FARMERS' PROBLEMS

Evening Post, Volume CXV, Issue 144, 21 June 1933, Page 10

FARMERS' PROBLEMS

LOW PRICE OP PRODUCE MR. H. D. ACLAND'S ADDRESS HIGH INTERNAL COSTS "The past year has been one of very grave difficulty to shecpowners, the prices of wool and lamb Having proved lower than those even of last year, while costs have proved to be rigid at approximately last year's levels, said Mr. H. D. "Aclaud in his presidential address to the conference of the New Zealand Sheepowners' and Farmers' Federation today. "Heavy supplies from Australia and Argentine have depressed our lamb market, while apparently, world conditions have not yet sufficiently improved to allow of a rise in price for our primary products' on the British market. "We are still faced with the two major problems mentioned in my address last year, namely: (1) high internal costs, and (2) low overseas prices. "We have cut oar costs, within tho boundary fence to a point where in many cases production has had to suffer, and not only have we been forced to live on capital in a • currency, sense, but we also have been forced to allow our farm lands to deteriorate' owing to want of the necessary finance to rejuvenate our pastures ■by top-dressing, re-sowing, ,etc. ■ ■ . ■ . - . "This is mortgaging the future with regard to the productive value of our farms, but so long as the present conditions remain with us, it would appear to be unavoidable. "With costs'on the farm nearly 50 per cent, above pre-war, and export prices approximately 20 per cent, below, there does.not appear to bo much,immediate prospect of relief to, us, so far as the Dominion itself is concerned. ,"It would appear" that we must look further afield for relief, asit is generally admitted that the fall in'the price of wool, meat, and but.ter overseas is the mairi cause of New Zealand's financial troubles. . "This deflation of-the'values of r.ea'l wealth measured in currency, has destroyed millions of capital values ia farms all over New Zealand, and has brought ruin and bankruptcy to thousands o-f good men working the land. Our towns and cities are now feeling the full force of slump. conditions, as a result of the loss of purchasing power, of the exporter, ■which previously was the measure of profit from the working of his farm. As we know, profit from this source is non-existent today." Mr. Acland quoted figures showing a drop in the price of New Zealand's wool and dairy produce. Shipping freights were 50 per cent, higher for meat than in 1914, and cold storage in London from '58 per cent, higher for the.first month to 40-44 per cent, for subsequent months. . , . ■ ■ THE RATE OF EXCHANGE. "Owing to the pressure of economic fact," stated Mr. Acland, "the Government in January last was forced to come to an arrangement with the'banks, raising the rate of exchange to 25 per cent. For some years prior to this arrangemont, exchange had been artificially pegged against the farmer exporter by Government borrowing in London, and for tho 1932 season, by an Order in Council,. which legal opinion advised was invalid, forced upon the Government at the instigation of the banks „ ' .' ■ "Although exchange has depreciated the New Zealand & by 15 per cent, since January in comparison with England, which is on a sterling basis, yet internally'wfthin New Zealand it is substantially correct to say. that the New Zealand pound has not fallen in value and the cost of living has not risen. , "Pegged low, exchange in New' Zealand in 1932 provided an immense advantage to those countries in their overseas trade in competition with New Zealand farmer exporters. Since then, world prices for our produce have further receded, and crossbred w.ool last March was in terms of gold, selling at about 2}d per lb." Mr. Acland said that the1 demand for gold payment for Avar debts, etc., had upset the world's currency system. The' matter was .an international one, and he hoped for good result from the London Conference. Mr. Acland said it • was appreciated in New Zealand that our Public Debt service, costs must bo reduced if our industries were to survive on present standards of life. ■ "CANNOT PAY IT." "It cannot be too often pointed out," said Mr. Aeland, "that the farmer mortgagor today is paying, or liable for, in kind (such as oats, lamb, wool, or butter) interest rates and taxes from two to four times as much as he paid or was liable for five years ago. He cannot pay it, and it is no good pretending he can." Mr. Acland said that as a result of the action of financial institutions during recent years,, there would appear to.be no question that legal obligations entered into under quite, different conditions of • world- trade and price levels a 1 few years ago could not be. considered just today from an equitable point of view. ' - ■