Compensated Price Campaign

Northland Age, Volume 6, Issue 2, 9 October 1936, Page 3

Compensated Price Campaign

“The purpose of these meetings is to bring together the opinion of the farming industry throughout the Dominion, and to establish a united front demanding that the price for butterfat will, at the end of the season, be a compensating one to offset the high tariffs imposed,” declared Mr. S. J. E. Closey on Sat-

urday morning when speaking on the compensated price question at a meeting of suppliers, convened by

the Kaitaia Dairy Company and held at Kaitaia. Mr. T. H. Kenny, Chairman of the Kaitaia Company, presided over a particularly well attended meeting.

“Never before in the history of New Zealand has there been a lime when the various trade unions will . have to more deeply consider the future as the next few years of prosperity will only be what they make it,” continued Mr. Closey. He said that in asking for a compensated price the farmers were asking for nothing more than they deserved and nothing more than the Farmers’ Union had been striving for for many years. Examining the farmers’ economic position, it was found he had a grievance, and with the changing of conditions the time had arrived when he should survey such a grievance. To discuss this it was necessary to divide that grievance into three phases : (1) the farmers’ grievance as he saw it, (2) the cure for it, and (3) the most important, to suggest they had to make up their minds as to what was to be done about it. The Farmers’ Grievance The speaker asked what was the farmers’ grievance. This was mainly the fact that he had been suffering severe disabilities by selling his product overseas on a very low trade market and buying on a high protected market. Summed up, he sold low and bought high. For over the past fifty years New Zealand had endeavoured to foster secondary industries which received tariff protection and so tariffs commenced. Living costs increased, the Arbitration Court became established and trade unions applied for higher wages owing to the increase in living costs, and these were granted. Following this, the manufacturer wanted a higher tariff and so the idea went on in a spiral for thirty years—the position today being that articles cost half as much again in New Zealand as they did in England. This fact did not make much difference to the average citizen as he was covered by higher wages, but the position of the farmer was a precarious one as he sold cheaply and bought high. “The farmer is a manufacturer, is he not?” asked the speaker. “But what manufacturer can remain solvent under such conditions?” The time had arrived when the question had to be solved for all time. The farmer had managed to increase his production, but he had not the control of the selling or purchasing price and thus'a remedy was necessary, and thus also a grievance was created. “The farmer sends goods abroad in order that goods could be brought into New Zealand and, therefore, the new guaranteed price should be a compensating one, so that he can say just what the return is to be. All efforts to reduce tariffs have failed and the only method of raising the farmers’ return was by a compensating price, so that the position can be restored to that of 1914.” Mr. Closey said the farmer was justly entitled to more than he was now receiving, as the annual exports had increased by two and a half times in the past seven years. New Zealand soil was not as fertile as people imagined, and 1,000,000 less acres of land were being farmed as compared with five years ago, in addition to there being 17 percent less population on the sufficient reason for a compensated price, he outlined an alternative showing the increased efficiency of the farmer and the industry whereby the dairy cow’s average yield of butterfat had increased from 1521 b to 2301 b. Still the farmer had high costs held up against him, while

