DEPENDENCE ON FARMERS.

King Country Chronicle, Volume XXX, Issue 4873, 21 July 1936, Page 4

DEPENDENCE ON FARMERS.

A buoyancy of spirit was noted by the Minister of Internal Affairs, the Hon. W. E. Parry, in Auckland last week. The reason, however, is economic rather than political, and is simply this —that the farmer is receiving more for his produce. Taking wool we find that receipts for this commodity last season amounted to £10,083,297, as against £4,486,480 for the previous year, while in the Auckland Province alone the dairy cheque for the year ended June 30 is about £9,750,000, an increase of over £2,000,000 on the previous season. New Zealand leans on the farmer and on his good or bad fortune her economic position is dependent. Thus, when the value of our exports looks up, as it has done lately, business is brighter all round. That brightness may be added to or detracted from by Acts of Parliament, but its fundamental source is increased returns for the farmer. Thus any undue increase of costs, by decreasing the farmer’s return, will sooner or later have a bad effect on New Zealand. Prior to 1929 the farmer received an amount for his produce which resulted in speculation and over-capitalisation throughout New Zealand. Prices slumped suddenly and we had the depression. At the present time we have a moderate increase in prices for our produce. That should induce a moderate “buoyancy of spirit” in business, and as a natural result a moderate and probably warranted increase in costs. Yet the Government is artificially increasing costs by its social legislation. Is it warranted in a country which leans so heavily on world markets? Certainly rising costs are likely to provoke a passing prosperity —it is an axiom of economics that periods of rising prices are periods of prosperity. Costs, however, cannot continue to rise for an indefinite period. The peak must be reached, and when it is, an over-capitalised New Zealand will have to take stock of itself as it did in 1931. If when that time comes we are receiving good prices for our farmers’ produce, the adjustments necessary may not be so searching; but it will at least furnish a good example of the fact that it is to the welfare of her farming community that New Zealand must look for her real prosperity and progress. The Labour cry is that we simply exchange our produce for English manufactures, and that the price paid in England does not greatly affect New Zealand. History has not borne this out. If guaranteed prices for produce are entirely successful our dependence might be lessened, but only in degree.