DAIRY PRODUCE GUARANTEE

Nelson Evening Mail, Volume LXXI, 13 September 1937, Page 9

DAIRY PRODUCE GUARANTEE

FARMERS CONTEND THAT PRICE IS INADEQUATE

DEPUTATION TO MINISTER OF FINANCE

NO CHANGE TO BE MADE IN RATES ALREADY FIXED FOR THIS SEASON

(By Telegraph—Press Association) WELLINGTON, 11th September. Claims that the guaranteed prices for dairy exports during the current season arc totally inadequate, were made by a deputation icp senting the New Zealand Farmers’ Union and the Southland dairyfarmers, which waited on the Minister of Marketing, the lion. W. Nash. The following resolution, passed at a meeting of the Dominion executive of the Farmers’ Union, was placed before Mr Nash: “That the price for dairy produce as recently announced by the Minister of Marketing is totally inadequate, and in no way fulfils the promises made by the Government to the dairy-farmer.” It was contended by the union that the price announced would not allow the dairy-farmer to pay competitive rates of wages, nor would it allow him reasonable interest on his capital. It was also claimed that the price would be insufficient to cover the increased costs of production. In the course of his reply Mr Nash made it clear that no change would be made during the current season in the prices already lived. He said the price covered a payment of so much a pound bulterfat for all labour on the farm. Mr Nash claimed that the dairy-farmer was better off Last year than he had been for the preceding seven or eight years.

The release of the reports on which the Government based its decision was asked for in a statement submitted by the Farmers’ Union. “First we wish to strees the fact that the report, or reports, of the in vest l gating committee, have not been made available to the industry, consequently we are not in a position to critically examine the methods used in arriving at the price determined on by the Government,” the union said. “We cannot believe that those on the committee who arc practically conversant with farmers’ costs could arrive at an increase of slightly less than Jd per lb of butter, to be precise, 11-16 d. “Two organisations—the New Zealand Co-operative Dairy Company, and the New Zealand Farmers’ Union —both submitted reports to the committee showing that increased costs up to the end of the 1937-37 season amounted to 8d per lb over the previous year. The difference between 3d and 11-lGd is very great, and it seems incredible that an error of this magnitude can have been made by these two bodies; it may bo that the bases of calculation have been different; but we cannot make any further comments on the position until the full reports are released. We ask that the Minister release the full reports without delay. INCREASED PRICE CANCELLED OUT “As the working dairy-farmer sees the position, the increased price is about i?d per lb of butterfat. Costs in the butter factories for the 1930-37 season are up at least Id per lb of butterfat calculated over the whole season’s production, and these increased costs were current for only part of the season. The yearly cost on the last season’s basis would be nearer 4d per lb. “Costs on the farm, whether the statisticians or accountants can find these increases or not, are, to every farmer’s knowledge, definitely up. These increases are difficult to quote with exactitude as Dominion averages, but every farmer knows that the increase is appreciable, and in many cases that we have investigated the increase is Jd per lb of butterfat. Takj ing the increased dairy factory costs j and farm costs together, the increase is certainly more than Jd, thus more than cancelling out the increase of Jd per lb of butterfat.

skilled worker, has capital invested in his farm, and must have managerial ability'. He works much longer hours than the workers enjoying award rates, yet his remuneration is to be lower than the standard set for unskilled workers. To talk about "a reasonable standard of living” for the dairy-farmer or to go so far as to refer to his “standard of comfort” is to the men and women engaged in the dairy industry nothing but a cruel mockery.

