NO CHANGE PROPOSED

Evening Post, Volume CXXIV, Issue 63, 11 September 1937, Page 13

NO CHANGE PROPOSED

THE GUARANTEED PRICE

BIG DEPUTATION TO MR. NASH

After arguing about ihe inadequacy of the guaranteed price for more than two hours yesterday afternoon, a representative deputation of dairy farmers' interests was told by the Minister of Marketing (the Hon. W. Nash) that the price would not be altered. The deputation presented a Dominion-wide protest. In his statement to the Minister the Hon. F. Waite, M.L;C, who headed the deputation, said that it represented .factories from Auckland to Southland, and with these were associated the New Zealand Farmers', Union and various dairy producers' organisations.

The deputation presented an elaborate case, and Mr. Nash's reply at times developed into cross-talk between himself and various members of the deputation who were anxious for information on points of detail. ;

The Minister of Agriculture (the .Hon. W. L.'Martin) was present, and Nthe Minister of Education (the Hon. P. Fraser) attended for part of the time. Messrs. W. J. Poison, M.P., K. J. Holyoake, M.P., J. G. Barclay, M.P., and A. C. A. Sexton, M.P., also attended. ■ '•.-.'■■■■

Mr. Waite said that the. movement leading to' the deputation really started in Southland. At meetings in Southland dairy factory directors came to the conclusion . that the guaranteed price was not adequate. This feeling had spread until the South Island. Dairy Association took the matter up arid the New Zealand Farmers' Union executive became associated with the others.^

Mr. Waite said that at a meeting of the Dominion executive of the New Zealand Farmers' Union held in Wellington on Wednesday last, the following resolutiOn ; was passed:—

That the price for- dairy produce, as recently announced by the Minister, of' Marketing, is totally inadequate, and in no way fulfils the proI mises made by the Government to I the dairy farmer.

.The meeting was representative of all parts of the.Dominion; arid representatives of the Dominion executive ■were asked ip convey this resolution ■of protest to the Minister of Marketing.. •

RELEASE OF REPORTS DESIRED. "First ive wish to stress the fact," said Mr. Waite, "that the report, or reports; of the investigating committee, have not been made available to the industry; consequently, we are not in a position ' critically to examine the methods used hi arriving at the price determined-, on by the Government. We cannot believe that those on the committee whovare practically conversant with, farmers' costs could arrive at an increase of slightly less than 3d per Ibof butter, to be precise, 11-16 d.

"Two' organisations—the New Zealand Co-operative Dairy Company and the New Zealand Farmers' Union— both' submitted reports to the committee showing that increased costs up to*the end. of the 1936-37 season amounted to- 3d per lb over-, the previous year. The difference between 3d- and 11,-16d'is. very great, and it seems Incredible that an error of this magnitude' can.have been made by ■these two bodies. It may be,that the bases of calculation have been different, but we : cannot make ariy fury ther on the position ihe full reports are'released.,}.We ask that the Minister release the full reports without delay.' "As the working" dairy farmer sees the position, the increased price is about 3d per lb of butterfat. Costs in the butter • factories for the 193&-37 season'are up. at least id per lb of butterfat: calculated over the whole; season's production; arid these increased costs were current for only part of the season. The yearly cost on the last season's basis would ibe nearer. Jd iper lb.-/ .. , . ■ "Costs oh the farm,: -whether the statisticians or accountants can find •thCse increases or not, are, to every fanner's knowledge, definitely yip. These increases are difficult to quote with exactitude as Dominion averages, but every farmer knows that the increase is appreciable, and in many eaies that we have investigated the increase is Jd'per-lti of butterfat. Taking the increased dairy factory costs and farm costs together, the increase is' certainly more than 3d, thus more than cancelling out the increase of id per lb of butterfat. ' ';.; "But the position is much worse than , that. Employees' in dairy factories are now asking the. Arbitration Court for increases.; When increases are granted — a$ it appears they will be—then -the dairy industry will.be loaded with further increased costs, for which ho provision is made, in the new guaranteed price.' ..... -;'. .• •■ ■..-•.,• 'Turtfter, employees on dairy farms are to receive increased wages. The Minister of Labour, before he went abroad, informed representatives of the New Zealand. Farmers' Union that the new guaranteed price .would include an. increase which-would: enable -the dairy farmer to pay. at least £2 5s a week, plus board. That is an increase of 2s 6d a.week. If this is the case, then for the season 1937-38 there will be a further load of about Jd per lb of, .butterfat. and no provision to meet if .••■•-. ■■■.-, "So we say that ..the 11-16 d increase In the price for butter will not meet increases in costs made during last season, and, in addition, the further increases on account of factory and farm wages will have to come "out of th« payments received, actually leaving the dairy farmer with less net income than he had. during the.past season. , SEASONS FOR PROTEST. "We nave ■ carefully considered the wjiole position, and we contend that:—■ (a.) The price announced will not allow.the dairy farmer to pay competitive rates7 for wages, which alone . can- : ensure us < efficient labour on : dairy-farms. The farmers' wives and. children wjll be forced info the milking shed as never before. ; ' (b)The price announced will not I ailojv the dairy farmer reasonable interest on the capital invested in •' his farm and stock. Further, f arm- ( ers will not be able to: find anything .' to rfeduce a table mortgage, much ' less pay off anything on a flat mort--1 gage. v. '. " ; ■.■.'. (c) The .price announced will not enable the dairy farmer to meet the increased costs that will inevitably be piled on to the industry in the coming season—in addition to increases in dairy factory wages and farm employees' wages, there will be .increases in all items, concerning the cost, of living and production. County rates are generally increased, in some cases very considerably— ■we have an instance in one district of an increase of l-3d per lb of butterfat (d) The price announced does not appear to give the dairy fanner payment at even the standard rate of unskilled workers. We would point out that the farmer is a skilled worker, has capital invested in his farm, and must have managerial ability. He works much longer hours than.. the workers enjoying award rates, yet his remuneration is to be lower1 than the standard set for xtn- . skilled workers. To talk about "a J

