PROBLEM OF THE FARMER

King Country Chronicle, Volume XXXIII, Issue 4806, 5 July 1939, Page 3

PROBLEM OF THE FARMER

EXCHANGE RATE AND GUARANTEED PRICE. COSTS OUTSTRIP PRODUCTION. WILL THE TOWNS CALL A HALT? (No. 2). (By Mrs. C. K. Wilson). If you accept iny parable of New Zealand as one large farm, its railways, roads, wharfs, etc., as the improvements no the farm and the towns standing for the homestead, and if .you also accept my contention that the farm is being ruined by the the “homestead,” then the two legislative attempts that have been made in adjust matters and to rehabilitate the landed interests will be seen in a new ' light. First, in the depths of the slump came the raising of the exchange. The farmer looked askance on the measure. He did not understand it and the fact that a drop in butter occurred very shortly after the exchange was established tended to prejudice him against it. Also the metropolitan press, whose proprietors stood to lose by it—as being importers of paper—conducted a violent campaign against it. But if the farmer had realised that the gold price of butter (that is, the price he would have got if there had been no depreciation of coinage either here or in Britain) fell for a time as low as 3i£d per lb., and wool to the same proportion, or if the Government of the day had taken pains to explain clearly and simply the meaning of exchange, he might have been more grateful. If it did nothing else, it saved a crisis. Without it great numbers of farmers, after a life of toil and sacrifice, would have been dispossessed, or would have found it impossible to carry on. If these, embittered, had been thrust into the ranks of the unemployed who were already in a riotous mood, New Zealand would have seen trouble such as, thank God, we have never experienced. Apart from all this the raising of the exchange was inevitable. Every exporting country in the world was then busy ducking under its rivals—that is, depreciating its coinage for the benefit of its exports—and when Australia did the same, to have kept our pound level with sterling would have meant that nearly all our buying would have been done in Australia to the exclusion of our one market, Britain. But all this is ancient history. The only thing that makes it worth discussing it is that in all probability a further raising of the exchange will become necessary to avert another crisis in the near future.

The next measure enacted to help the dairy farmer against the rising cost of production was the so-called “guaranteed price”—a tax contributed by the whole community in order that the dairy farmer might be able to produce in spite of rises in costs. It is as if the. homestead whose extravagance had brought the farm to the verge of ruin should offer to tax its home workers (as well as the land workers) in order to enable the farm to continue to keep the home on the same extravagant scale a little longer. Thus you impoverish the farmer, reduce his standard of living to zero, and then give him a dole collected from those whose standard of living hg,s been raised at the expense of his.

It is not very logical to take with one hand and give back part of the spoils with the other. Yet this measuse also served a good purpose. It has been acceptable to the farmer, though until this year he derived no particular benefit from it except that of knowing exactly what his monthly cheque would be.

So it would seem that neither of the measures that have been tried will prove a permanent cure for the maladjustment between town and country, or, to carry out our simile, neither of them has altered the fact that Big Farm N.Z. cannot continue to support the present scale of expenditure of the homestead. The majority rules on this farm and, as the numbers are overpoweringly homestead workers, the problem becomes .their problem.- It is for them to decide. Do they intend to go on raising wages, cost of living and standard of living? If so, a time must come when consumption outstrips production, or when production falls so low that their standard can no longer be maintained. Will the towns call a halt or must New Zealand face a crisis?

It is not the first time in our history that New Zealand has faced a crisis. In the ’seventies of last century there was much borrowing, and when the resultant boom burst and a slump came, the land owners fell like card houses. They lost their holdings and came flocking, penniless, into the towns. Unemployment was tremendous for so young a country, and the less fortunate literally starved, and that, in spite of the ridiculously low price of foodstuffs. I have myself seen a man hawking in a handcart a large leg of wether mutton and a 41b loaf of bread together for a shilling. And the same year friends of mine saw young men standing in queues in front of a soup kitchen with tears running down their cheeks—tears of weakness from hunger. This comfortable generation is in no mood to stand conditions like that, nor are they likely to pertain, but if primary production falls so low that it cannot maintain the country, nothing can save a crisis of some sort.