Farmers Being Driven Info New SI ump

Manawatu Times, Volume 64, Issue 96, 26 April 1939, Page 5

Farmers Being Driven Info New SI ump

Prices Must Go Up Or Costs be Reduced

RISE IN EXCHANGE ? Per Press Association. WELLINGTON, April 23. With farm production ant prices failing and costs rising, another depression is imminent, That is the opinion of a special committee of the New Zealand Farmers’ Union and the New Zealand Sheepowncrs’ Federation. The committee believes that the only way of averting a genera) depression is to restore prosperity to the farming industry. Tho surest, easiest and most practicable step toward that objective, it contends, would be to free the exchange rate and allow it to rise.

"A rate free to rise or fall under the control of the Reserve Bank, a* conditions demanded, would do much to restore the general economic balance, from the loss of which the farmers and the general community are suffering. - ’ the committee states. “A rise In tne rate would not only benefit farmers; it would remove the necessity for impoit licensing and it might attract back some exported capital and so replenish sterling funds. It would also enable a price to be paid to the dairy industry sufficient to meet its cost of production, as determined by the committees which have investigated it.”

At the present time the outlook foi farming, of all kinds is worse than t has been for many years, says the committee, adding that, since the Government has been directly responsible foi much of the rise in farm costs, it ii natural that the farmers should think first of turning to it for aid. Decline in Production. It is admitted, says the committee that the last season has been a poor on* and this has meant lighter weighl lambs and some declines in other forms of production. But production is declining for other reasons. Most farm prices have also fallen since 1937 and, while meat prices are at fair levels, dairy produce prices ar* low, wool prices barely exceed those paid in 1914, and the index of the hides, skin* and tallow group is well below the 1914 level. Wool, which averaged 15$d a lb. in 1936-37, declined to 9.93 d. a lb. in 1938-39. The general opinion about the prospects of sheep-farming is indicate*’ by the prices paid for ewes at the recent ewe fairs in Canterbury. These prices were certainly affected by a temporary scarcity of feed due to the dry season, but, even allowing for this factor, prices were appallingly low. It la reported that they were the lowest registered since the depressions in the ’9o’s. Meanwhile, in spite of these low ami falling prices of farm produce, farm costs are relatively very high and are squeezed between high costs and low prices, see their incomes disappear, their profits turn to losses, and their assets in land, stock and buildings, to which many have given their life’s work and on which their hopo* for the future depend, steadily depreciating in value. In many cases, it has become difficult or impossible to meet fixed charges in interest on mortgage, rates and taxes, and to many well-informed observers the position and prospects appear worse now than in the lowest depths of the recent depression. “Prosperity For All” In these circumstances, it is not surprising that relief should be sought. Since the Government has made lavish promises of ensuring prosperity for all, uud since it has been directly responsible for much of the rise in farm costs, which arc a prime cause of the farmers’ difficulties, it is nutural that the farmers should think first of turning to tho Government for aid.

Since their difficulties arise from the combination of high and rising costs on the one side and low prices on the other, they realise that the remedy for their difficulties can be found only in a substantial lowering of costs or an equally substantial raising of prices. It is from the margin between these two factors that the farmer secures his net income and the reward for his work, and, if farming is to be maintained, that margin must be widened. Consequently, methods are canvassed by which the Government might either reduce costs to the farmer or raise the receipts for his produce, and bo permit him a margin of return sufficient to enable him to carry on his business.