prices had fallen for the goods he produced himself. “Every nation is prepared to give wonderful value for our butter, but we are denied the full value owing to tariffs,” added the speaker. Heavy Taxation on Imports Referring to taxation, Mr. Closey said New Zealand primary products were not sent abroad to bring money back, but to receive other goods in exchange, but the difficulty today was that the imports were so heavily laden with taxation that considerably more produce was required to purchase a smaller quantity of goods. The speaker contended the farmer was entitled to the difference between the amount he received on the overseas market and the amount it took to maintain a standard of living in equitable relationship to the Dominion’s production of all sources. Adopting the method of illustrating- by graphs to emphasise his argument, the speaker showed how in the United Kingdom prices of lead, copra, palm oil, copper and rubber had fallen in 1935 as compared with prices ruling in" 1914, whereas foodstuff prices had risen. Taking the index figure at 1000, the cost level in New Zealand had risen since 1914 to 1300, while the farm product price level had fallen to 800. In brief, the farmer, while beingforced to accept a much lower level for his goods, had to pay a higher level for farm requirements. The objective was to close the gap. Land is the Only Asset A second chart described how the decreased farmers’ prices plus the farmers’ increased costs had affected farm lands in New Zealand. As previously mentioned, the number of men on the land had fallen and 1,000,000 acres had gone out of occupation, it was necessary for farmers to make a better living, otherwise more would go out until ultimately only the very fertile land remained. The Dominion’s national debt was ±'300,000,000, and among the assets was the Great War (£67,000,000), road construction and maintenance, and railways, many of which assets had no tangible existence. The money had gone, but it was said the items had to be included to show where the money went. “Imagine a secretary of a club putting down £6 10/-, Auckland Racing Club, as an asset just to show where the funds had gone.” The speaker said New Zealand had only one real asset, and that was the land, and if that went out there would be absolutely nothing left. To face the debt of £300,000,000, which was over all property, and to foot the bill, it was essential to keep the farmer on the land and also to bringmore land into cultivation. The essential point was, either raise the farmers’ prices or reduce costs. An indication of increased costs on overseas’ products was shown by the fact that a motor car, costing- £213 there, cost another £197 to land in New Zealand. Therefore the car was first purchased for the value of two tons of butter in real exchange, but for the farmer to own it in New Zealand he had to hand over almost another two tons of butter. Making reference to the rate of exchange the speaker, proceeding, said it was impossible to take the exchange off until the farmers’ costs were reduced, or alternatively, the prices he received built up. He was not responsible for the position today owing to the heavy costs as a result

of high tariffs in favour of the sec ondary industries.

A Change in Democracy He said there had been a change in democracy in the last twenty years and that Parliament was taking still more control into its own hands. In 1925, 8 percent of its legislation was restrictive ; in 1929, 20 percent was restrictive ; and in 1936, 60 percent was restrictive and 34 percent alterative. How was the farmer equipped to deal with such a trend in legislation? There were twelve groups of trade unions in New Zealand, and while some groups contained 87 percent of people so engaged, the agricultural and pastoral could only show 6 percent. Such a position must be altered, and the farmer must put himself in the same position as other groups and demand his just rights. The farmer does not belong to an unrewarded or dying industry.

Mr. Doug Kitchen asked what sum would be involved in the compensated price and where would the money come from. More Importing Less Taxation Mr. Closey, replying- to the first question, said the gap between the farmers’ low selling price and high buying price would not be closed altogether. He said if £1,000,000 was paid to the farmer it would pass on, stimulate industry and also reduce tariffs, and would give the farmer a higher income. Taxation was levied upon imports and if the farmer had a greater importing power there would be less taxation as the greater the import the smaller the taxation. The Government had. control of the Reserve Bank and also had the power to create this credit. The position was not whether the money could be created, but whether the farmer would line up for his share which he had earned. “Make good our plan and we will have no difficulty.”

In reply to Mr. H. Parker, Mr. Closey said the compensated price on today’s costs would be just over 1/4 per lb. Replying to Mr. F. Reynolds, the speaker said that there would he no inflation provided the return to the farmer per lb. was not more than the cost of an article in New Zealand that his lb. of butter would buy in England. The speaker also quoted the eminent economist, Keyties, in support of this contention.

Mr. E R. Bird then moved the following resolution, it being seconded by Mr. Mr. J. C. Marsh, and carried unanimously : “That this meeting of dairy farmers of the Kaitaia district affirms the justice of the compensated price and respect-

fully requests the Government, to give early consideration to its application to New Zealand primary products.

It was also moved by Mr. Bird and seconded by Mr. J. M. Dawson, “That this meeting recommends that the Company’s directors should take an active part in the .campaign for the compensated price, and if thought fit, render financial assistance.”

The extent of the financial assistance was sought by some of the suppliers but this was finally left with the directors who are to appioach, if necessary, other northern dairy companies. The meeting closed with a hearty vote of thanks to the speaker.