r • reasonable standard of living" for the dairy farmer, or to go so far as

to refer to his "standard of comfort"

is to the men and women engaged in the dairy industry nothing but a cruel mockery.

"For the foregoing reasons, and for others which we recognise it is needless to reiterate, we say on behalf of the dairy farmers of New. Zealand that the price announced is the complete 1 negation of that social justice promised the dairy farmer. ' BROADCAST FACILITIES. "Although the Government takes the fullest opportunity of broadcasting : over the national broadcasting system a full statement of the Government's 1 case and inferentially a criticism of the statements of recognised farming . organisations,"' said Mr. Waite, "we . regret that any broadcast criticism of the guaranteed price is denied the organised farmers of the Dominion. Both in Auckland and Dunedin recently official broadcasts by the Farm- ' era' Union have .been censored or refused, and we feel that the Farmers' ' Union is being ' denied a privilege which is freely availed of by the Gov- : eminent. If the Government is to use ■ the radio as a means of endeavouring : to confound the dairy farmer in what :he believes to be his legitimate demands, then we, as an organisation, request the same privileges of speaking to the people as the spokesmen for the Government have. . PROMISES TO THE FARMER. "In conclusion, we would remind the ' Government that the following, statements have been made by the Minis- < ter of Marketing: (1) 'Price must cover all costs, with a reasonable standard of living, if we desire the farmer to continue to produce? We say that the price riqw arbitrarily fixed for our produce does not cover all costs, nor will it ensure a reasonable standard of living to the dairy fanner, as compared ■ with the other skilled workers in the community. (2) 'The payment to the • farmer must be measured by the same ■ tape as is used to measure the payment •to others who render equal service.' We are now convinced that one ■ measure is used for some sections of the community, while a totally differ- • ent measure is used for the dairy farmer. If "skilled workers are to : be paid 2s 9d per hour, then if a dairy farmer was paid at this rate for only 60 hours • a week, omitting any overtime, rates, : his wages would be at the rate of £8 5s per. week.

