WELLINGTON NEWS

Hokitika Guardian, 22 November 1927, Page 4

WELLINGTON NEWS

THE PR DIARY PRODUCER. (‘Special to “ Guardian WKLLIXOTOX, Xov. 19. The latest bulletin prepared by the Economic Department of Canterbury College again champions the cause of the primary producer, and the facts adduced in support are most convincing. It is sluum in the indexes of prices and purchasing power of exports, that during the war years farmers as a whole gained greatly. Urom 1911 to 1917 they were able to exchange the same volume of primary products for an amount ol local goods which increased steadily, until in 1917 their purchasing power was 22 per cent higher than in 1911. Rut ironi 1917 a change set in and local prices rose more rapidly than export prices, and continued to rise or remained fairly high, while export prices fell and llnctuated round a lower level. Ry 192:1 the farmers could Imy only 72 per cent: of the local goods as compared with what they could huy in 1911. There was an increase in the purchasing power in 1925 lutt it has lallen since. Including the exceptionally good year of 192.) fanners have been able to buy over the whole ol the past 7 years 12 per cent less local goods for the same quantity of exports. Such a contraction of purchasing power might he borne easily enough over one or two years, Init over a period as long as 7 years it suggests a permanently changed situation which must inevitably re-act unlavourably, on the economic life of the community as a whole. The expanded costs of local manufactures are passed on and the main burden is borne by the primary producers. During the first half ol this year the index number of export prices was 195, the cost ol living figure was l(i.‘f. and the purchasing power of exports 93. In addition to this burden the farmer who thought lie held a freehold was under tribute to at least three first mortgages—the public debt of New Zealand, the local body public debt, and his private creditor. It is, however, the disparity between the price levels ol the sheltered and the unsheltered industries that is undoubtedly in tbo main underlying tbo economic difficulties wliieb have afflicted the Dominion since 1020. The permanent basis ol sound prosperity and progress in Xow Zealand is and must long continue to he the primary industries. for they alone are strong enough to export and sell in competition with llio rest of the world. Other industries. being unable to export goods in any quantity must rely upon the local market, the condition ol which varies with the fortunes of the exporting prinmrv industries.

What are the remedies:-' The bulletin points out that since present diltieulties are largely tine to the disparity between farmers costs and prices, they might he remedied either by lower costs, by higher produce prices, or both. Rut little is to he expected from higher iarm prices. Ii is thought that much more is to lie hoped Ironi an increase in larmers f incomes without corresponding increases in their produce prices, that is, from increased farm production at about flic present level of prices. Something has already been done in this direction, ter tanners enjoying none ol the artificial protection of sheltered industries, and suffering little from the restrictive regulation upon those industries, have relied more on their own ability and onergv to meet their difficulties. Close attention to the business side ol iariniug. better farm management and organisation, elimination of wastes, fuller realisation of resources, methods, such as herd testing and top dressing of pastures, all these have been advocated as means whereby production might he expanded without corresponding increases lit costs, ami some measure of success is being achieved. Rut some effort should he made to reduce internal prices. ihe internal price level is kept up hv high overhead charges, heavy taxation and rates, over-capitalisation, ami by nigh primary costs for which the tariff and State regulations are largely responsible. The need of increased production at a lower cost is universally recognised, but it is futile to expect that this desirable end should be fully achieved while we fail to recognise bow greatly industry is hampered by the cost, increasing regulations and restrictions imposed by Arbitration Court awards and by public authorities.