"IN DEEP TROUBLE"

Evening Post, Volume CXXVII, Issue 132, 7 June 1939, Page 19

"IN DEEP TROUBLE"

FARMING INDUSTRY

MR. HAMILTON'S SURVEY

costs--aM:; prices

(By Telegraph—Press Association.) DUNEDIN, June 6.' Farming in New Zealand at one time had been a pleasant and reasonably profitable business, but lately conditions had developed adversely, said the Leader of the National Party (the Hon. A. Hamilton); when1 opening the annual' provincial . conference of the Otagol branch of the. New- Zealand Farmers' Union1 today. ; -. . .'. ; The; land/s- attraction . and : Nature's manner of educating man had built up a very • good' race of people, t'cr whom production- and achievement Werer a credit. : ;Many> .mistakes had been made, he would admit. Let them just take;rabbits and gorse, upon the eradication of which so much time and money' were 'wasted.' Nevertheless, in spite of '. blunders, the farmer today was-the most efficient operative in New Zealand, and proof of that was the fact that he could, produce and market his/ goods in competition .with the' whole world, without the protection .of a subsidy. Farming today had become a very complicated science, with which the farmer must keep pace by tfie study of such important things as agricultural • chemistry,,:" veterinary;, science, commercial bookkeeping, and economics. :, The speaker then dealt with factors which made land valuable. It was his' opinion that if farmers could get the full value of improvements on ' farm lands, they would accept that as the. value of their land. Farmers were, entitled, to expect and demand that, much.' It was commonly believed that; the .value, of iland was its earning capacity. That might be so up to : a point,, but, just as important an influence, was the cost of / production and of services that the farmer had to. buy. ONLY REAL PRODUCER. The real problem in New Zealand today was to determine .the, 'earning capacity of, capital in other industries. y-^ne. farmer, more than anyone else,! was entitled to a just reward for his labour and capital, because he was the only rear producer in the country. His standard,, of living, thereiSere, must be' defended, and farmers themselves must conduct -their own defence. He was quite 1-willing to admit' that that was one 'ofy/the great political difficulties of the.day. , ' f *-," :."•' It was very easy to preserve the standard of living of people engaged in production for the local market. Price-fixing and; subsidies could achieve much of it, but they could not., achieve, anything worth,while for the' man who marketed his produce against allcomei-s. "I- am going to say something with which you may not agree," Mr. Hamilton said, "but it is my opinion that, up to 1930, the farmer got a just and reasonable reward for his labours and a fair deal from the country- Since then, lip we ver, things have go^; out of gear, and many new problems and difficulties have arisen, which cannot be adjusted easily in respect of export production at least. .-.. "Costs can be. passed; on; in most other, industries,; but t ;with_ export^prQduce^it is not possible,■■ and-the Fesult is that farming industries are in deep trouble." y-. " New Zealand was on a very even keel in 1914, and, if the primary industries could have Jield that position,, they would have been in a very sound: and satisfactory state, today.; Actually, however, things were exactly the1 re-' versel,To quote only from such figures; as Government leaders were so fond! of using at present, wages of all kinds were up 76 per cent., the cost of living was. higher by, 54 per cent., farming, costs had~ increased by ,50 per cent, and purely pastoral and dairy costs were higher by 18 per cent. The situation expressed by such figures was a serious one for the farmer in relation to his returns. Such conditions could be met in only one way. Farmers must, adjust their expendittvre to current conditions, and, at, the same time, put up a real fight for their rights and their heritage* Moreover, when they put up the fight, they must do more than merely make a noise. They must know what they wanted, and know why, they wanted "it. INSULATION QUESTION. It had been •suggested, Mr. Hamilton continued, that New Zealand could be insulated, but it was hot difficult to show that that sysem was hot working as it might have been expected to work. For example, the output - of sheepskins without wool last year increased by 430,000, yet farmers received £128,000 less than they 'had in the previous year. The total of skins with wool was up by 2,400,000 skins, but the farmers., received £250,000 less. ' ■■' ■ ■ ~. ■. '.-".'.. , '"v "That is not insulation," he said,: "that is what insulation Was to pre-, vent." ; Tallow could be quoted as another example. Its, production had been increased by 3000 tons, while the farmers received £106,000 less. Turning to a discussion on the guaranteed price as a cure for the disparity between farmers' reward and^ the prices they had to pay, he said that this" subject had to be -regarded; from.two aspects. Marketing and other commandeering of. farmers' produce at a fixed price Were two totally different matters, and marketing itself could have been'handled without, commandeering at a fixed price. It was a system that might have its attractions, but, however it was handled, there was not m-uch likelihood that farmers could get much above London parity. "The; idea of schemes of this sort is to' distribute something more than is warranted by the goods produced," he said. "That is a very pleasing democratic idea of getting something above what is earned. We shall see how it WorksY out." > The use of public credit to boost spending power—in other Words inflation—Was Mr. Hamilton's next topic, and he likened this to putting water in milk before it was sold. "We have a certain amount of money to go round," he said, "and it is de.sired that it should go a bit'further. Therefore, it is watered down. In a sense that is deception, even fraud, because it is reducing the value of all money." A reduction in costs, in support of which there appeared to be agitation, was a sound iWcty of the present-position* but it was a Way that did not';appear to commend itself to the community. , . Going back to 1935, Mr. Hamilton said that:.."the previous Government had got cOsts down to a basis that was very serviceable, and; one that the country: could carry. "But nobody wanted a sound way of keeping our house in order," he went on. "Perhaps it can be done in other ways. We have to find that out. In my judgment,' the money that our produce earns should be distributed on a sound basis, not on an unnatural basis."