Problems and Remedies

Southland Times, Issue 23840, 10 June 1939, Page 6

Problems and Remedies

These are some of the facts which have been put before the public with an increasing urgency in recent months. They were repeated and emphasized at Oreti on Thursday night by the Dominion president of the Farmers’ Union. It is not a story of grievances which concern only one section of the people, “The farmer is telling the rest of the community,” said Mr Mulholland, “that if things are going to be allowed to carry on in a certain course production is going to go down and the other sections are going to find themselves short of many of the things they want.” The truth is, of course, that economic difficulties are indivisible in a self-contained society. New Zealand depends for the greater part of the national income on primary products and on the semisecondary industries which prepare them for export. All the schemes for bigger and better social services, for new industries and for a higher standard of living depend, in the final analysis, on the resources of the soil and the capacity of the farmers to maintain a steady production. If there is a decline in production the inevitable result will be a decline in the amount of money available for imports and for capital development within the country. Borrowing can postpone these difficulties; it cannot avert them. Sooner or later the situation will have to be faced and a serious attempt made to find remedies that will deal with the root problems. The Government has tacitly admitted the seriousness of the position by agreeing to set up a Royal Commission to investigate the present condition of the pastoral industry. In the meantime there is no lack of suggested remedies, including a higher exchange rate (or alternatively a free exchange), an extension of the guaranteed price system to wool and meat, subsidies for high country sheep farmers who are now facing special difficulties, financial relief for those whose mortgage liabilities have become impossibly heavy, the development of new marketing methods, a new system of produce-control by the farmers themselves and the inception of a rural political party which would carry the support of farming interests into the House of Representatives. The one solution of the present difficulties which receives practically unanimous support among the farmers is an all-round reduction in costs; but it is now generally recognized that this is no longer a matter of practical politics. If there are to be reductions (and sooner or later the necessity for such action will have to be faced) they are likely to take place indirectly, in much the way that “import selection” has reduced the drain on the London funds and at the same time caused a certain

amount of retrenchment within the Dominion. Unfortunately these methods do nothing to reduce internal costs: indeed, the ultimate effect of import control must be a further rise in prices and in the cost of living. It seems likely that the immediate expedient will be an extended application of the subsidy principle, which can only mean an all-round increase in taxation. But although financial measures of this kind will spread the cost of production more widely across the community they will do little to solve the basic problem of a declining output. And only an unreasoning optimist would suggest that artificial remedies can do more than postpone the final acceptance of realities.