STATE ASSISTANCE

Otago Daily Times, Issue 21910, 23 March 1933, Page 5

STATE ASSISTANCE

MANUFACTURERS ANSWERED REJOINDER BY FARMERS The New Zealand Farmers’ Union has issued the following statement in reply to the letter sent by the New Zealand Manufacturers’ Federation to the Prime Minister requesting that an official inquiry be made into the extent of the financial assistance given, directly and indirectly, to the farming industries of this Dominion:— The statement recently issued by the New Zealand Manufacturers’ Association showing that the farming community is being pampered to the tune of £12,000,000 by the general public of the Dominion calls for some refutation. In times like the present, bickering amongst different sections of the community is to be deplored. The spirit “ for the public weal ” should permeate all sections in all our dealings, otherwise the rehabilitation of the Dominion will be slow and fraught with sectional jealousies. Before analysing and criticising the statement issued by the New Zealand Manufacturers’ Association the following self-evident truths should be carefully noted;— (a) Extinction of the farming industry would mean national bankruptcy. Out of a total export value of £34,319,000 in 1931, the produce from our farms was worth £33,023,000, or 96.2 per cent, of the total. N.B,—The goose that lays the golden egg is therefore worth careful looking after. (b) The fanning industry is in danger ■of _ extinction if present prices for primary produce and costs of production continue much longer. The index of export values of farm produce is 776, whereas that of farm expenditure is 1250. In other words it costs about £l6l to grow £IOO worth of produce, so that it is no wonder that the S.O.S. ,signal has been in evidence for some time. (c) The New Zealand farmer is compelled to sell on a world price level, but his costs are assessed on the high New Zealand price level. N.B.—the New Zealand Manufacturers’ Association sells its output on the local market based on the New Zealand price level. (d) Any concessions made to the farming community to help to keep the industry going are economically sound from a national point of view. N.B—Concessions made to some of our struggling secondary industries in the form of protective tariffs are economically unsound. The statement issued by the N.Z. Manufacturers’ Association boldly, states that £12,000,000 of the public’s money is spent annually in pampering the farming community. Such a computation is both erroneous and fallacious, as no allowances have been made for the values of benefits received from subsidies allowed. Modern business. is conducted on the principle that it is sound to spend £IOO to get in £l5O, . and that principle permeates the granting of all subsidies to the farming community. The following comment is made on the various items submitted by the New Zealand Manufacturers’ Association:— : L Concessions on lime and fertilisers, £334,000. These figures have been taken from the Government Estimates, but it is not expected that the actual expenditure for the year will exceed £310,000. These concessions have been made by the Department of Agriculture to increase farm production. If \t had not been for the increase in our wool, lamb, and dairy produce due to the use of fertilisers, New Zealand would have been in a much more perilous state to-day, and hundreds of farmers would have had to walk off their properties. Lime is carried free up to 100 miles, and the Department of Agriculture refunds 60 per cent, of the railage on fertilisers to the Railways Department; 40 per cent, of the railage is paid by the farmer.

