DAIRY PRICES

New Zealand Herald, Volume LXXV, Issue 23149, 22 September 1938, Page 14

DAIRY PRICES

BASIS CRITICISED ARBITRARY ACTION MINISTER'S STANDARDS VIEWS OF INDUSTRY [by TELEGRAPH —rRESS association] WELLINGTON, "Wednesday A conference of representatives of tho principal bodies associated with the dairying industry was held to-day Wellington. Those present were members of the New Zealand Dairy Board, representatives of the National Dairy Federation, the South. Island Davrv Association. and tho New Zealand I armors' Union. Tho meeting was coni vened by the Dairy Board to consider the report of the Guaranteed Prices Advisory Committee and the decisions reached by the Government in connection with that report. After thoroughly traversing the report and the salient points of the evidence, the conference recorded its deep appreciation of the very thorough manner in which the investigations had been carried out, and endorsed the standards arrived at unanimously by the committee. The conference regarded these standards as the absolute minimum which Ghould determine the price to bo paid to dairy farmers under present conditions. The conference expressed its profound disappointment with the Minister of Marketing, the Hon. W. Nash, for the way in which he had arbitrarily altered the standards unanimously agreed on by the committee of experts after an investigation extending over 25 daj's and after a most thorough examination of evidence of a nature which had never previously been available. With all due respect to the Minister, the conference doubted his ability to discover in an arbitrary manner new standards more accurate than those recorded by the advisory committee. Altered to Fit Price "The conference is forced to the conclusion that the Minister simply made up his mind as to the price he was prepared to pay to the industry and then adjusted his standards accordingly," says a statement issued. "The alteration made by him in filing tho average production per cow at 2501b. butter-fat in place of the committee's figure of 2401b. gives an average far beyond anything which has been achieved in the Dominion.

"It would appear to the conference that the unit of labour of 57501b. butter-fat has been altered by the Minister to 6000 merely to fit in with tho price which he had decided to pay, and in view of the thorough investigation carried out by the advisory committee the conference is of the opinion that he could not have had any facts beforo hini to support his contentions. Labour Gets Greater Share "The conference draws the attention of the industry and the Government to the fact that the basis of standards as altered by the Minister means that where a farmer employs hired labour the greater proportion of the price increase will go to the employee. This is clear when the standards of the committee are noted. The standard per cow production was 2401b. butter-fat and the .standard unit' of labour production was 57501b. butterfat. The allowance fo*. capitalisation in tho form of interest on land, stock and chattels was 4£ per cent on a standard of £75 a cow, and these factors finally allowed monetary reward to the farmer-owner of £4 10s a week, plus an allowance for house and perquisites of £1 10s, making a total of £6 a week, which included -payment for his managerial responsibilities. "The suggested labour reward for an employee is £3 2s 6d a week, plus 17s 6d boarding allowance, a total of £4 a-week. If the employee's wage is increased to £4, as stated, then on the basis of the Minister's figure of 60001b. butter-fat per unit of labour, this increase takes 1.82 d per lb. butterfat, so that if the farmer gets the proposed increase this year of 1.5 d, as stated by the Minister, ho still has'insufficient to pay tho increased labour reward. > '

Farmer's Return Reduced "On a farm producing 12,0001b. but-ter-fat and worked by a farmer-owner and one employee, tho increase in wages to the employee would represent .91d per lb. butter-fat over the whole production, and if all the work was done by hired labour the increase would against be 1.82 d per' lb. butter-fat for labour alone. "Already it is obvious that with decreased production this season and with the certainty; of increased manufacturing costs as compared with last year, there is no possibility of the Minister's estimate of an increase of 1.5 d per lb. of butter-fat to the producer being realised. The conference is of opinion that 1.20 d would be a more correct estimate, the Result that a farmer relying entirely on hired labour will net .57d per lb. butter-fat less than lie received last j T ear. Oosts and Rewards "This .is an illustration of the effect of arbitrarily altering standards to lit in with preconceived ideas without due consideration of the effects of the relationship between farmers' costs and rewards. The Minister has frequently referred to the guaranteed price scheme as a means of securing for the dairy farmer an income commensurate with the time, energy, skill and experience expended by him. He has stated that the main purpose of the scheme was to solve the economic problems of the dairy farmer, but in the opinion of the conference this has not been achieved. "The price which tho Government has decided to pay to the dairy farmer this year is obviously based not on the principles laid down in the Primary Products Marketing Act, but on a figure which must have been arrived at mainly on consideration of market realisations, leaving tho farmer to carry a steadily-increasing burden of costs."

FARM HANDS' WAGES

EFFECT OF HIGHER PRICE

[from our own correspondent]

WELLINGTON, Wednesday

Tho opinion is expressed in Wellington that the increase of ljd in the guaranteed price for butter-fat would not represent a clear gain to that extent to tho dairy farmer, the reason being that there was an agreement between the New Zealand Farmers' Union and the Government, which provided for an increase in wages for farm hands should an advance occur in tho guaranteed price. Mr. A. P. O'Shoa, Dominion secretary of tho New Zealand Farmers' Union, said that he did not wish to comment on the position in view of r conference to bo hold between the Farmers' Union and representatives of tho Government. Originally the basis was an increase of 2s Gd in wages for every }d increase in tho guaranteed price, but it is stated that tho course to be followed in respect to any future increases in the guaranteed price was not laid down. It is suggested in one quarter that the Government might also wish to take into account the increased payment for last year. The increase in the wages of farm hands was mentioned as being possibly from 10s to 15s a week.