“For the foregoing reasons, and for others which we recognise it is needless to reiterate, we say on behalf of the dairy-farmers of New Zealand that the price announced is the complete negation of that social justice promised the dairy-farmers,” proceeded the statement. BROADCASTING FACILITIES DENIED “Although the Government takes the (idlest opportunity of broadcasting over the National broadcasting system a full statement of the Government’s case and inferentially a criticism of the statements of recognised farming organisations, we regret that any broadcast criticism of the guaranteed price Is denied the organised farmers of the Dominion. Both in Auckland and Dunedin recently official broadcasts by the Farmers’ Union have been censored or refused, and we feel that the Farmers’ Union is being denied a priviley.; which is freely availed of by the Government. If the Government is to use the radio as a means of endeavouring to confound the dairy-farmer in what he believes to be his legitimate demands, then we, as an organisation, request the same privileges of speaking to the people as the spokesmen for the Government have. "In conclusion we would remind the ] Government that the following state- j ments have been made by the Minister! of Marketing:—(l) ‘Price must cover all costs, with a reasonable standard of living, if we desire the farmer to continue to produce.’ We say that the price now arbitrarily fixed for our produce does not cover all costs, nor will it ensure a reasonable standard of living to the dairy-farmer as compared with the other skilled workers in the community. “The Minister has also said: (2) ‘The payment to the farmer must be measured by the same tape as is used to measure the payment to others who render equal service.’ We are now convinced that one measure is used for seme sections of the community, while a totally different measure is used for the dairy-farmer. If skilled workers are to be paid 2s 9d per hour, then if a dairy-farmer was paid at this rate for only 60 hours a week, omitting any overtime rates, his wages would be at the rate of £8 5s per week.

“But the position is much worse than that. Employees in dairy factories are now asking the Arbitration Court for increases. When increases are granted ■—as it appears they will be —then the dairy industry will be loaded with further increased costs for which no provision is made in the new guaranteed price. WAGES ON FARMS “Further, employees on dairy'farms are to receive increased wages. The Minister of Labour, before he went abroad, informed representatives of the New Zealand Farmers’ Union that the new guaranteed price would include an increase which would enable the dairyfarmer to pay at least £2 5s per week plus board. That is an increase of 2s 6d per week. If this is the case, then for the season 1937-38 there will be a further load of about jd per lb of butterfat and no provision to meet it. “So we say that the 11-16ths of a penny increase in the price for butterfat will not meet increases in costs made during last season, and in addition the further increases on account of factory and farm wages will have to come out of the payments received, actually leaving the dairy-farmer with less net income than he had during the past season.

“The Government’s claim that costs a>'e allowed on the basis of the average efficient farmer admits that- the price does not allow a reasonable return for all those efficient farmers whose costs are above the average. We are of the opinion that in no other industry in which the Government has fixed prices have they been fixed on average cnsts. From the price announced, those conversant with the industry know that il will not admit of a payment of wages to the dairy-farmer and his employees on the farm anything like those paid to the managers and employees in an average dairy factory. DOMINION-WIDE PROTEST

“The dairy-farmer is. at the present time, anxiously awaiting the full reports submitted to the Government. This is a Dominion-wide protest, embracing the biggest butter manufacturing company in Auckland down to the small but efficient cheese factories in Southland. Associated with the New Zealand Farmers’ Union in this protest are the North Auckland Dairy Conference, the South Auckland Dairy Association. the New Zealand Co-operativt Dairy Co., the Wairarapa Federated Dairies’ Association, the South Island Dairy Association, and many individual butter and cheese factories.

WIVES IN MILKING SHEDS It was stated that the union had carefully considered the whole position and contended that: — (a) The price announced will not allow the dairy-farmer to pay competitive rates for wages, which alone can ensure us efficient labour on dairy farms. The farmers’ wives and children will be forced into the milking shed as never before. (b) The price announced will not allow the dairy-farmer reasonable interest on the capital invested in his farm and stock. Further, farmers will not be able to find anything to reduce a table mortgage, much less pay off anything on a flat mortgage. (c) The price announced will not enable the dairy-farmer to meet the increased costs that will inevitably be piled on to the industry in the coming season—in addition to increases in dairy factory wages and farm employees’ wages there will be increases in all items concerning the cost of living and production. County rates are generally increased, in some cases very considerably—we have an instance in one district of an increase of one-third pence per lb. of butterfat. (d) The price announced does not appear to give the dairy-farmer payment at even the standard rate of unskilled workers. We would point out that the farmer is a

