COST OF PRODUCTION

Waipa Post, Volume 31, Issue 1764, 29 May 1926, Page 2

COST OF PRODUCTION

DEAR MONEY AND DEAR GOODS.

THE PRODUCERS' WAGES.

A farmer's wage, -writes Mr Frank Colbeck, of Morrinsville, 'i s the difference between what it costs to produce and what he gets for his produce when he sells it. You can increase a farmer's wage either by raising the price of his produce or by reducing the cost of its production. Mr MoLeod knows that nothing that we can do can materially alter the price we receive, because we have to sell in competition with the rest of the world, so he approached the subject from the other end and says in effect that our cost of production is too high.

I't is thi s question of reducing the cost of production that is going to solve our difficulties. The cause of all our troubles at present is that farmers' wages have not risen in the same proportion as other workers' wages. I think it will be granted by all your readers that practically "wages are the mother of costs," so that we can take wages as representing costs to> the farmer. I give below a table ?f wages received by various workers in 1913 and 1922:

You will observe that the increase in wages varied from 64 to 100 per cent., the highest being 100 per cent, and the lowest 64 per cent. Take in comparison with this what a farmer receives for butter. In 1913 the average monthly payout by the New Zealand Dairy Association was Is OJd with a bonus at 'the end of the year of 2d or a total payout of Is 2?jd per lb. of butterfat.

In the 19124-25 season the New Zealand Dairy Company paid out roughly Is 6|d per lb. butterfat. This shows an increase over 1913 of roughly 27 per cent. The position is then that the Ifarmer has only an increase of 27 per cent, to pay for all he requires which has increased from 64 to 100 per cent. It Is quite clear that this state of 'things cannot continue indefinitely. The farmer is gradually but surely drifting on to the rocks. The small farmer is putting up a very good fight to save himself. First of all he worked longer hours, then first one child and then another drifted into the cow yard and now his wife

is there too. The cry that "he paid : too much for his land" is only one I item. It costs twice as much to make I a farm to-day as it did in 1914 and the cost of running it when it is made is twice as great. How can you expect more output und,er such conditions? !A S a matter of fact the volume of production is not increasing. It is only the high price of our produce in the British market that is enabling us to pay our way. Should a slump come in the price of our products we should be in a very dangerous position. The only hope for the farmer is a reduction in the cost of production; he must have cheaper money and cheaper goods, or gradually production will fall in volume. I think that both the Minister of Lands and the Minister of Agriculture are fully agreed about the disease. I wonder will they administer the only possible remedy.

191S 1922 s. cl s. d 48 10 96 11 Timber workers 51 0 88 1| 61 101 104 n Waterside workers 59 03 99 0 52 6 91 8 61 V> 101 1