FARMING INTERESTS.

New Zealand Herald, Volume LXVII, Issue 20593, 18 June 1930, Page 13

FARMING INTERESTS.

REVIEW OF THE SEASON,

LESSONS TO BE LEARNED*

ADDRESS BY MR. W. J. POLSON.

COSTS MUST BE REDUCED.

[BY TELEGRAPH. —OWN CORRESPONDENT.] WELLINGTON, Tuesday.

A review of economic conditions as they" affected the farmer was given by Mr. W. J Poison, president of the New Zealand Faimers' Union, in his address at the opening of the Dominion conference to* day. Mr. Poison said the chief features of the past year had been the decline in the price of produce and the continuous and persistent number of unemployed. The position would have been worse, but for the large increase in primary products. Salvation appeared to lie along the road of increased production, if production cculd be sufficiently cheap.

Referring to the decline in wool values, Mr. Poison said that fashion demands had been for face cloths and for these crossbred wool had been in demands Fashion was favourable to the New Zealand product, as 85 per cent, of tha Dominion's wool was of the crossbred class. However, finance in Japan, Germany and France had been unsettled witbi the result that the foreign demand was absent. The British export trade in textiles was stagnant for a long time during the selling season with the result thafc there was practically no market. Those who were able to withhold their wool from sale were wise to do so. The situation called for Government assistance to wool-growers and the fact that no method of. financing the holding of the wool clip was available had cost the Dominion a great deal.

The Market For Butter. Butter fared better at the beginning pf the season, but the market weakened in sympathy with the weakening of markets generally, Mr. Poison said. It was fortunate that some co-operative factories did not throw their produce on the market as this would have increased the difficulties of the situation and deferred tho chances of recovery

According to experts, it was impossible to look for a return to a high level of prices. The level of prices started to rise about 1895 and had gone on fairly consistently since, until the recent setback in 1921. When prices were on the up-grade, primary produce benefited mora than manufactured articles. However, the

reverse process was now in operation and primary produce tended to decline faster than manufactured articles. With decreasing returns from farming produce, tho poorer class lands would go out of use. With a reduced agricultural and pastoral acreage, there would be a tendency, to decline in output and to an increase in unemployment. The farming and unemployment problems could be met only be reducing the costs of production so that a profit would be available at the low level of prices.

Seducing Costs ol Production. It was imperative that the costs of pro* duction should be reduced, Mr. Poison said. New Zealand must produce more at lower cost to sell at lower prices and thus make possible a larger consumption of her export products. Under any means adopted, the credit of the Dominion must be preserved. The estimated national wealth of the Dominion was set down at £920,500,000. Land and improvements comprised two-thirds of the national wealth, half of which represented tha unimproved value of the land. One of the chief objections to tha super-land tax introduced last year was that it reduced the value of the chief asset, land. It was necessary to break up the large estates which were suitable for closer settlement, but this must be dona without depreciating the value of farming land

Mr. Poison said that the Farmers*. Union had befen consistently advocating a reduction in tariffs. . The policy was backed by the consensus of public opinion and in view of further declining prices a move must be made to bring it into action. This could not be done hurriedly. A tremendous amount of capital had been spent in machinery, in buildings and in other equipment for industry. Industries had been established under the protection of tariff and it would be foolhardy to throw down the protecting wall and leave the industries naked to the com-, petition of the world. Bounty Board Advocated. o i

There had been a considerable agitation for the establishment of a Tariff Board. The use of the term " Tariff Board " had created a wrong idea. As a piece of machinery, such a body would be undesirable. The general public interest was not considered in the Arbitration Court, yet it> was the genera! public which pail every wage increase. The position before a purely machinery Tariff Board would ba worse that before the Arbitration Court.

The greatest objection to a protectionist) tariff was that it never stopped. It was imposed in the first instance to let infant industries grow up, but no protected industry would admit to having grown up.> To differentiate between the deserving and undeserving industries, each should have to prove that it was ecomunically sound, that assistance was merited and that it would como to a healthy self-supporting condition within a number of years. Mr. Poison advocated the establishment of a tribunal to be known as a "Bounty Board." He said that a bounty payment to an industry Was a definite cost to the community, ifc cost no more that the payment by the Treasury and its effects could be seen. Further, a bounty could bo granted for a period to decline each year until it disappeared. A Bounty Board would have to justify each grant and it would not bo likely to throw good money into a bad industry. By the establishment of such a board, ths efficient would no longer bo unnecesarily helped and the inefficient would ceaso to be ai useless drain on the public purse. The industry with a future ' would ba able to "make good" by assistance granted over a reasonable period, but coming to an end at a definite date. Meanwhile, the farmer and the consumer generally would bo relieved of the costly customs tariff.