"IN BAD ODOUR"

Otago Daily Times, Issue 23504, 19 May 1938, Page 9

"IN BAD ODOUR"

GUARANTEED PRICE SCHEME MAIN OBJECTIVE ACHIEVED LACK OF STABILITY OF COSTS (Per United Press Association) AUCKLAND, May 18. " Having achieved its main objective the guaranteed price scheme is now in very bad odour in every dairying district in New Zealand," 'stated Mr A. J. Sinclair, secretarymanager of the Te Awamutu Cooperative Dairy Company, Ltd., in an address on the guaranteed and compensated price schemes which he gave to the New Zealand Society of Accountants. Mr Sinclair, who was a member of the Guaranteed Price Committee set up by the Government last year, said a determined effort would undoubtedly be made to present a scheme in a more palatable form before the farmers went to the ballot box in November. The main object of the scheme had been the stabilisation of the farmer's gross income. As a result of its operation he knew to a penny what additional revenue he would receive if he increased his butterfat production by 10001 b. This was a great advance on anything the farmer had hitherto experienced, for at one time it had not been unusual for him to find his income reduced by 25 0r,30 per cent, in the space of a few weeks. Stability of income without stability of costs was, however, embittering the dairy farmer, Mr Sinclair said. During the past two years there had been brought home to him the fact that the gross income m business might mean nothing at all. The only criterion of success in any business was the net profit for the year, and in this respect the guaranteed price scheme was not coming up to expectations. The lack of stability of costs, however, was not the main factor which had disillusioned the dairy farmer and which had caused the guaranteed price scheme to stand condemned in his eves to-day. The main factor was the inability of the scheme to give him a return which would enable him to pay his workers a wage which would attract labour to the farm. Dairy farms were being steadily denuded of the best class of labour. The problem was very acute in every dairying district, and if something were not done it would wreck the scheme and those who were behind it. A man who earned £4 10s for a week of 40 hours on a Public Works Department Job refused to work anything from 70 to 80 hours a week on a dairy farm tor £3 2s6d. „ . , , " From the very outset," declared Mr Sinclair, "this difficulty was foreseen by many persons associated with the industry. It was strongly emphasised to the Government by some of us who were in a position to do so effectively at the proper time, and nothing has done more to prejudice the farmers' outlook on the guaranteed price scheme than the labour problem. The farmer is purchasing farm machinery, tractors and other mechanical aids, not because he is wealthy but in a desperate effort to see him through, and the only solution which many farmers see to-day is to get out of dairying altogether. "It will be of great interest to observe," said Mr Sinclair, whether the guaranteed price or the compensated price secures the dairy farmers' support at the next election."