POSITION OF THE PRODUCER.

Waipa Post, Volume 44, Issue 3181, 24 May 1932, Page 6

POSITION OF THE PRODUCER.

Sir,—There is ajn aspect of ttye present financial conditions in this country which mlust occur to anyone who looks things in the face, and that is the position of the average primary producer. It is generally recognised that the . palmary producer is the pivot on which the economic life of this country revolves, and as such should, before all others, receive every help and encouragement in the power of legislators to give. It is indeed only self-preservation and comimon sense. I emphasise the “average” primary producer, for. these remarks do not apply so forcibly to the producer who is farming unencumbered land; he, of course, will suffer with the rest, and be handicapped and hindered in his production by existing conditions, but his stability is assured. The average producer is the man who has bought land since 1914 (or thereabouts) at the then fair market values, paid a few thousands down, and is trying to work his farm as an ordinary business concern. In most cases, with a fluctuating market for his produce, and an all-round higher standard of living, he has been un-, able to pay off many of his liabilities. This class of average producer preponderates, I venture to assert, and it is necessary to get this man on a sound footing before the problems oi unemployment, etc., fading th,e country can be solved. Help this producer to put his house in order, with a prospect of continuing to do so, and the psychology cf the whole country will undergo a change, confidence will be restored in the farming industry and in the country generally, money will become available for the farmer, and a host of other complications, among ethers unemployment, will be solved to a great extent. How have our legislators tackled this problem ? All theory and no practice is not much use, but most will agree that practice based on sound theory is good business. .We have haii several eminent theorists in economics in this country lately, and they have expressed their views very generally. Among them was Professor Copland, who advocated a free exchange and a 20 per cent cul in all the fixed charges, which, with others, this average producer has to pay. His arguments were well reasoned, not only from, the average producer’s point of view, but from the community’s point of view as a whole. Some of his theories have been acted on in Australia with beneficial results. He was ignored, the expediency of the moment outweighing the longer view, and the more importunate and influential section of the community being listened to, and a deaf ear turned to the i*epresentations of the primary producer, a Our leaders have started at the wrong end of their problem, and may be likened to the owner of a car whose engine is being starved of air and benzine by a faulty carburetter, instead of getting to work on the carburetter, starts tinkering with the ignition and generally upsets the whole working ofi the car. The sir and benzine are the free exchange and rea- ' sonable interest rates, essential for the smooth running of the engine of commerce of this country. Our legislators have made provision for unemployment, cuts in salaries, and pensions, and have made a 20 per cent cut in interest, with one notable exception—that is, bank interest, and these banks are the fountain head of all finance in this country. How ooes this affect the average producer ? His equity in his farm has disappeared, and the consecutive losses made in stock, wool, and dairy produce for the last two years have compelled him to seek financial assistance either from his stock agent or banker, which really are identical as to result, for most 'of the small stock firms base their finance on the banks, and independent stock firms are controlled by their association. Thus the position as desperate, and so, we might infer, is the position of the country, for it is bound inextricably with the fortunes of this average producer. Our legislators have come to the end of their session,, and one gathers that, although it has been a hard row to hoe, yet they feel they have endeavoured to make the best of a bad job. In effect they have abandoned the average producer to his fate, and incidentally their country, for be very sure that that average producer will involve the rest of the country in his downfall. But why is the average primary producer in such straits, The banks are sticking to him, and, according to the statement of the chairman of the associated banks to a recent deputation, interest has been reduced and remitted. I venture to state that if the Minister of Finance had a return furnished, under audit conditions, the advance accounts of the - average producer, together With in- * terest charged individually and compounded half-yearly, as must necessarily occur during a slump, and the amounts of interest actually wiped oft the slate, one of the reasons of his desperate plight would be apparent. And what can he do ? Seek relief under, the-Mortgagors’ Relief Act/. Then, I take it, if he is a secured client c 4 a bank, his finance dries at its source. He discusses ways and means.'iw!ith his bank manager, stock manager (the latter’s hands are tied)*: who- as a rule is a good, fellow and dislikes his present position as much as the average producer dislikes his; but in the bank manager’s case he does: not understand farming, and as bound by castiron rules, and can only reiterate: “ Ship your wool,” profit" :or. no', profit (to the producer); " Ship your lambs,” whatever the prospects. Any suggestion by the producer, where the hank holds the title deeds of his land, that 7 or 11 per cent interest, compounded half-yearly, is • too high a'rate iii the circumstances, Is met with, in.this case, the old slogan, “ The law of supply and demand”' And so the process goes' on, until the average producer will have \Uo 'alternative but to walk off his farm: There must he many hundreds • or even-thousands of producers who have arrived at this cross-road, or are last approaching it. It is impossible to forecast the effect of such a whole-

sale realisation of securities as the departure of the average producer from his land would involve, but it is the logical conclusion to which our legislation and banking system are leading, and is a question our legislators will soon have to face.—l am, etC " F. H. CASH. Marton.