FARMING DILEMMA

Otago Daily Times, Issue 23828, 7 June 1939, Page 6

FARMING DILEMMA

free exchange or lower • costs ; \ .'•;?.■■ prospect of production DECLINE ; GUARANTEED PRICE CONDEMNED ' -'. ■■ ■.' .• '■'■/'., The probability of a heavy decline in production, and the actual abandon>ment of, certain classes of land as a result of increasing farming costs were discussed by the president' (Mr R.H. Michelle) at the annual provincial ~ conference of the Farmers' Union yesterday mornng. The speaker suggested that the solution- of the bulk of farming problems to-day depended on a substantial reduction in costs, and expressed his personal opinion that neither a free exchange nor a guaranteed price for meat or wool could be expected adequately to maet the situation. Doubtful Prospects , At- the outset, Mr Michelle said that one could weir wish that the present lot of the farmer, and for that matter, a very large section of the community, was more cheerful, and that future prospects were more hopeful. While 12 months ago conditions were far from satisfactory, it had to' be remembered that the year previous to that was a good one, from the farmers point of view. He now addressed them after two years of unfavourable farming results, and he suggested that the full effect of New Zealand's - new economy had come home to the man on the land. Often as it had been raised, he must again stress the point of costs and prices, for such determine , the result of the year's working, whether it be in,farming_or any other walk of business 1 life.; -Farmers were faced with increased costs from every direction, which they knew were still soaring almost daily, although the world's markets which absorbed practically all their production had tended to lower values with no indication of improvement. Declining Production "The.dairy farmer now •finds,'' said Mr Michelle, "that with a guaranteed price above London parity for his produce, he is not receiving a reasonable return for his servces. The same ap-j plies to the average high-quality farms of reasonable areas where mixed farming is'the rule. I am sure that without V heavy interest burden such farmers, for their long hours'' of arduous work, are unable to-day-to show a profit equal to the earnings of, the average worker on the 40 hours per week. Turning to lands of medium quality, it is very difficult to see-how, under. present conditions, ; this class of country can be maintained in a reasonable, state of production. It' does not warrant;,the high cost of cultivation, without Which .its productive capacity must seriously decline. Lower grade lands warrant,no expenditure, and must gradually, go out of production. Even less enviable is the plight of the high-country;mahf who fs. dependent .upon his .returns 'from wool and surplus- sheep.' With wool realising less than production cost and surplus stock at the, lowest level for a number of years, one ! cannot • see stability here, excepting in: a*:speedy and substantial rise in values of a. corresponding decrease in costs." : - .These were not pleasant observations, he said, yet they set: out the position as he saw it, and 'they -were based on personal. : experience and intimate association 'with ■' the farming c6mmuhity;;'":, '■'i'iu- : i*-"'-r".~ : ' '■'■*■■■■■■;? '■'■ '■■ ■■ The Task Ahead" In assisting to fmd a remedy and in helping the farming industry back-to full production and. reasonable profit, there * was much for the consideration of all farmers' organisations. . He-was sure that the.ihcoming executive would address :itself whole-heartedly: to the task, and he asked for the support and interest of -every larmer to strengthen its hands in 1 the coming year which,, thoughbeset with difficulties, was also full of interesting!problems; . : ;". -Much had recently been said and written regarding a Government guaranteed price fgr all farm produce or -the allowance of a. free exchange as a: remedy' for the present. troubles, Mr Michelle said, but they would have noticed:that meetings of farmers were by no. means agreed as to the advisability '• of either suggestion. They would, no doubt, expect him to touch upon these subjects, and he. would content himself with making only ..-/a few observations. It Was beyond doubt that any prices fixed would not meet the case unless ihey were considerably above the present export values. If the excess payment were hot speedily recovered by enhanced exr port values, the inevitable result -must be an increased capital charge on New Zealand or increased taxation to hieet the deficiency. In either case the result was an Increase in cost to the farmer as well as to others. He thought they would agree that the previous increase in the exchange rate had long since cancelled itself f out in increased costs. It would seem that any further increase would eventually, bring about a similar result. ' •,.., ; .„/''."■■■ It appeared to him that the farmer's salvation lay in a reduction, and a very substantial reduction, in all his costs. .