FARMERS' PROBLEMS

Evening Post, Volume CXXVII, Issue 109, 11 May 1939, Page 20

FARMERS' PROBLEMS

THE EXCHANGE RATE

INCREASE OPPOSED

(Special to the "Evening Post.")

i PALMERSTON N., This Day,

The opinion that the raising of the exchange rate was no solution to the problems facing the farmer was expressed at a meeting of the Manawatu branch of the Farmers' Union yesterday.; It was decided to ask the committee consisting of representatives of the 'Farmers' Union and the Sheep Owners' Federation why the compensated price mechanism had been overlooked in preference to the raising of the exchange rate, which, it was stated, would only aggravate the gaps between costs and prices.

.'/.Many were saying that the only solution to the farmers' difficulties was the raising, of the exchange rate, said Mf. G. J. Wilde, who added that they must now look upon the exchange rate as a definite cost as regards pro.duction. ~ If, for example, an implement was imported from England there were all sorts of charges to be met, but the main one was the. cost Dtithe exchange. Along with other charges it was handed on by the retailer, and the final price was almost double. People were under the impression that if the rate went free it would rise to 140. What had to be remembered was that the present rate had been capitalised. A free rate would have a tendency to rise before it fell, thus restricting imports and having the same effect as a tariff. It was his opinion that it would allow the very position to come about that the. Labour Government had desired prior to their first election to office when they said that they, would bring down the rate of exchange. If the exchange went to 140 what would be the position of the farmers' costs? They would be capitalised and then the rate would fall. . The Government had instilled the purchasing power which had been increased by other action than through primary production. They I would, like to ask that committee, which was giving a definite lead to the "farming industry over the handling of meat, if it intended to stress the matter of letting the exchange run free. He thought it a very dangerous thing, and the" farmers were going to be stampeded into taking, action which was going to boomerang against them.

Prior to the raising of the exchange the farmers were in difficulties for a short time, said Mr. Beckett, and the same - thing was • happening again. It would be no permanent solution. In fact; as time went on it would become capitalised, and if it fell they would be penalised. A. remit was worded as follows, and ft was decided to send it direct to the head office of the organisation:

"That the suggestion ■• of the special committee of the New Zealand Farmers*' Union and the New Zealand Sheep Owners' Federation to lift the exchange is no solution to farmers' problems,.as it will further aggravate the gap between costs and prices, and that the only sound method of closing the gap is by the mechanism known as the compensated price, which is at present one of-the foremost planks of Hie union policy; that an explanation be asked from the committee as to why this procedure has been overlooked."