During the past two years the small farmers of the Dominion have been unable to buy fertilisers; recognising that the farming industry had to be saved, the department allowed the superphosphate manufacturers a subsidy of lls a ton as an aid towards the purchase. Owing to the raw phosphate rock being obtained cheaper since July last this subsidy has now been reduced to 8s lOd a ton. Notwithstanding the concession, farmers have still to pay £4 a ton at the works for superphosphate. From the concessions totalling £310,000 should be subtracted the values of benefits accruing therefrom —viz., increase in railway freights, in employment, and in national wealth. Generally speaking the fertiliser concessions have been in the nature of “a sprat to catch a mackerel.” 2. Herd testing subsidy, £7700. Herd testing is a factor made use of to increase the production of our dairy herds. Last year a total of 271,404 cows was tested in the Dominion. The fanning community has to pay the expenses of testing which amount to an average of about 5s per cow per season under the group system. The Government subsidy is partly paid to the herd testing associations to help to meet overhead costs, and partly to the herd owners to reduce costs of testing. Last year a refund of 5d per cow tested was made. 3. Statutory grants, £33,450. (a) The Massey Agricultural College Act, 1926, permits of a subsidy being paid out of the Consolidated Fund to the Massey Agricultural College for maintenance purposes. This bears the same relation as grants to university colleges made by the Education Department. (b) The Rabbit Nuisance Act, 1-928, permits of a subsidy being paid out of the Consolidated Fund based on the total rates collected by the 50 rabbit boards. These boards levy rates for the destruction of rabbits either on : (a) The rateable value of the property, or (b) on acreage basis, or (c) the number of head of stock carried on each property. If the Government were responsible for rabbit destruction the annual cost would be far in excess of the £11,500 subsidy. (c) Compensation for condemned stock, £12,500. The Stock Act, 1908, provides for the Department of Agriculture paying half the fair market value of all stock condemned on farms by stock inspectors. The principle behind the section of the Act was that this payment would act as an . incentive to reduce stock diseases, which was in the interests of the country. Owing to low prices ruling for stock, this estimate will not be fully expended. 4. Salaries of live stock, dairy, and fields divisions, Department of Agriculture, £189,000. There is a glaring error here, as the Government Estimates shows the salaries for 1932-33 to be; Live stock division, £73,582; dairy division, £39,534; fields division, £2s,ooo;—total, £138,116. As these salaries include those of pohltry experts, meat inspectors, and dairy inspectors who are working for the general public, it is unfair to place the whole expenditure of the Agricultural Department at the door of the farming community. N.B. —No allowance was made by the New Zealand. Manufacturers’ Association for the earnings of meat and dairy inspectors £41,500, and for the grading fees on our dairy produce £25,500. 5. Unemployed Labour—£3oo,ooo. This is a wild guess, unsupported by any facts or figures. Credit should be given to the farming community for absorbing some unemployed during the existing industrial crisis. Without the concessions made for such employment no labour could have been absorbed, and this would have proved a national calamity. Many townspeople have taken advantage of the concessions offered by the Unemployment Board—and rightly so. 6. Exchange Benefits —£8,000,000. Such a wild extravagant guess unsupported by any form of proof warrants little comment. The imposition of a high exchange acts as an extra protective tariff on localmade goods, so that members of the New Zealand Manufacturers’ Association should participate in the resulting benefits. 7. Local Rates Relief—£2so,ooo. This grant was made last year so that the various county councils could carry on. Owing to the low. ruling prices for produce a big percentage of our farmers could not make “ both ends meet,” and local rates were left unpaid. 8. Tariff protection in England on butter and cheese. This is one of the humorous items m the statement issued by the New Zealand Manufacturers’ Association, which, living in a glass house of protection, should not throw stones. During 1932 the sum of £303,709 was paid as duty on imported ready-made clothing, £111,575 on imported hosiery, £91,572 on imported boots and shoes, and

£90,804 on imported woollen piece goods. The purchasers of these four classes of goods therefore had to pay nearly £OOO,OOO extra through tariff duties for these goods in order to help' to “ bolster up ” these industries in New Zealand. In addition, the value of these articles manufactured in New Zealand in 1931 was £5,017,000. As local prices are assessed on landed prices of imported goods, plus tariff duties (omitting exchange), it has been calculated that a further £BOO,OOO are added on through existing Customs tariffs. This means that the public of New Zealand are paying about £1,400,000 more for these four classes of goods than if no tariffs existed. 9. Sliding scale of wheat duties. The New Zealand Farmers' Union is agreeable to the withdrawal of the protection on wheat, provided the duties on other commodities are removed also. Owing to the high costs of production in New Zealand, the farmers in the wheatgrowing areas were unable to grow wheat without the guarantee of a payable price. It ill becomes the New Zealand Manufacturers’ Association to cavil at the wheat farmers getting a little of the good things received by the former. 10. (a) Customs duties on articles used in farming, (b) Exemptions from sales tax on farm requisites. These are practical methods of lowering the index of farm expenditure, which, as has been shown previously, has remained too high for most farmers to make a living. IP. Exemption from income taxation. There is no need for the New Zealand Manufacturers’ Association to worry oyer this, as the New Zealand Farmers’ Union supports the principle of taxation through income. Summing up the statement issued by the New Zealand Manufacturers’ Association it is quite apparent that in its desire to have a good “whang” at the farmer, it has raised its sights far too high with the consequent result that it has considerably overshot the target. Moreover, as the whole of the expenditure quoted in the statement has been ratified by Parliament —the representatives of the public—there should be no criticism coming from a section of that general public.