DEMOCRATS AND THE FARMER

Wanganui Chronicle, Volume 79, Issue 268, 14 November 1935, Page 10

DEMOCRATS AND THE FARMER

Sir, —Since the exchange question is being made such a first-class political issue and since the paternity of that precocious child the Democrat Party—is almost wholly “the laised exchange/' it is strange to find such red-hot anti-exchange resentment so coolly claiming to be the farmer’s friend. The New Zealand farmer was presumably expected to grin and bear the greater money income of his competitors supplying the same market. The New Zealand manufacturer must not sutler the “lower” production costs of “his’’ competitors supplying the same (New Zealand) market. The “fix it all up in a twinkling” Democrats, having analysed our entire national affairs —have solved the problems which have baffled the whole world—and incidentally solved the farmer’s problem. In the same breath they have the impudence to speak first of wholesale extension of secondary industries and then of further development of our basic industry of agriculture. Strange bedfellows surely, as mutually exclusive as oil and water. The IDemocrats hope, by facing both ways, to fool the country to accept such unsupportable rubbish. We apparently do not possess an agricultural economy, nor do we possess an industrial economy—just an indeterminite, indistinguishable - hybrid economy—until the Democrats get into office! What type of national economy they would then favour is abundantly clear; the cloven hoof is not very well concealed. The keystone of their policy is this delightful “exchange alternative,” this eminently suitable and simple process of subsidising those farmers who need it “to the full equivalent of the present exchange bonus.” This exchange alternative can be based on two indicators only, viz., either the gargantuan process of annually investigating every farmers’ business affairs and paying a subsidy accordingly, or by using the meaningless and criminally misleading export index figures as the basis of such payments. Of the first, it is quite, apparent that the larger farmers, to say nothing of the wealthy squatters, get nothing. It is only the under-dog, the struggling small farmer, for whom their hearts bleed. Like a beneficent Santa Claus, they would examine his accounts and distribute charity accordingly. The small farmer who worked his fingers to the bone, who used the unpaid labour of his wife and family—and on such unpaid labour showed a moderate profit —would not come within the scope of the Democrat charity machine. Unlike the wealthy New Zealand manufacturer who is in receipt of a Hat rate tariff subsidy—just as much as the small manufacturer —there is no such flat rate reward for the farmer who by sheer personal industry anil efficiency makes a success of his business. So long as he can carry the deadweight of our uneconomic high internal'costs and show any profit, unlike the manufacturer, he gets nothing. Would these champions of justice and of the sanctity of contracts, who would flatten out the exchange overnight, dare broadcast iu our cities that they intended to also flatten out the tariff wall? Would they dare to say to the small manufacturer in the back streets —to say nothing of the wealthy manufacturer —we will pay you up to full tariff rates, if, on inspection of your books, you need it.’ No, it is their intention to almost double the workers iu our secondary industries. The very foundation of economic jusitiefe within the coniines of a country, is equilibrium in the- exchanges of goods and services. Of a given quantity of farm produce being capable oi buying a given quantity of city good; and services and vice versa. These perfervid champions of economic justice do not possess a yardstick wherewith to gauge an equilibrium in the exchange of town and country goods and services.

us educate them a little —introduce them to the moth-eaten and crumbling foundations underneath the gaudy trappings which hide their economic nakeducss. They display an easy familiarity with the farm problem. Having produced this remarkable exchange alternative —this undelined and indefinite charity’ they have it solved. Only the farmer's own limitations, his lack of industry and management efficiency, can prevent him from achieving unlimited success in this golden age about to be ushered in. It is only the farmer’s inborn ignorance and primitive suspicion which prompts him to question where he comes in, in the following delightful arguments Mr. Mander, ol the New Zealand Manufacturers’ Federation, proudly placed before the recent Tariff Commission (though, advisedly, not chick by jowl as the writer has done) as an overwhelming argument in favour of a retention of tariff protections: —Steam coal: U.K., 14s; N.Z., 335. Electricity: U.K., to ljd; N.Z., 7-8 d to lid. House rents: U.K., 6s to lid; N.Z., 22s 6d to 32s 6d. Wages: U.K., 49s 6d; N.Z., 755. The New Zealand worker, with 25s 6d per week more than his United Kingdom counterpart, strongly resents paying * as much in New Zealand as United Kingdom retail prices - ’ for his farm produce. With his 50 per cent, greater money wage, he is paying in ••real money’’ not “as much as his U.K. confrere,” but only two thirds the price the United Kingdom worker payers. Who, then ,enjoys the benefits of our high money wage? Would the Democrats “solve” this problem for us? The Democrats have admitted (perhaps in advertently) that agriculture is our basic industry. \\ ould they kindly inform us how this basic industry can face such disproportionate internal costs and continue year in and year out, to sell in that world of lower price and wage-levels, not only his exports, but also his internally consumed farm produce also purchased at export prices. Would the Democrats enlighten us as to what, if any, are the compensating benefits enjoyed by our farmers, that our entire national standards of wages, electricity, steam coal and house rents are 50 to 300 per cent, of the price levels of the only market of this admittedly basic industry of agriculture. It is a question which demands an answer. Let the IDemocrats answer il. Which facts have a startling added significance when wc reflect that New Zealand is the world’s greatest per capital exporter. From memory, the following comparative percentages of total meat production exported, is also significant:—New Zealand 53 per cent., Argentina 40 per cent., Australia 33 per cent. The Farmers’ Exchange Committee produced the following official Year

