SEVEN POINTS

Evening Post, Volume CXXVII, Issue 95, 24 April 1939, Page 10

SEVEN POINTS

FARMERS' PLIGHT

FALL IN PRODUCTION

COMMITTEE'S REPORT

In concluding a comprehensive report dealing with the position of the farming industries of the Dominion, a special committee of the New Zealand Farmers' Union and the New Zealand Sheepowners' Federation sets out seven main points which itj is suggested should receive thej urgent consideration of the Government. These points are as follows: — 1. The present position and prospects of farming are worse than for many years past. Production is already declining and is tending to decline further. Unless the position is improved production will fall further and the effects on the Dominion may be disastrous. 2. The chief cause of farmers' difficulties is the disparity between costs and prices. General costs are determined largely by wages throughout industry as a whole, and by taxation. Both have risen out of all proportion to the rise in the export prices out of which farm costs must be paid. 3. These difficulties can be solved only by lower costs or higher prices, or " both, hence the possibilities of both must be examined. 4 Cost reduction on the scale required cannot at present be regarded as practicable, and even temporary palliatives in the shape of minor cost reductions would be difficult • to secure and ineffectual if secured. ft Direct subsidies on wages, rates, and taxes, or prices, from the Government or from consumers, by guaranteed prices or otherwise appear equally unpracticable. Money would be hard to get, control schemes might be imposed, _nd higher costs would largely be passed on to farmers. . 3ince the community as a whole depends so largely on the farming industry, and/since it has always been a general rule when the farmers are prosperous, prosperity is general, and when the farmers are depressed, depression becomes general, it is essential, in the interests of the Dominion, that prosperity should be restored to farming. .'he surest, easiest, and most practicable step towards this is to free the exchange rate from the point where it is now arbitrarily pegged. Then the rate would rise till it registered the level most appropriate to present conditions. A rise in the rate would not only benefit farmers, it would remove the necessity for import licensing, it might attract back some exported capital and so replenish sterling funds. A rate free to rise or fall, under the control of the Reserve Bank, as conditions demanded, would do much to restore the general economic balance, from the loss of which the farmers and the general community are suffering. This would also enable a price to be paid to the dairy industry sufficient to meet their costs of production as determined by the committees which have investigated it.