FARM PRODUCE PRICES

Grey River Argus, 10 February 1938, Page 7

FARM PRODUCE PRICES

HON. W. NASH Answers Compensation Advocate DEBATE WITH MR. J. H. FURNISS. [Per Press Association.] HAMILTON, February 7. The Hon. W. Nash, Minister for Marketing, opposed Mr. J. H. Furniss, honorary organiser of the compensated price campaign, in a debate on the pros and cons of the guaranteed price and the compensated price at Hamilton to-night. The Alexandra Hall was packed to capacity for the meeting, which created exceptional interest

Mr. Nash opened for 30 minutes, Mr. Furniss replied for 30 minutes, Mr. Nash then spoke for 10 minutes, and Mr. Furniss for 15 minutes, and Mr. Nash finished with five minutes. The Minister was accorded a rousing reception from the large gathering of farmers.

At the conclusion, Mr. Nash said he was bitterly disappointed. He came here to answer the case of the compensated price, but had nothing to answer.

“It is one of the most absurd cases I have ever heard. It is a formula and Is a most ridiculous one,” concluded Mr. Nash. “I am still convinced that the only scheme that will keep the farmer on the land and give him an adequate return is the guaranteed price. No other scheme is practicable and I have intensely studied the position.”

Mr. Nash reviewed how he drew, up his pamphlet on the guaranteed price, and said that in that pamphlet was the phrase that the payment to the farmer must be measured with the same tape measure as payment to other workers. This was freely quoted, but what was not quoted was another phrase, just as important, which implied that the guaranteeing of the wages also guaranteed the organisation and the overseas market.

In past years the farmer had been badly handicapped in trying to produce when his goods varied in price so materially, and the Government before the 1935 elections said that it would guarantee the farmer a set price, so that he would know exactly where he was.

Then the same Government promised the average price for the previous eight to 10 years, and after working out the average for eight years, nine years and 10 years, it found the best average was 10 years, of 12.72 d. The Government added further fractions to this figure, and gave the industry a better price than what was promised in the election campaign. The Minister, after reviewing the first season, added that when the final accounts were available he anticipated that the deficit would be £338,000. Thus the Government had kept its promise that the farmer would receive payment on the same standard as other workers. This added sum was given to the farmer in spite of the remarkable buoyancy of the market at Home.

In the second year many wastages were abolished, principally through zoning of dairy factories and the adjustments of mortgages. Marketing policy was also altered to the benefit of the farmer. Many expenses were saved, and Tooley Street merchants reduced their commissions from 2i per cent, to 2 per cent. The price was also raised this year. The farmer must be efficient, must be stabilised and have a chance of increasing his production. The Government also had to see that neither the Government nor any other person made a profit out of the dairy industry, concluded Mr. Nash. “COMPETITIVE" PRICE. Mr. Furniss said that the unfair position was the liability of farmers to meet increased costs. The Government gained the farmers’ support on their promises, but they did not fulfil all their promises. There was now a considerable gap between the producing cost and the selling price, and this gap had to be closed. . The farmers had increased production 500 per cent, and efficiency 100 per cent, since 1916, but had been overburdened with increased costs. “We say the price must be one to allow him to pay competitive wages, receive a reasonable return for th? money invested, and be able to live at a reasonable standard," said Mr. Furniss. “One thing the guaranteed price failed to cover was the loss of stock, and yet the department had only recently stated that one-fifth of the cows in the Dominion were lost to disease. The price also failed to allow no reserve for loss by fires or Mr. Furniss added that he did no. think that dairy factory workers or lorry drivers were paid too much at 2s 9d or more an hour for 40 hours a week, but farm workers were paid too little at Is Id an hour for a 60hour week. . Mr. Furniss said that the Minister had promised that women and children would be excluded from the sheds under the guaranteed price, as the farmer would be paid sufficient to pay wages to men, but women and children were still forced into the sheds, as the farmer could not compete on the wages market. Mr. Furniss was given a rousing reception on finishing, the cheering lasting for several minutes. MR. NASH’S REPLY. Mr. Nash, in reply, said that he had hoped to hear something about the compensated price, but he had heard two minutes oh the compensated price and 28 rninutes attacking the guaranteed price. He still did not know fully what the compensated price was. He thought that the major burden of farmers was interest, and because of the policy of the Government interest had been maintained at a low rate, while fertilisers, another major cost, had also not increased. Moreover, the price of Is Id an hour for farm workers was agreed upon by a New Zealand Farmers’ Union committee and farmers were getting much more a week than the £3 10s a week that farm workers were getting. '. “We cannot afford to abolish our tariff barriers, as we would lose £10,000.000, and besides, w* must:develop our secondary industries. Free trade is a wonderful ideal, but is absolutely impracticable,” added Mr. Nash. Mr. Furniss said that the compen-