i "I'h'e. Government's,;claiin <that-,costs areallowed on'the basis of the average efficient farmer admits that the price does not allow a reasonable return for all those efficient farmers whose costs are above the average. We are of the opinion that in no other industry in which the Government has fixed prices have they been fixed on average costs. From the price announced, those conversant with, the industry know that it will not admit of. a payment rof wages to the dairy farmer and his employees on the farm anything like those'paid to the managers and employees in an average dairy factory. DOMINION-WIDE PROTEST. '■The dairy farmer is, at the present time, anxiously awaiting the full reports submitted to the Government. This is ' a Dominion-wide protest, embracing :' the .., biggest butter-manufac-turing company in Auckland down to the small but efficient cheese factories, in Southland. Associated with the New Zealand: Farmers' Union in this protest are -the North Auckland Dairy Conference, the South Auckland Dairy Association, the New Zealand Co-opera-tive Dairy C 0.,. the Wairarapa Federated Dairies Association, the South Island Dairy Association, and many individual butter and cheese factories. "To sum up the position, the dairy farmer was not satisfied with the original guaranteed price, it having been-based on. a: period containing the lowest slump :years. That original price was considered inadequate, and costs have risen alarmingly since then, and are still rising. The farmers' real problem is One of high costs, arid to use the words of a telegram we have just received .from the Federation of Dairy Factories of Taranaki asking that the full reports be published, they support us in 'any, effort to obtain a lowering of costs to the dairy industry.' Speaking on behalf of the .New Zealand Co-operative Dairy Co., Ltd., Mr. A. C. A.-Sexton, M.P. for Franklin; said that' according to an estimate made by the company almost a halfpenny of the increase in the guaranteed price would be absorbed by increased factory costs', and farm costs more than accounted for the balance. They were not asking for low Wages throughout the Dominion, but they did ask that. the dairy farmer should be placed in the position of being able to take the best .of the labour available. Mr." G. H. Herron (Southland) said that he had attended three meetings at which there were 380 suppliers, and of those there, were only four who said they thought they could live at the present guaranteed price. It was maintained that the price did not provide for- a fair standard of living. They thought that Mr. Nash was quite honest in his attempt to put the dairy farmer in a better position, but rising costs had blotted out all that was expected. In Otago and Southland there were 78 small cheese factories, and these were very necessary in the scattered areas. " Five of them had recently closed "down, and other factories were in a very serious position. They were very-much afraid that if costs were not brought down there would-be very few :of the smaller factories operating. "It will be absolutely disastrous if the guaranteed price is not increased in the South Island," said the speaker, "as small farmers will be. placed in a very difficult position." DEVELOPMENT HANDICAPPED. Mr. T. F. Paul (Southland) said that the dairy farmers felt that the first year of the guaranteed price had been more or less experimental, and that in fixing this season's price the Government would determine on a figure that would at least put the farmer on a footing with the rest of the community. Thelabour problem in Southland as far as the dairy farmer was concerned was probably more difficult than it was in the North Island. Southland was a province requiring a lot of drainage and other development, and as the. guaranteed price was at present (

it precluded the possibility of such development. They would like some statement regarding the cheese surplus for last season. It seemed that there would be a fairly big surplus in the cheese account. '

Mr. D. Rutledge (Southland) said that the Government was to be congratulated on.the way it had acquitted itself in general, but so far as the dairying industry was concerned it was not a fair thing that an employer should receive, less than the men he employed. The Government had failed to put the dairy farmer on an equal footing with the rest of the community. It seemed that the calculations had been based on climatic and other conditions in ihe North Island rather than on those ruling throughout the Dominion.

j Mr. Nash referred at the outset to | the question of broadcasting', and intimated that the Government would be glad to arrange for any statement that the Farmers' Union wished to put over the air. It did appear to be rather unnecessary, as statements about the guaranteed price would be made in the House, and broadcast, and all arguments, both for and against it, wojild be heard. "Anything that can be said that is not advantageous to the Government will be said," added Mr. Nash, "and anything that will support the Government's case will be said, and the spread of information about the question will be through the House." Referring to the first reason advanced by the deputation by way of protest, Mr. Nash said that it was correct to say that the Government's decision regarding the price covered the payment of so much per pound of butterfat for labour. In that way whoever did the work was paid for it. Mr. Waite: We do not know that. Mr. Nash: But the Government does. I am saying that the price per pqun'l includes an amount for labour on the farm. For the first time other than last year the farmer is assured that as he works so will he be paid. Mr. W. J. Poison, M.P.: What figures are there to justify the statement you have made? We feel that costs have risen so. much that that has disappeared.. ALLOWANCE FOR INVESTMENT. Referring to the second reason, Mr. Nash said that there was an. allowance in the price for every penny that on the average was invested in the farm necessary to enable the farmer to produce butterfat. There was an allowance for ey^ery penny of capital that normally would be put into the average efficient farm. "I will give you all of those figures," he said. Mr. Sexton: You will give us the figures you thing we should have? Mr. Nash: Yes, and they will be correct. I will give you all the figures that justifiably can be given ,to justify the Government in determining the price. This is the Government's price, and the Government will. give the facts behind its determination. If the price is wrong the responsibility is the Government's; if it is right, the credit will be the Government's. There is no responsibility on any committee. It is the Government's determination. It was suggested that last year's price was based on an unfair average, Mr. Nash continued. He did not think so. The Government., asked for the avei'age price over the previous eight to ten years, and it took the highest average, that of ten years, because the period contained five boom years and five slump years. That was actually 12.73 d per pound. They decided to make it 13d per pound of butterfat. To that they added .04d. What had that meant? In Auckland there had been an average pay-out by dairy companies during the 1936-37 season of 13.58 d per pound of butterfat, in New Plymouth 13.60 d, in .Wellington 13.66 d, and in Hawke's.Bay and Gisborne 13.33 d. The average was 13.54 d. That was .27d above the best interpretation of the statement made by the Prime Minister. ■r : '