“To sum up the position, the dairyfarmer was not satisfied with the original guaranteed price, it having been based on a period containing the lowest slump years. That original price was considered inadequate, and costs have risen alarmingly since then and are still rising. The farmers’ real problem is one of high costs, and. to use the words of a telegram we have just received from the Federation of Dairy Factories of Taranaki, asking that the full reports be published, they support us in ‘any effort to obtain a lowering of costs to the . dairy industry.’ ”

PLIGHT OF SOUTHERN FARMERS The plight of dairy-farmers in South land and Otago was mentioned specifically by Messrs R. R. Plerron, T. F. Paul and D. Rutledge. They stated that already this year five small cheese factories in Southland had been forced to close down and more were likely to be put out of business. The speakers added that since the announcement ol this year’s guarantee the price of dairy cattle, particularly in Southland, had slumped. Their general request was

that a different standard should be ap- 1 plied to dairying in the South Island owing to the fact that dairy-farmers < there had to contend with markedly : different climatic conditions 1 ] REPLY BY MR NASH Replying the Minister made it clear I that no change would be made during '■ prices for dairy exports announced i last month. The Government, he said, was attempting to find a procedure by which the man who lived in the country would receive as reasonable a return for his labour as the man who lived in the town. Under the guaranteed price system that ideal was cer- < tsinly being approached. Discussing tne deputation’s assertion that the price fixed would not allow the dairy-farmer to pay competitive rates for wages, Mr Nash said the price covered a payment of so much a lb. butterfat for all labour on the farm. If that payment was included in the price, whoever did the work would have to be paid for it. If the work was done by the farmer or by [his family, the payment was still there. [ In fact, the price had been so calcui iated and fixed that full allowance was madt for every penny which on the average was invested in a farm to en-' able the farmer to produce butterfat. Mr Nash quoted at length average payouts and dairy factory costs for various parts of the Dominion. In the case of butter, the respective figures for pay-out and costs a lb. butterfat were as follows:—Auckland, 13.58 d and 1.92 c!; New Plymouth, 13.60 c! and 2.02 d: Wellington, 13.G6d and 1.92 d; Hawkcs Bay and Gisborne. 13.33 d and 2.25 d: flat average, 13.54 d and 2.03 d.

14.62 d with average costs to f.o.b. of 3.57 d. On the new guaranteed price < of 7.51 d the Southland factories i should be able to pay out IG.Gd per lb. butterfat. The Edendale factory in Southland, on its 1936-37 figures, should pay out 17.13 d this season. I On the point of working and main- ] lenance costs on the farm, Mr Nash < said the Farmers’ Union, in the state- ] rr.ent placed before the committee ap- 1 pointed by the Government, had suggested on allowance of 4.G41b per lb. i butterfat. The figure actually decided on by the Government in this ; respect was 5.09 d. so that the actual allowance was higher than that claimed by the farmers’ representatives. ALLOWANCE FOR MANUFACTURING “In fixing the prices for cheese last year.” Mr Nash continued, “we made an allowance of 2.75 d per lb. butterfat for manufacturing costs. The average for the Dominion worked out at 3.25 d and this is the figure which we arc allowing as factory costs for cheese this year. We were urged that a lid margin was desirable to keep an even balance between butter and cheese, and to keep up the cheese production. but for the manufacture of cheese we have decided this season to pay 2d per lb. butterfat more than is to be paid for butter.” Mr Nash claimed that the dairy farmer was belter off last year than he had been for the preceding seven or eight years. A member of the deputation: “Those were slump years. Every company had debit balances. “I said at Stratford that we had fixed the price this year to represent a

