THE OTAGO DAILY TIMES FRIDAY, June 9, 1939. SEEKING A REMEDY

Otago Daily Times, Issue 23830, 9 June 1939, Page 8

THE OTAGO DAILY TIMES FRIDAY, June 9, 1939. SEEKING A REMEDY

The conference of the Otago Provincial Council of the Farmers’ Union has joined with many organisations representing the farming industry in New Zealand in urging the (government to free the exchange—a proposal that has so far received no Ministerial endorsement. The demand is based on an anticipation that if exchange control is removed the rate on London would rise to 150, producing an increase in the farmer’s income in terms of New Zealand currency of some 20 per cent. It is admitted, however, that allowing the exchange rate to “ swing free ” would act only as a palliative to the farmer’s ills, and the point was made by Mr James Begg that this question and that of the removal or relaxation of import control are interdependent. The heartening effect of the exchange depreciation in 1934 was largely due to the fact that it was not accompanied by an expansionist credit policy within the Dominion. Yet already the benefits which the exporter then obtained have been cancelled out. That process of cancellation would operate very much faster, and even perhaps automatically, under the policy which is being pursued by the present Government. The fact the farmers must face at the present time is that their troubles are due to a different set of circumstances from those ruling in the depression years, and that the root cause is the fostering of a standard of wages and costs which their industry—the basic industry in the Dominion economy—cannot support. Ample illustration of the effect of soaring costs in reducing the farmer to penury, or near-penury, in a time of seeming prosperity is provided in the figures relating to the sheep industry. Prices for wool are quite good. In the acute depression period the average price per bale was under £8; in the 193839 season, the worst in the “ postdepression ” era, the average was over £l3 per bale. The cause of the sheepfarmer’s plight is not essentially in the prices ruling for wool on the world’s markets, but in the cost of wool production in his own country. Interesting figures were quoted by Mr A. C. Cameron a month ago, relating to seven Otago runs, which emphasise this position. In 1931-32 wages and running costs amounted to 3s 9d per sheep; to-day, they have increased to 9s per sheep. Rates and taxes at the beginning of the period were Is 4d per sheep; they now total 2s 9d. Obviously, it is not the gross monetary return on his year’s work, but the net return, after his expenses have been paid, that represents the \yoolgrower’s worry. And Mr Cameron made an “ optimistic ” estimate the other day that the proportion of New Zealand farmers who are making a profit on their labours to-day is 10 per cent! These extraordinary figures relating to wool production have their parallels in other branches of farming, and their reflection in the decline, unprecedented in New Zealand history, in farm production. Grimly relevant to the position that is being created is the anticipation by the Minister of Agriculture of a deficit of some £2,000,000, under the Government’s dairy produce marketing scheme, the larger part of which must be debited against the taxpayer as past operations have not provided an adequate surplus. Yet the Government’s tentative proposal to the farmer is for the extension of the guaranteed price scheme to other branches of primary industry—a device that might be expected, on present evidence, to involve the taxpayer in incalculable commitments and would do nothing to remove the farmer’s fundamental difficulty of high costs.