GUARANTEED PRICE

Patea Mail, 30 September 1938, Page 4

GUARANTEED PRICE

DAIRY BOARD’S OPINION CONFERENCE All WELLINGTON A conference of representatives of the principal bodies associated with the dairying industry was held recently in Wellington. Those present, comprised meimibers of the New Zealand Dairy Board, representatives of tlhio National Dairy Federation, the South Island Dairy Association, and the New Zealand Farmers’ Union. The meeting was convened by the Dairy Board to consider the report of the Guaranteed Prices iAdvisory Committee, and the decisions reached by the Government; in connection with, the report. After thoroughly traversing the report and the salient points of evidence, the conference recorded its deep appreciation of the very thorough manner in which tiro investigation had been carried out, and endorsed the standards arrived at unanimously by the committee. The conference regards these standards as the absolute minimum. w,hich should determine tire price to be paid to dairy farmers under present conditions. •The conference expressed its profound disappointment with the Hon. Minister of Marketing for the way in which he had arbitrarily altered standards unanimously agreed upon by a committee of experts after an investigation extending over twenty-live days, and after a most thorough examdnation of evidence of a nature which hiad ever previously been available. With all due respect to the Minister, the conference doubts the ability to discover in an arbitrary manner new standards more accurate than those recorded by tbe Advisory Committee. The conference is forced to the conclusion that the Minister simply made up his mind as to the price he was prepared to pay to the industry, and then adjusted his standards accordingly. The alteration made by (ham in fixing the average production per cow ■at 2501b5. -butter-fat, in place of the committee’s figure of 2401b5., gives an average far beyond anything’ which has b'een achieved In the Dominion. It would appear to the conference that the unit of labour of 5,7501b5. butterfat has been altered by the Minister to 0,000 merely to fit in with the price which ho has decided to pay, and in view of the thorough investigation Earned out by the Advisory Committee the -conference is of opinion that he could not have hiad any facts before him to support his contentions..

The conference draws the attention of the industry and the Government to the fact that t'ho basis of standards as altered by the Minister means -that, where a farmer employs hired labour, the greater proportion of Wie price increase will go to the employee. This is clear AV,hen the standards of the committee are noted, as follows: The standard per cow production was 2401 b.s. bul|tie.rfat; itho standard unit of labour production was 5,7501b5. butterfat; the allowance for capitalisation hi the form of interest on land, slock and chattels was 41 per cent, on a standard of £75 per cow; and these factors finally allowed a -monetary reward to the farmer-owner of £4/10/per week, plus an allowance for house and perquisites of £l/10/-, making a total of £6 per week, which included payment for his managerial responsibilities. The suggested labour reward for the - employee is £O/2/0 -per week, plus 17/6 boarding allowance a total of £4 per week. If the employee’s wage is increased to £4 as stated, then oil-the basis of the Minister’s figure of 6,0001b5, butterfat per unit of labour, this increase takes 1.82 d. per lb. butterfat; so -that if the farmer gets the proposed increase this year of 1.5 d as stated by the Minister, he still has insufficient to pay the increased labour reward. On a farm producing .12,Q001ibs. butterfat, and worked by a farmer-owner and one employee, the increase in wages to the employee would represent' .Did. per lb. butterfat over tlbie whole production, and if all the work were done by hired labour the increase wopld again be 1.82 d. per lb. butterfat for labour alone. Already it as obvious that with decreased production this -season and with the certainty of increased manufacturing costs as compared wjth last year, there is no possibility of the Minister’s estimate of an increase of 1.5 d,. per lb. of butterfat to 4he producer -being realised. The conference- is of opinion that I.2nd. -would be a more correct estimate, with the result that a farmer relying entirely on hired labour will not .57d. per lb. butterfat leas than he received last year. Tills is an illustration of the effect of arblitrarilv altering standards to fit in with pro-conceived ideas, without due consideration of the effects of the relationship between farmers’ costs and rewards .

The Minister has frequently -referred to the guaranteed price scheme ns a means of securing for the dairy farmer an income commensurate with the time, energy, skill and experience expended by ,hruT. Ho (bias stated that the main purpose of the scheme was to solve the economic problems of the dairy fanner’, but in the opinion of the conference this has not yet been achieved. The price which the Govermncn.t hm decided to pay to the dairy farmer this year is obviously based, not on the principles laid down -in the Primary Products Marketing Act, bujt upon a figure which must have been armed at mainly on a consideration of market realisations, leaving the farmer to carry the steadily increasing -burden of costs.