THE RISE IN WOOL PRICES

Poverty Bay Herald, Volume LX, Issue 18265, 7 December 1933, Page 8

THE RISE IN WOOL PRICES

EFFECT ON FARMERS LEEWAY TO BE MADE UP A NOTE OF. CAUTION “The rise in the value of crossbred wool as evidenced at the Auckland and Napier sales is undoubtedly more substantial than the most optimistic could have anticipated, but it is easy to exaggerate its effect,” stated Mr. C. 11. Williams, president of the Poverty Bay and East Coast Sheepowners’ Federation, when interviewed to-day. “It must be remembered that during the past two years Poverty Bay wool on the average has been sold at less than half the cost of its production ; the SO per cent, rise recorded, therefore, can hardly bo said to spell wealth to the wool producer. Without tho advantage of the exchange premium his balance would still be anything but satisfactory. “Statistical graphs that have boon published from time to time show clearly that costs have a nasty habit of chasing prices very closely and generally of outstripping them. It is this tendency that should bo closely watched to-day. The rise in wool lias served to relieve the strain of the past few years, but there is a. vast amount of leeway to make up in the shape of unpaid interest and other debts, deteriorated farm improvements, and pawned assets.

“Even with enhanced prices for wool and meat, it must necessarily be some years before tho average sheep-farmer regains a. position of reasonable, security. Until there is a substantial rise in the value of dairy products and until we know the effect of the probable restrictions on our export of products to Great Britain, the primary producers can hardly be described as out of the wood.

Mr Williams pointed out that already there was a move on the part of some local bodies to raise wages or to restore cuts. There were still 70,000 men oul of work, and surely the better policy would lie lo employ more men if they eould be profitably employed anil if not; to leave the money with the ratepayers to spend in labor or Hie products of labor. “This year’s wool cheque,” he added, “is likely to be several millions in excess of last year’s. Mue.lt of this must go into circulation through the liquidation of past deficits, bat much of it will remain for the farmers to spend. No more profitable avenue of expenditure can be imagined than the restoration and painting of buildings, the repairing offences, yards and gates, tho reopening of drains.

“Deterioration of farm improvements and pastures has to be made up just as the accumulation of past debts lias to be liquidated, and it is in those directions that the effect of enhanced wool prices on the unemployinetn problem will be felt. A determination in the past of farmers to employ as many men as there is profitable work for, will have an immediate beneficial effect on the situation. “No doubt both in the cities and in the country there are men and women definitely underpaid and it -is, Of course, reasonable to remedy this state of affairs, but until the advent of a period of prosperity is more assured any move towards a general raising of the scale of money wages is, in mv opinion, premature and likely to retard the economic recovery of the Dominion, and the absorption of unemployed men into industry.”