THE FARMING INDUSTRY

Wanganui Chronicle, Volume LXXXIII, Issue 19769, 17 February 1927, Page 6

THE FARMING INDUSTRY

In any survey of the present economic condition of ths Dominion, and in any anticipation of the course which evenls may take in the near future, there is one aspect that must not be overlooked. Wo have spoken above of the factors which may reasonably be expected to ensure a return to better times. But there is another to which special reference deserves to be made. That is the condition of the farming industry. It is the fashion in some quarters to affect a belief that the farmers are rolling in wealth, and to support the statement by pointing to their spending during the boom years, as if the farmers were the only class who so offended. The plain fact is that, during the past few years, the farmers, as a body, have had less to spend than any one else. Their revenues have looked big, and they have appeared—but only appeared—to be spending largely. But that was only because their costs grew with their incomes. What with the high land values, the continual struggle to meet interest and taxes, the greater cost of handling produce and getting it away to market, and continual rises in the prices of materials, the nett income of the average farmer, having regard to the decreased purchasing power of the sovereign, has actually been worth no more to him than it was before the war.

The Prime Minister gives it as his opinion that high land values and over-capitalisation are the chief causes of the farmer’s present troubles. Mr W. J. Polson, Dominion President of the Farmers’ Union, while not ignoring this view, stresses the point that high costs are equally responsible. It is plain, for instance, that every rise in the wages of those who handle primary produce, as well as every increase in service charges generally must hit the farmer. These increases are not confined to one channel; they operate in numerous directions, and produce is taxed in a score of ways after leaving the farm and before reaching the consumer. Unlike the mercantile trader, the farmer cannot “pass it on.” He has to pay the charges, and, however large his gross income, watch his nett - return diminish.

Land values and over-capitalisation will perhaps adjust themselves in time, though the process must he a gradual one. But there is no sign of any satisfactory adjustment in regard to wages and other costs. It is time, therefore, that stock was taken of the position. The continual forcing up of wages and costs, hard enough as it may be on the trader, can only end in disaster to the farmer. And a country which depends almost wholly on its primary products cannot afford to see the farming industry decline.

As Mr Polson points out, production costs must come down, and unless those who depend upon the handling of produce or upon the supply of material for production are prepared to accept this view, they, as well as the farmer, will inevitably suffer. While we are justified in looking forward with confidence to renewed prosperity, and in determining upon increased production and harder work to attain it, the results will fall short of expectations if the principal industry of the Dominion is to be penalised by higher costs at every turn.