Figures presented by the Minister also showed that the payout of the New Zealand Co-operative Dairy Company was 13.62 d with costs of 1.85 d, showing an increase m costs of .13d over the year. CHEESE MARGIN “The preferential margin for cheese on a 10 years’ average was 86d a lb. butterfat.” Mr Nash continued, “but the Government endeavoured to pay lid We allowed 2d as dairy factory costs f« r butter, but in many cases the costs worked out at below 2d. The fact of the matter is that the allowance for butter was too high, but w’e shall do everything possible to redeem the promise to the cheese producer regarding (be preferential margin of lick’ The figures for clice.se production were given by Mr Nash as follows: —

payment of ,C 4 a week to every farmer plus £1 10s for his house,” said Mr Nash. “There was not a single farmer among the 600 or GOO in the hall who would get up to say that he would not receive that amount. And there was no mesmerism about it either.” Mr W. J. Poison. M.P. fa member ct the deputation): “They didn't want to advertise their shame.” Another member of the deputation said he was producing 60001 b of butterfat a year, but he was not receiving a clear personal return of £5 10s a week. Mr Nash: “If you will give me all information, I will go through the figures with you ” Mr Poison: “Speaking as a practical farmer. I suppose.” In thr price fixed by the Government. Mr Nash continued, allowance was made for working and maintenance costs, interest and labour charges. Everything had been subjected to the most thorough investigation in order dial the price fixed should be equitable in every respect. If the price was unfair. it was strange that the price for dairy cattle should bo rising.

Discussing the position of Southland cheese companies, Mr Nash said the average returns for 19 companies showed that the average pay-out was

A member of the deputation pointed out that there had been very large stock losses owing to disease last year. PRICES FOR HEIFERS “Nevertheless, ’ said Mr Nash, “if farmers are going to pay up to £ls a head l'or stock they must expect to get something out of it The average prices for heifers are higher than they have been for some years. Discussing the matter of farm labour i costs, the Minister asked the deputation what it considered would be a fair allowance per lb. butterfat to be made to the farmer on this count. A voire: “Fivepen.ee half-penny.” “The figure we have allowed is over a penny a lb. more than that,” Mr Nash replied. “It is over 7d. We are giving a higher allowance for labour charged and a higher allowance for working' and maintenance. I cannot for the life of me see that the farmers have any cause for complaint. “We have not only passed legislation to give the farmer a price for his butter and cheese. We have also made it possible for him to apply to have his mortgages written down to the productive value of his land based on last year’s price. This year’s price has been increased so the farmer who has his mo'tgagc liabilities adjusted is proportionately better off.” There was a fair amount of crosstalk at the conclusion of the Minister's reply, Mr A. P. O'Shea, secretary of the Farmers’ Union, claiming that the union's previous statement had not suggested a definite allowance for working and maintenance costs, but bad only attempted to show how those costs had increased. Finally, the Hon. F. Waite, M.L.C., who introduced the deputation and

read the statement prepared by the Farmers’ Union, said it might be possible to arrange a further discussion 1 after the Minister had made available the full figures on which the Government had based its decision regarding the new season’s price. USE OF RADIO OPPORTUNITY MAY BE GIVEN The complaint by members of the New Zealand Farmers’ Union that they had been denied the right of broadcasting their opinions on the guaranteed price decisions was the subject of specific comment by the Minister of Marketing, the Hon. W. Nash, in his reply to the deputation which waited on him yesterday. Mr Nash said lie had no doubt that arrangements could be made for a representative of the Farmers’ Union t i discuss the guaranteed price position at a time when a broadcast was being made on the same subject by a representative of the Government. Both sides of the argument would then be presented. However, detailed figures on which the Government had based its decision would probably bo release! in the near future and discussions in Parliament which could cover the • whole position would doubtless be i broadcast. '■

PayFactory Net out. costs. yield Auckanci PI .90 3.11) 2.52 New Plymouth 14.45 2.88 2.44 Pa tea 14.58 2.88 2.45 Hnwkes Bay ... 13.00 3.52 2.45 Wellington 14.57 3.53 2.48 Southland 14.62 3.57 2.48 Flat average... 14 45 3.25 2.49