WORK ON FARMS

New Zealand Herald, Volume LXXV, Issue 23145, 17 September 1938, Page 17

WORK ON FARMS

BASIS OF PRICES LABOUR ALLOWANCE COSTS OF PRODUCTION DETAILS AND SUGGESTIONS [BY TELEGRAPH —SPECIAL REPORTER] WELLINGTON, Friday In translating the standards of efficiency and standard allowances, with the exception of that for housing and other perquisites, into costs, items to be included in the calculation of the price per pound for butter-fat produced on cream-producing farms, the advisory committee on the guaranteed price achieves a total of 9.070 d, comprising working and maintenance costs, including depreciation, 5.695 d, and capital charges, interest, 3.375 d. According to the report of the committee, to this total of -9.070 d must be added an amount to cover the management and labour reward of the producer and the appropriate labour reward of the male and female labour, whether family or hired, employed by him, and from the gross total must be deducted the allowance of 1.54 d for pig returns. Management and Work

0 "The committee recognises that the d assessment of the reward of manages ment and labour cannot be decided on - statistical data alone, but that the ® consideration of non-monetary factors is also involved," the report says, "importance must bo attached to the fact that, if prices are based 011 the standards of efficiency adopted by the committee, the costs and charges of every efficient farmer, other than labour costs, are completely covered. ' "Further, any excess of per-acre, per-cow and per-labour-unit efficiency > above those standards represents an additional return to the producer. The converse, of course, is equally true. If usual conditions and normal circumr stances exist, tile efficient producer cannot make a loss, and he is assured of 1 making an additional return for every [ degree of increased efficiency. Farmers' Long Hours "The committee Realises that the hours worked by dairy farmers are longer than those worked by employees in urban industries, and that the dairy farmer exercises in addition a managerial function. While no entirely satisfactory comparison can be made, it is possible to attempt a comparison between the dairy farmer and the small storekeeper, whoso hours are longer than those prescribed for his employees, and who has also the responsibility of management, though without any protection against the vicissitudes of trade and business. "The security of tenure enjoyed by a dairy farmer and the protection afforded to him against market fluctuations are important non-monetarv factors that can properly be set off against the long hours required to be worked by him. Problem of Labour "It, is recognised that the major difficulty with which those dairy farmers who are dependent for the"working of their farms on being able to engage hired labour are at present laced is that of obtaining and retaining adequate suitable labour. "Though some weight must be. given to the relative permanence and continuity of employment on a dairv farm, as contrasted with the casual and noncontinuous nature of work in other avenues of employment, it must be conceded that the higher wages and shorter hours now being offered in other avenues of employment more than balance these considerations. "The result is that labour is being attracted from the dairy farms, and an adequate supply of fresh labour to replace it is not forthcoming," the report continues. "It is* essential, if the dairying industry is to be stabilised, that it should be in a position to pav wages reasonably in line with those offered in other occupations, due allow ance being made for the considerations that lead men to prefer farm work to other classes of work. "The committee adopts the view expressed by the majority of the former committee regarding the essential nature of the organisation of labour on dairy farms. It is primarily organised on a co-operative family-unit basis. There is nothing essentially reprehensible in the utilisation, within reasonable limits, of family labour, and itis generally regarded as a moans of ] building up the dairy farmer's equity ' in his farm or stock. _ . . "It is recognised, too, that it is impossible to equate the production of most farms to the capacity of an in- i tegral number of whole-time adult male <

labour units, and that the fractional labour units required are usually made up by the employment of family labour. The committee accepts the "existence of a certain amount of family labour as a fact, and in its consideration ol the problem of labour reward it has made full allowance for all labour, family or hired, employed on a dairy farm. "The committee has readied the conclusion that the standard allowance to be made for the reward of management and labour, when related to the standards of productive efficiency that have been adopted, should be at the rate of 9.'22 d per lb. of butter-fat. Wages Equivalent "This allowance," states the report, "in the case of a typical efficient dairy farm,on which the dairy farmer and one adult male hired worker are employed- on a full-time basis, represents the equivalent of £6 a week, consisting of £4 10s money reward, and £1 40s representing the money value of housing and perquisites, for the farmer, and £4 a week, including 17s 6d for board and lodging, for the hired worker. For every additional unit or fraction of a unit of labour employed, a further allowance for management and labour is made at a rate equivalent to £221 for each additional 57501b. of butter-fat produced. "In the opinion of the committee, the allowance for labour, which is applicable to both hired and family labour, removes any possible justification for the utilisation of unpaid labour or the undue employment of family labour on any efficient dairv farm in New Zealand. "The committee thinks it advisable, before leaving the question of labour on dairy farms, to draw the attention of the Government to "the desirability of providing 7iieans whereby assistance may be given toward providing houses for married employees on dairy farms. Price Recommendations I

"Evidence was submitted supporting prices ranging from 17.889 d per lb. of butter-fat to 19.919 d per lb. of butterfat," the report says. "After giving the fullest consideration to all the evidence presented, the committee has come to the conclusion that the price of butter assessed in conformity with its order of reference, should be' calculated on a basis designed to provide a butter-fat payment of 16.70 d per lb. "■The committee therefore recommends that the prices of butter and cheese manufactured from cream and •milk supplied to dairy factories between August 1, 1938, and July 31, 1939, and placed on board ship, with the concurrence of the-Primary Products Marketing Department,' for export from New Zealand, shall be as follows. It is also recommended that the differential premiums for qualitv should remain as at present. BUTTER Per lb. m„,. , Costs butter-fat workiug and maintenance costs, including: depreciation ~ 5.H95d Capital chartres (interest! .. 3 3v,d Labour .. .. it 9/'>-->ocl " T , IS.'JOOd .Less pi<r returns .. .. j r,.<od Butter-fat price for butter .. 16.7r>0d Equivalent f.o.b. basic purchase price per lb. of butter .. 15.(i05d CHEESE Per lb Butter-fat price for oheeso .. ]S.7ood Equivalent f.o.b basic purchase price per lb. of cheese .. 8.775 d Estimate of Deficit "Ttio present basic f.o.b. purchase pneesjor buttor and cheese are 13.6 M and 7./5 d per lb. respectively," the report adds. "It is reasonable to estimate that the average market realisations lor the 1937-38 season will be ILSs per cut. for butter and 68s Cd per cwt. lor cheese. I 1 bc assumed that, during the IJOO-0J season the same average market realisations, neither more nor less \vi" be obtained as in the estimate tor the season now ended, and for approximately the same quantities of but- I ter and cheese, the deficit 011 the season's operations may be estimated at:—-On butter, £2,030.000; 011 cheese, £791,000; total. £2,824,000. Against this estimated deficit is to be set. any surplus for the season 1937-38. "In submitting its report, the com niittee recognises that its functions are purely investigational and advisory.'' the report adds. "Tt recognises also that, owing to the impossibility of foreeasting, even approximately, market realisations for a- year ahead, it. cannot ninke a definite finding regarding the possible financial implications involved in the payment of the prices it has recommended. "The decision, as to both the prices to be paid and the extent of the financial implications involved, is necessarily dependent 011 general considerations of Government policy regarding finance, and the committee can therefore only submit its recommendations in accordance with its order of reference-"