"VANISHING POINT"

Poverty Bay Herald, Volume LXVI, Issue 19893, 22 March 1939, Page 6

"VANISHING POINT"

SHEEP FARMING PROFITS RISE IN PRODUCTION COST REDUCTION IN VALUES CONCERN IN POVERTY BAY "Something in the nature of a crisis seems to have been -reached in the cconomiic position of the sheep-farm-ing industry," states -the president ot the Poverty Bay and East Coast Sheepowners' Union, Mr. C. H. Williams, in his report to be submitted to the annual meeting on March 31. "A considerable all-round drop in values of all products, accompanied by a persistent rise in production costs, nave reduced the proiits ot any but the -best quality land to i'.he vanishing point, with the result that immense areas of third-rate or marginal lando are actually going out of production. "The present year is likely to see this process 'accelerated. The problem of arresting the process is one of vital importance, not only to the individual farmers concerned, but to the Dominion as- a whole, for the material welfare of our country depends very greatly upon the prosperity of the primary producing industries.

Restricted itlarkets

"The remedy for such conditions as we are facing to-d'ay has until recently lain in increased production, increased efficiency, increased output of wool, mutton, beef and what not. To-day, owing to the ever-increasing output of various Artificial fibres and to the continued restriction of world trade, natural wool is becoming harder to sell, while our meat export to our only substantial customer has now been definitely restricted. "Increased production, therefore, offers no solution, and improvement in farming technique must necessarily take it'he line of cost reduction on the farms, which means a reduction, in the number of farm workers and a very undesirable acceleration of the drift of population from rural to urban pursuits. An Alternative "There is, however, in my opinion an alternative to the reduction of costs on the farm and that is a reduction of costs off the farm, and it is in that direction; that the restoration of stability to our industry lies. Every factor thai'; tends to increase unduly or unfairly the burden upon the land should be scrutinised earefully, and the burden reduced. "The iniquitous system of financing half of the hospital deficit by means of a land rate should go by the board immediately, and there are other directions too numerous to discuss in this report in which relief can be atforded.

"I sincerely hope that the next presidential report will contain a record of substantial improvement in this direction, and that a spirit of greater optimism will prevail than is in evidence to-day. Productive Value Valuation

"I understand it is the intention of the Government to overhaul the whole taxation system of the Dominion during the coming session. An endeavour will be made to secure some measure of relief for our industry more especially in respect of local rates. "In my opinion no equitable distribution of tax burden is possible until the unimproved value basis of calculation is abandoned in favour of the productive value. In the case of the graduated land tax it is a fact that a minority of farmers, holding considerable areas of land with a high ratio of unimproved to capital value, are overtaxed to the point of ruin, while a vast number of others in much better circumstances escape practically tax-free. "The amount demanded from out industry in the form, of land tax if not in itself an intolerable burden, but its distribution is grossly unfair. It is perhaps not impossible that the Government will decide to abandon the graduated land tax altogether.