THE DAIRYING COMMISSION

Manawatu Standard, Volume LIV, Issue 291, 7 November 1934, Page 5

THE DAIRYING COMMISSION

FARMERS’ UNION STATEMENT

“EFFECTS NOT APPREHENDED.”

The New Zealand Farmers’ Union (Auckland Province) issues the following statement regarding the financial proposals of the Dairying Commission. It is noteworthy that despite figures sent to every member of Parliament which showed clearly that, not assistance, but stark ruin to dairying would result from the putting into operation of the Dairy Commission’s Report, Parliament does not seem to have seen where the Emergency Bill is leading. Apparently the real intentions in that report and what its real effects would be on farming are not apprehended. The following statement and figures are put forth in the hope that they will excite the attention they should. The statement that relief to the industry by the State is contemplated in the Commission’s Report is challenged by these figures. In paragraph ISO is a Summary of Capital Expenditure. This is by the State. It reads: Rccovcr-

There is nothing in the above which will, produce one penny more for the farmer. There will be a temporary boom in the carpentering, tin-smith-ing and engineering trades, but the farmer will necessarily be put to greater expense. The suggestion is made that the money advanced be made a first charge against the farms, where the farmers and factories cannot pay from their own resources. This would, of course, reduce the ordinary interest-paying ability of farmers still more.

The Commission does not even profess to show that improvement in quality will mean an improvement in price of butterfat. It can be questioned whether any adequate increase in price would result and it was at least the Commission’s task to show that financial rewards would flow from its recommendations. There are 163 butter and 317 cheese factories, turning out excellent produce, and it is proposed that 20 butter factories and 23 cheese factories should be completely rebuilt while 72 butter factories and 84 cheese factories were to be “renovated.” Many of the factories have been built or “renovated” within quite recent periods, none is really “old” in the sense that word would have in other countries, for the industry itself is not old. Applying the same rule to freezing works probably nearly every works would require rebuilding. At least, however, it has to be admitted that tin* cost against the industry is not the “repayments,” but repayments plus interest, which will most likely double the amounts. Also compensation for destroyed cows will not be the value of the cows and is usually much less than half the value. The recommendations put compensation at less than £4 per beast, so it is likely that at least £3 per beast will be the capital loss to farming in the first onslaught. How much would follow could not be estimated. The cost to the industry under these headings then may be given as:

Factories (principal & interest) 1,000,000 Farms (principal & interest) ... 2,600,000 T.B. (loss to farmers) 540,000 £4,140,000 This can hardly be claimed as relief to farming, unless it can be shown beyond doubt that improved quality will result to a commensurate amount and that the improved quality will be paid for. At present, quality improvements quite clearly are not productive of any increased financial return. Any monetary return is problematicIn paragraph 181. under “Recurring Expenditure” are costs of a recurrent nature totalling £306,700, of which it is estimated £288,700 will be against the industry directly. That alone is a serious charge. As the continuation of the T.B. campaign is to cost £150,000 per annum of this, there will be losses beyond what appealabove, under this head to farmers, both in capital value of stock and in reduced production. The following additions to the annual charges against dairying are very hasty approximations only, but they can be claimed to be far more correct than the Commission’s figures, for there will clearly be charges under each of these heads and the Commission has omitted them altogether. £ As per report ;... £38,700 Increased cost Dairy Control Board 750,000 Annual interest, repayments and penalties on extra capitalisation of factories 30,000 Annual interest, repayment and penalties on extra capitalisation of farms 78,000 Value of one-tenth lost production of butterfat, say 1,500,000

Increased cost through uneconomic direction of overseas vessels (present freights about £1,700,000), say 600,000 Extra cost of extra small boards, etc., say 10,000 Extra cost in factories through various recommendations 50,000 Loss under 2d per lb grading penalty, in killed production 20,000 Cost of extra daily deliveries ... 20,000 Liccnso fees 19,000 £3,365,700 It may be said that some of the above figures are guesses, or even wild guosses, and the reply is that they are no more or less guesses than those ot the Commission with regard to T.B. eradication and cost of “improving farms, concerning both of which only flic scantiest frame-work of actual knowledge is available. It is, for instance, being freely said by Government instructors that “60 per c-snt. of the cows are diseased.” Also there is no arrangement to destroy “1. B. pigs; although the suggestion is made that the pigs get T.B. from cows, the reverse is equally possible. Indeed cows may get T.B- from human contamination. There are vast possibilities of expenses not allowed for in the operations of dairying inspectors with compulsory powers. Already large expenses for new cans have been placed on men quite unable to pay them.

If the figures of, such of the committee’s recoinmendations are much less than those given, the practicability of extracting the money from an industry, which, on the Commission s own showing, cannot pay 5 per cent, on the capital value of one-half the properties concerned, is nil. These re-’ commendations simply could not be put into effect, nor indeed, even without such extra charges, could the Commission’s other recommendations he other than completely disastrous. Where then is the use of passing legislation to set up expensive boards and a Supreme Council to attempt the impossible? And where is the justice of claiming the right of Government control under the recommendations of a report committing the_ Government tr> an initial and recurring expenditure of millions, for injurious rather than helpful purposes, when that industry cannot carry its present costs? Even more is the needlessness of the legislation emphasised by discussion in Parliament. The Prime Minister and others said that Government could not ask taxpayers to pay a subsidy but it is suggested that taxpayers pay over £3; millions for no immediately useful purpose. Other members said production must be lessened but the report calls for most radical action to reduce production and mourns over the necessary loss to State Advances and other Government lending departments through that course having to be taken.

Strong criticism of almost everything of moment in the report has already come from those who are supporting it. If “90 per cent, of farms and factories are in good order and condition and the efficiency of management of farms had improved year by year” as stated by Mr Murdoch the main contentions of the Report as to quality are quite without value. If the Council of Agriculture is not to “be a sort of Mussolini,” there is no need for all sorts of autocratic powers to be l>estowed on it. The statement of the Prime Minister that “under the Mortgagors’ Relief Act there was no chance of a farmer being put off his farm” and other references as to that Act, imply that it is intended to retain it, whereas the Commission’s financial recommendations are based on its repeal, and would be of little use without repeal. Tt is sincerely to he hoped that by the time the Act becomes law it will be amended so as to place the dairying industry in charge of its own affairs and prevent any such ruinous proposal as those put forward by the Commission having a chance of being given effect to. At least this is the practically universal wish of all farmers’ meetings which my Union has been able to reach so far.

Total able. £ £ Factories 500,000 500,000 .. 1,500,000 1,300,000 25,000 Nil T.B. eradication . .. 1,000,000 Nil £3,025,000 £1,800,000