EFFECT OF PARITY

Opunake Times, 24 August 1948, Page 3

EFFECT OF PARITY

ON DAIRY FARMERS BENEFIT EXPECTED Provided the guaranteed price structure i s maintained, Taranaki and King Country farmers can see nothing'but good for Ihe dairy industry developing from the currency •manipulation announced by the Minister of Finance, the Rt. Hon. W. Nash. The meat and wool industries, particularly the latter, ar# not considered to he in such a fortunate position, however. Provided farm and dairy factory labour costs do not rise disproportionately, farmers and administrators of the industry interviewed duriiio the week-end are of the opinion that sterling produce payments should enable last season’s butterfat prices to be paid to the farmer, or even a few pence more, and still leavre a small sum oyer to augment the stabilisation account. Whether or not the farmer gets his expected increase, he is likely to benefit from the reduced. price of imported goods more than any other section o.f the community. Wire, manures and farm machinery are hut a few of his heavy commitments that are affected. Cost# to. dairy factories will be substantially reduced by the removal of the exchange on cheese bandages, salt, baling wire and. other factory requisites. However, factory managers state that all factories already have their requirements for this coming season and no‘ saving* can be expected until the 1949-50 season. ' ! Effect on Land Values When the exchange rate was changed in 1933 a ris© in -the price of land resulted Will the dropping tp parity with sterling result in a similar decrease in laud values ?, farmers ask. Land values are at present pegged Ly the Land Sales Court and its committees but the theoretical effect of the exchange variation could he to push down the price of land , to .conform with the new values: Will the Government iiistruct its valuers to , alter their basis of valuation? if is asked. Answering this question, «ne man stated that land costs are based on the production of the land at 1942, or as near as possible to that basis. However, dairy prices bear no relationship to overseas, prices under .the guaranteed price structure and nc devaluation in real estate is to be expected. There is more anxiety among meat and wool producers who have not the protection afforded by large stabilisations accounts.' Sheep farmers in particular compete on an open market and whether'their loss of income will he met by the decreased costs of imported gOods is yet to be seen. Few think it will. The more optimistio look to some financial support from the consolidated fund. Stock Agents’ Fears In keeping with the meat and wool industries themselves, the stockland station agents stand to lose up to 20 per cent, on their sales without any reduction in their expenses, it is pojnted o»t. Farmers’ losses may be met from stabilisation accounts or the consolidated fund but the Governments past policy towards Tie agents indicates that they can look for little help in this direction.

Produce firms consider that their initial losses may be heavy but, taking a longer view, they look to an improvement in their position. Slag and manures at present on the water may have to be cleared at a loss although firms consider their united strength to be sufficient to force reluctant farmers to honour their commitments without a redaction in the price of materials already ordered.

Prices of seeds, phosphates and all other farm requirements are set by the Price Tribunal which allows profit on a unit basis rather than a percentage of capital involved. , Therefore, when imported farm requirements are reaching New Zealand at the reduced price, produce firms consider they will receive the same profit per unit, such am a ton or a bushel, hut the capital involved in the deal will be 20 pier cent, lower and, with cheaper retail costs the volume of business is likely to increase.