HAS THE DAIRYMAN BENEFITED?

Timaru Herald, Volume CXXXVII, Issue 19622, 17 October 1933, Page 6

HAS THE DAIRYMAN BENEFITED?

Notwithstanding the persistent attempts of certain politicians to show that the Government grievously erred in manipulating the exchange rate, since they alleged no direct benefit has been reaped by any section of the community, sixty-five thousand farmers who are closely associated with the dairying industry in New Zea-

land are beginning to realise that, as far as they are concerned, the critical politicians have not been speaking by the book. The challenge of the opponents of high exchange has been taken up by a representative of the dairying industry, who offers chapter and verse for the case he makes out for higher exchange. The statement of the New Zealand Dairy Board that “in the meantime the increase in the exchange rate has been of considerable benefit in enabling the dairy farmer to carry on,” has been challenged in several quarters, but, this champion of high exchange declares that a careful examination of the dairy produce export figures definitely goes to show that the Dairy Board's survey of the position in its annual report is substantially accurate. The correspondent, who addresses himself to a Wellington journal, in assessing the effect of the exchange premium on exported dairy produce, has compiled the following figures covering shipments from January 20, 1933 (the date on which the exchange rate was raised from 10 per cent, to 25 per cent.) to Julv 31, 1933: Estimated f.o,b. value. Tons. £ Butter .. .. 66.801 5,344.080 Cheese .. .. 57,580 2.763.840 Another interesting table is compiled showing (1) the amount of exchange premium on the above estimated values represented by the increase of 15 per cent., and (2) the total exchange premium represented by the 25 per cent, rate: Extra 15 p.c. 25 p.c. Exchange Exchange Equals Equals £ £ Butter .. .. 801,612 1.336,020 Cheese .. .. 414,576 690.960 £1,216,188 £2,026,980 The investigation is carried right through the whole system of supply and distribution. The estimated shipments and value of butter and cheese for the twelve months from January 20. 1933, to January 19, 1934, are examined and are given as follow: Estimated f.o.b. value. Tons. £ Butter .. .. 126,072 10,085,760 Cheese .. .. 100,000 4,800,000 Getting down to the kernel of the question the correspondent says quite boldly that on the above basis the amount of exchange premium represented by the increase of 15 per cent., and the total represented by the 25 per cent, exchange rate are shown as follow: Extra 15 p.c. 25 p.c. Exchange Exchange Equals Equals £ £ Butter .. ..1,512,864 2,521.440 Cheese .. .. 720,000 1,200,000 Total .. £2,232,864 £3,721,440 Something of course can be said in support of other sectional interests that have been penalised by the higher exchange rate, but the challenge the politicians have thrust at the Government, has its basis in the claim that the very interests which the Government intended to assist when it manipulated the exchange have not benefited at all. The correspondent who has take® up the challenge, insists that in the dairying world it is believed in every case they have received into their own hands the benefit of the increased exchange, equal to approximately 14 per lb. butterfat. It is pointed out that all payments for butterfat are made to the factories, and they, in turn, pay out to individual farmers, or suppliers and shareholders. Although we have not been able to check the financial deductions based on available statistical comparison made by the correspondent, the case made out for higher exchange certainly calls for a reply by the critics of the Government who are attempting to attract attention as the real friends of the rural population of the Dominion.