairy inspectors (£41,500) and for the grading fees on our dairy produce £25,500).

■"5. Unemployed Labour—£300,000. —This is a wild guess unsupported by any facts or figures. Credit should be given to the farming community for absorbing some unemployed during the existing industrial crisis. Without the concessions made for such employment, no labour would have ,bcen absorbed, and this would have proved, a national calamity. Many townspeople have taken advantage of the concessions offered by the Unemployment Board—and rightly so.

HIGH EXCHANGE. «

"fi. Exchange Benefits—£B,ooo,ooo.—Such a wild extravagant guess, unsupported by any form of proof, warrants little comment. The imposition of. a high eschange acts as an extra protective tariff on local made goods, so that members of- the New Zealand Manufacturers' Association should participate in the resulting benefits. "7. Local Rates Relief—£2so,ooo.—This grant was made last year so that the various County Councils could carry on. Owing to the low ruling prices forproduce a big percentage of our farmers cculd not make both ends meet, and local rates were left unpaid.

BRITISH PROTECTION

"8. Tariff Protection in England on Butter and Cheese.—This is one of the humorous items in the statement issued by the New Zealand Manufacturers' Association, which, living in a glass house of protection, should not throw stones. During 1932, the sum of £303,709 was paid as duty on imported ready-made clothing, £111,575 on imported hosiery, £91,572 on imported boots and shoes and £90,804 on imported woollen piece goods. The purchasers of these four classes of goods therefore had to pay nearly £600,000 extra' through tariff duties for these goods in order to help-to 'bolster up'these indus-

tries in New Zealand. In addition, the vpJue of these articles manufactured in New Zealand in 1931 was £5,017,000. As local prices are assessed on landed prices of imported goods plus tariff duties (omitting exchange), it has been calculated that a further £800,000 are added on through existing Customs tariffs. ' This means that the public of New Zealand are paying about £1,400,000 more for these four classes of goods than if no tariffs existed.

WHEAT DUTIES.

i 9. "Slidina Scale of Wheat Duties.— The New Zealand Farmers' . Union is> agreeable to the withdrawal of the protection on wheat, provided the duties on other comniodities are removed also. Owing to the high costs of production in New _ Zealand, the farmers in the wheatgrowing areas were unable to grow wheat without the guarantee of a payable price. It ill becomes the New Zealand Manufacturers' Association to cavil at tho wheat-farmers getting a little of the good things received by the former.

''10. (a) Customs duties on articles used in farming. (b) Exemptions from sales tax on farm requisites.—These are practical methods of lowering the index of farm expenditure, which, as has been shown previously, has remained too high for most farmer's to make a living. •'ll. Exemption from Income Taxation.— There is no need for the New Zealand Manufacturers' Association to worry over this, as the New Zealand Farmers' Union supports the principle of taxation through income." '