DAIRY FARMERS’ COSTS

Southland Times, Issue 23512, 19 May 1938, Page 4

DAIRY FARMERS’ COSTS

Lack Of Stability Criticized ‘ PRICE SCHEME NOW IN BAD ODOUR” INABILITY TO PAY WAGES TO ATTRACT LABOUR (United Press Association) AUCKLAND, May 18. “Having achieved its main objective, the guaranteed price scheme is now in very bad odour in every dairying district in New Zealand,” stated Mr A. J. Sinclair, secretary-manager of the Te Awamutu Co-operative Dairy Company Limited, in an address on the guaranteed and compensated price scheme, which he gave to the New Zealand Society of Accountants. Mr Sinclair, who was a member of the Guaranteed Price Committee set up by the Government last year, said a determined effort would undoubtedly be made to present the scheme in a more palatable form before the fanners went to the ballot box in November. The main object of the scheme had been the stabilization of the farmer’s gross income. As a result of its operation he knew to a penny what additional revenue he would receive if he increased his butterfat production by 10001 b. This was a great advance on anything the farmer had hitherto experienced, for at one time it had not been unusual for him to find his income reduced by 25 or 30 per cent, in the space of a few weeks. MEASURE OF SUCCESS However, said Mr Sinclair, stability of income without stability of costs was embittering the dairy farmer. During the past two years there had been brought home to him the fact that the gross income in business might mean nothing at all. The only criterion of success in any business was the net profit for the year and in this respect the guaranteed price scheme was not coming up to expectations. The lack of stability of costs, however, was not the main factor which had disillusioned the dairy farmer and which caused the guaranteed price scheme to stand condemned in his eyes. Today the main factor was the inability of the scheme to give him a return which would enable him to pay his workers a wage which would attract labour to the farm. The dairy farms were being steadily denuded of the best class of labbtir. The problem was very acute in every dairying district and if something was not done it would wreck the scheme and those who were behind it. A man who earned £4 10/- for a week of 40 hours on a Public Works Department job refused to work anything from 70 to 80 hours a week on a dairy farm for £3 2/6.

“From the very outset,” declared Mr Sinclair, “this difficulty was foreseen by many persons associated with the industry. It was strongly emphasized to the Government by some of us who were in a position to do so effectively at the proper time and nothing has done more to prejudice the farmer’s outlook on the guaranteed price scheme than the labour problem. He is purchasing farm machinery, tractors and other mechanical aids, not because he is wealthy, but in a desperate effort to see him through and the only solution which many farmers see today is to get out of dairying altogether. “It has been expounded to dairy farmers throughout the whole of New Zealand,” said Mr Sinclair of the compensated price scheme, “and it has been well received. It will be of great interest to observe whether the guaranteed price or the compensated price secures the dairy farmer’s support at the next election.”