Referring- to cheese, Mr. Nash said that they had paid .86d more for cheese than for butter, and that if they had taken the average over ten years it would have been 12.73 d plus .86d, which was equal to Is ljd. They would have had to pay that to live-up to the promise made by the Prime Minister, but it was pointed out that at least ljd more should be paid, and the Government paid ljd, or, at least, endeavoured to. They so fixed the price that the average dairy factory producing cheese would be able to pay out ljd more, but they assessed the costs of the butter factory too high. They allowed 2Jd. In New Plymouth they, were less than 2d. That automatically meant that the man producing butterfat for cheese would not the- ljd promised. In addition, while production costs had increased, those in cheese factories had increased much more proportionately, so that the extra cost was greater, than the extra costs of.butter foctories, and that brought about a further disparity. The' result was that cheese producers would not get the extra l|d promised. There was a logical case to be made out for the cheese producers. The Government would do ev£rything to pay out that differential of ljd.for cheese/They could not determine that at once, but to the extent that" they could live up to < the promise they would do so. \ PAY-OUT FOE CHEESE. The Minister said that, so far as cheese was concerned, if they paid out the price on the basis on which they had worked it out, they would have to provide for a pay-out of 14.54 d. "Let me give you the average dairy company pay-out for cheese,".he said. "In Auckland the figures are 14.90 d, in New Plymouth 14.45 d, in Patea 14.58 d, in Hawke's Bay 13.60 d, in Wellington 14.57 d, and in Southland 14.62 d." A Southland member: We have a very low test. ■ . : Mr. Nash: It is, not the test; it is what you have bad. Mr. Sexton: What was the average for New Zealand. Mr. Nash: The average was, 14.45 d. Referring specifically to. nineteen Southland cheese companies whose figures he had before him, Mr. Nash said that their average' pay-out was 14.62 d. the cost f.o.b. was 3.57 d, and the yield 2,66 d gross and 2.59 d net. "On the new • guaranteed price of 7.54 d." he continued, "these factories should pay out 16.61 d per lb butterfat." '■■■■■ A member: What about depreciation? Mr. Nash: We have allowed I'd more than the Farmers' Union allowed for depreciation. The Farmers' Union made : out working and maintenance costs at 4.64 d, and we allow-T>.o9d. Mr. A. P. O'Shea, secretary of the Farmers' Union, disputed that statement. . - . Mr. Nash: Well, it is contained in the Farmers' Union statement. He went on to say that the Edendale factory, on 1936-37 figures, should pay out 17.13 d in. 1937-38. "Some people in Southland will throw up, their hats at that," he commented. Mr. Poison: They will not know whether they will get Is sd, and costs are going up. Mr. Nash: They will next year. As to costs you will have seen the full schedule in today's newspapers. Mr. Poison: Some of the figures in the schedule are absolutely ridiculous from the point of view of the, practical dairy farmer. Mr. Nash: I told the newspaper, men when I gave them the figures that someone would say that. But you cannot argue that the total will be greater than that of the Farmers' Union. AMENDED ALLOWANCE. Mr. Nash said that last year there was an allowance of 2.75 d for cheese manufacturing . costs. .U was found,

