DIFFICULT POSITION

Otago Daily Times, Issue 23866, 21 July 1939, Page 7

DIFFICULT POSITION

SHEEP FARMING INDUSTRY HIGH INTERNAL COSTS SUGGESTIONS FOR RELIEF (Per United Press Association) WELLINGTON, July 20. Declaring that at no previous period in the history of the New Zealand Sheep Owners and Farmers’ Federation had the position of its members been as difficult and fraught with such dangerous possibilities as at the present time the oresident (Mr H D Acland) told the annual meeting of the federation to-day that producers for export were still faced with two major problems—high internal costs and low overseas prices “The results of the application of a policy of extended protection with a view to encouraging the development of our secondary industries and statutory wage increases in order to raise the money wage levels within New Zealand sufficiently to meet the increased costs of goods and services arc becoming increasingly evident each month,’’ Mr Acland said “It is now clear that unless an adjustment between the level of internal costs and our exports returns is made no prospect of profit for the sheen farmers, esspecially those depending on returns from their wool and store stock, can he looked for ” Meal Export Restriction Mr Acland also said that, to add to their difficulties due to lower prices overseas, they were also faced with a definite limitation of the quantity of meat for export to what was admittedly their onlv market—Great Britain In view of the need for the maintenance of a sunnlv of breeding ewes from the hill country to the farmer for lamb fattening, a straightouf subsidy under producer control might be iustified. at least for the corning vear, which might be one of adjustment to the altered conditions. Failing that, it wap calculated that a levy of 5/32d per ib on all wethers and lambs killed would provide approximately £312,000. a fund which would meet the position financially hut might result in correspondingly lower prices being paid for store lambs bv farmers fattening for exoort. Mr Acland said the position could be met. at least temporarily, if the F tish Government agreed to store, say, 500,000 carcasses of ewes as an "menrenev war supply , Higher Exchange Favoured Referring to the position of the Dominion’s London funds. Mr Acland said it was vitally necessary to expand exports, which meant in New Zealand giving more encouragement to the farmers No Government could afford to maintain a policy of too high protection foi industries and services to its domestic market at the expense of its exports. He wasi more than convinced that the only way out of the present difficulty was by raising the exchange rate. Failing a rise in the exchange. Mr Acland added, it would appear to be essentia] to reduce expenditure on unproductive works and bring labour costs generally down to a point where productive industry could continue without using up capita] or unduly mortgaging its future ability to give employment