sated price aimed at reducing farmers’ costs to bridge the gap between costs and the selling price. The farmer should be paid the same price as any other worker for the same time and amount of skill expended. The Government now had the complex task of finding work for people in defiance of the latest machinery, which was reducing labour. The Government should face the position of getting more men on the land to build up production to enable more goods to be exchanged for that produce. STATE LOSS ON THE GUARANTEE. [Per Press Association!. WELLINGTON, February 8. In an official statement issued today the New Zealand Farmers’ Union replied to the Hon. W. Nash, Minister for Marketing, who said at Hamilton during a debate on the guaranteed price that “the amount allowed for maintenance costs in the guaranteed price was greater than that suggested by the Farmers’ Union.” The union denied that it had suggested any amount for maintenance costs and assets. “Mr. Nash’s reference is to a statement by the Farmers’ Union submited to the Guaranteed Price Committee,” says the statement” In this statement the Farmers’ Union estimated the increase in costs which had taken place since the previous yeafp' l 1936-37. In the statement concerned there was no reference at all to the cost of production per lb of butterfat, except the figure of 4.093 d taken from the Dairy Commission report of 1934. Mr. Nash evidently added to this figure of 4.039 d the Farmers’ Union committee’s estimate of the increases in farm costs of ,55d, which would give 4.643 d. The Government’s figure for last year was 5.069 d.

“However, prices have risen considerably between 1934 and 1936, and if Mr. Nash desired to obtain a figure to compare with the committee’s estimate of farm costs, it would have been only fair to have increased the 1934 base figure by approximately 20 per cent., which was about the percentage of the increase in costs from 1934 to 1936. “If this 20 per cent, of the increase in costs were added to the base figure, the production cost might be fixed at 5.46 d per lb of butter-fat or almost pne halfpenny above the Government figure for farm costs, which is absolutely in line with the estimate prepared by the Farmers’ Union committee.

“The practice of adding 20 per cent, or the total figure is, of course, a very rough and ready one, but it is the only basis on which anv comparison' with the Government’s figures can be tried to do it. In any case, however, it should be emphasised that the Farmers’ Union had no intentioh, of suggesting the cost of production figure per lb of butter-fat and nothing in the Farmers’ Union statement can be read into it to suggest that such was their intention,” the statement adds. “All that the Farmers’ Union committee .did was to estimate the increases in costs over the 1936 figure. “There is another point .which also requires clearing up; that is the Minister’s statement that the Farmers’ Union agreed that £3 5s a week Was a reasonable wage for farm labour. The Farmers’ Union agreed with the Minister for Labour on a sliding scale of wages for dairy farm workers, the sliding scale to be based on the pay-out the farmer received from the factory. The principle adopted was that (purely for the purposes of calculation) the output of butter-fat a labour unit was agreed to be taken as 6.0001 b and on each 6.0001 b. of butter-fat it was agreed that the increase in the guaranteed price would be shared, half to the employer and half to the employee, so that the amount of dairy farm workers’ wages is determined by the amount of the guaranteed price. The larger the guaranteed price the higher the wages to workers." FARMERS’ UNION CONTENTIONS HAMILTON, February 9. “I do not know,” said Hon. W. Nash (Minister of Finance), speakin? at a round-table conference of farmers of the Waikato, at Morrinsville, yesterday, “how to reimburse the farmer for any additional costs accruing during the year, after the fixation of the guaranteed price. This year there is a deficit of £13,500 in the chgese account, which is more than we made last year. So far, the butter account is showing a credit bal - ance of £200,000 for 37,000 tons of butter sold to date this season. If the London rate ruling to-day prevails, then that surplus will all go overboard by the end of the year. If there is a deficit on the dairy account at the end of the year, it will be met by an advance from the Reserve Bank. A voice: Will that he the case always? Mr. Nash: “No., I did not say that the dairy account may have to stand on its own later.”