that that was low—that it was 3.25 d. The average for the Dominion was 3.25 d, and the Government was allowing that figure this year. The farmers wanted l£d difference, and the Government decided that to keep an even balance in the industry they should pay 2d more to the man producing butterfat, for cheese. "There are some people trying to stress the point Uiat what we promised was to pay the extra cost this year," said Mr. Nash. "We never said anything of the kind. We said that we would find out what price should be paid to ensure'stability and efficiency in the dairying industry—to measure the standard of living of the dairy farmer with the general standard of living. We got every bit of information we could. That does not mean that the price is perfect. I don't know whether you will ever find the perfect price or the perfect wage, but I do say that the farmer last year was better off than ever before." A voice: Not than ever before. Mr. Nash: He is better off than he would have been if the price had not been introduced. He is better off than he was . before, because he will get £650,000 more than he would have got. The estimates we have got suggest that we shall be £650,000 short. I hope we are ;not. I hope that prices on the London market will be maintained. . Mr. Sexton: The Minister of Labour said that £14,000,000 would be paid in wages. Mr. Nash: You argue it out with Mr. Armstrong. I will leave him to deal with everything he said. WAGE FOR FARMERS. Mr. Nash mentioned that at the meeting of dairy farmers at Stratford this week he had asked if any man was getting less than the wage taken into account in fixing the price. There was not one farmer who was willing to get up and say that he was getting less than £4 a week1 plus .his house. Mr. Poison: There are farmers getting less than that. I know them, and you don't, and I say they were there. ' , ; Mr. Nash:' I asked if any. farmer would get up, and there was none. Mr. Poison: They are not anxious to advertise their shame. Mr. Nash: If there are any farmers getting less than £4 a week plus house, let me see the evidence. A member of the deputation: I get less than £4 a week. Mr. Nash: How many pounds of butterfat do you produce? The member: Six thousand pounds. Mr. Nash; Well, there must be something wrong with your farm/ Another member of the deputation asked what allowance had been made for capital invested. Mr. Nash said that he would make an inquiry to recall the figure. He agreed that it was a vital point. If a man got a guarantee of 4 per cent, on the capital value of the money in the farm, would that be sufficient? A voice: No, .6.per cent. Mr. Nash: This is a price guaranteed to the farmer for the average value of the stock, implements, and land, and there is a certain interest allowed for. The Minister referred to the high prices of dairy cattle, and contended that the average price was higher than it had been for some years. Mr. Poison: I think that it is true. Mr. Nash made it clear that there would be no change in the price. So far as was humanly possible, the procedure followed had been to give the man who worked hi the country the same standard of living as the man who worked in the town. "As far as we can'work that but," said Mr. Nash, "we will work- it out. We have tried, and I think we have succeeded, in giving a price that will give an income that would be available to other people under like circumstances. We have taken into account all the factors that went into producing a pound of butterfat, and have determined the legitimate reward for the farmer. , Mr.'-Rutledge:'We hold that you are not doing it. Mr. Nash: We are giving you enough evidence. How much do you consider a farmer should be paid for his labour? A voice: Fivepence halfpenny. Mr. Rutledge: We are satisfied that the dairy farmer is not getting fair treatment. Mr. Nash: We will have to get some evidence behind that. Your friend says s id for labour. We are paying more than 7d. The Farmers' Union says that 4.64 dis sufficient to cover working and maintenance costs. Voices: Oh, no. BETTER THAN GILT-EDGED: Mr. Nash said that the money invested in the average farm was returning a better rate than would be obtained for a gilt-edged security. The Government felt that there was something owing to the cheese producer, and would go into the matter to see if an adjustment could be made. "We have not only legislated to give a price to the dairy farmer for butter and cheese, but we have legislated that over-valued and over-mortgaged farms shall have the excess written off," said Mr. Nash. "The Adjustment Court is compelled to write land to its productive value based on a guaranteed price. I don't see how we can do more to put the fanner on a better standard than we have. In the meantime, taking the stability and efficiency of the industry into account, we have fixed a price that will give every efficient producer a fair reward for his labour.and investment."

Mr. O'Shea again disputed the interpretation placed on the figure of 4.64 d for working and maintenance costs.

Mr. Waite, on behalf of the deputation, thanked the Minister for the courtesy he had extended to it, and said that they could only ask for the reports so that they could have the figures upon which to base further arguments.