WOOL PRICE INCREASE

Gisborne Herald, Volume LXIX, Issue 20824, 1 July 1942, Page 5

WOOL PRICE INCREASE

GROWERS’ PROPOSALS MR. J. S. JESSEP’S VIEWS . At the meeting of woolgrowers held ' in Wellington last Thursday, comprising representatives erf the New Zealand . Sheepowners’ Federation, the Meat e Board, and the president and various p members of the Farmers’ Union, a re1, quest was made that the 15 per cent s increase on wool granted by the - British Government be also paid put s on the wool used within New Zealand. The conference made no other reeomj mendation than that the 15 per cent l increase should be paid out in full to wOol-growers in cash. The suggestion from the Treasury, J that as goods could not be purchased - to balance this extra amount of money > put into circulation in New Zealand, J it was liable to cause inflation, was not 1 agreed to, partly on the grounds that a • good deal of this money would be used 1 to reduce swollen advances by mercantile firms and banks. 1 The conference of wool-growers j rejected the proposal that 1J per cent t be deducted from the 5 per cent retention money so as to keep the value of : the wool used by New Zealand mills . at the price fixed at the beginning of the war, on the grounds that this ; would be a subsidy by the wool- , growers only of £200,000 to stabilise i the price of wool for the manufacture within New Zealand at the present ; price, the contention being that, if ; required, the cost of stabilisation ; should be a general charge on the tax- • payer. Supplying this information to the Herald, Mr. J. S. Jessep, East Coast Commissioner, said that when war broke out in September, 1939, the agreement with the British Government fixed the price at 33 1-3 per cent above the ruling price for the season 1938-39, but as this amount was not subject to the usual wool-broker's’ commission and other charges, in actual fact the advance 'amounted to approximately 361 per cent increase. With 15 per cent added it was over 50 per cent increase. New Zealand Industry’s Part “The British Government pays an increase on the wool exported only,” he added. “The total amount of wool produced in New Zealand is approximately 800,000 bales, and the amount used by the New Zealand industry is approximately 80,000 bales. The 15 per cent increase on the wool used in New Zealand amounts to £200,000.” To those resolutions which were passed on to the Minister. Mr. Jessep very strenuously disagreed. He stated that he was definitely of the opinion that the resolutions of the conference called by the Sheep-owners’ Federation. the Meat Board, and delegates of the Farmers’ Union did not truly represent the views of the vast majority of wool-growers. He could not conceive that the sheep owner's generally who, from the commencement of the war until now, had suffered probably less than any other branch of the community, would be in agreement with the resolutions passed. It had been pointed out that the subsidy to farmers in New Zealand on super-phosphates alone amounted to close on £1,000,000. It was estimated that 25 per cent of this was used by sheep farmers. This amounted to a subsidy of £250,000. The Meat Board, Sheepowners and Farmers’ delegates, in effect, asked that the taxpayer find another £200,000 to pay an advance of 15 per cent on the wool used in New Zealand. The sheepfarmers would be receiving 50 per cent more on all the wool exported, approximately 720,000 bales, and 36J per cent on the 80,000 bales used in New Zealand and now largely for war purposes. Little Dislocation Mr. Jessep said that at the outbreak of the war no one dreamt that there would be so little dislocation or that the price would remain so stable for wool, meat and store stock. “An attempt has been made to separate the meat industry from the wool industry,” he continued. “As the vast majority of New Zealand wool is crossbred and the eventual destination o'f all sheep (lambs, wethers and ewes) is the freezing works, it is nonsensical to say that the meat industry and the wool industry can, in the main, be separated. As a matter of fact, the 15 per cent increase in wool already has been reflected in the value’ of store stock throughout New Zealand, and whether a sheepfarmer is a fattener of sells only store stock is beside the point. “It has been pointed out that the New Zealand Government—otherwise the taxpayer—stood behind the meat industry last year (when it was exceedingly doubtful when the meat would be shipped) and paid for the meat when it was hung in the works. Through a marvellous piece of luck, our shipping has been maintained and our works have been emptied. Had this not been the case the New Zealand Government (otherwise the taxpayer) would have had to carry the burden of many millions for meat which is paid out to the sheepfarmers. “I am satisfied,” said Mr. Jessep, “that if the matter is represented to each individual sheepfarmer, there are very few who are not prepared to take 3 per cent war bonds for this extra 15 per cent on the wool which the British Government purchases and forgo asking the 15 per cent increase on the wool which is required for use in New Zealand. If sheepfarmers do not wish to retain these bonds, they will be readily saleable.”