Book indices for November, 1932, as indicating the imperative necessity for raising the exchange in January, 1933: —Wages 13977, retail 1291, wholesale 1213, export 769. The farmer’s £ (i.e. his produce valued at £1) would purchase 12s worth of city goods and services—and this by using that export index of 769, which is falsity its very self. Remem ber, too, that this farmers’ Government had already “flattened out the workers’ purchasing power” by slaughtering wages! The wage-earner could only then purchase £2 worth of farm produce for his £1 of wages! Clearly the Democrats are right; justice and the sanctity of contracts must ever be foremost in our minds; the farmer must not be further permitted to be spoon fed*. His annual accounts must be inspected (but he will not be inflicted with the indignity and the serfdom of the present Government’s budgeting tyranny) and the needy cases graciously and joyously given this indeterminite and temporary annual Xmas box, paid once yearly and not automatically in sales of farm produce, as now. The vicious burden of the raised exchange waked them into feverish action on their own selfish behalf, but their slumbrous indifference to the following national and farm conundrum continued unmolested:—November 1932 meat prices: Smithfield (London), 100 per cent, of 1914; ship*, side (N.Z.), 77 per cent, of 1914; at the farm (N.Z.), 50 per cent, of 1914. Just 50 per cent, of the farmer’s 1914 fatstock prices were swallowed up in increased costs to ship's side and to increased ocean freights to London! And meat is roughly’ 50 per cent, of the livestock (sheep and beef cattle) farmer’s gross income. This, the basic reality of this basic industry, the Democrats intend to expand along with their glittering extensions to secondary industries. The IDemocrats intend plastering the large landowners with a ruinous land tax. The dairy cow and smiling dairy farm homesteads are to replace the fat lamb and fat bullock, so wc need not worry over the above figures. We are going to export butterfat, instead of meat! The medium of contact with his city fellows of these projected new farmers will be the pound of butterfat. Au already over-produced (and statistically permanently so) product will, under the magic wand of the Democrats, be further over-produced, to the detriment and ruin of those now legitimately engaged in dairy farming. One would be justified in assuming that these dreamers of transparent dreams envisaged an inexhaustible market such as London or New York at the very back door of their planned subdivisional legislation. The old economics wo,uld demand that those supplying a gradually diminishing market over the world’s most costly ocean freight route, should maintain such production in large units. And not, as though we were a Holland, a Belgian or a Denmark, in five to 25 acre holdings. The Democrats plan a peasant class, but overlook the central factor of our not possessing—as other peasant countries do—the internal economic conditions which- make the peasant possible. New Zealand must have either unemployed workers, or unemployed farmers with 60 per cent, to 70 per cent, of our farm lands abandoned. The old economics demand the one or the other; it forbids the Democrats’ middle course. Intensified one-way trade, as they envisage, must inevitably lead us to no extern: I trade at all. Let the Democrats remove the mark of deceipt and say definitely which they favour. Superficial thinkers are legion who question the present administration’s policy of insulating the farmer against the unbridged gap between costs and prices, believing as the Government did that in keeping the farmer on his feet and our exports maintained, that the cities would also share in the farmer’s bettered conditions. The hollow argument is fondly held that if the towns and cities had had the consideration—and not the farmer —that they would, by some undefined mysterious means, have kept the farmer going. Basic economic facts belie this solution.

Of the total production of livestock farming, the following quantities are exported:—Lamb 92s per cent., cheese 9'l per cent., butter 80 per cent., wool 97 per cent., mutton 50 per cent., beef 20 per cent. If such city arguments held water, which they do not, the internal demand for beef would make its own price. Instead, it merely follows the varying values of that microscopic 20 per cent, exported. By some strange reasoning our towns and cities consider themselves as economic units separate from and independent of our basic industry of agriculture. Since we have not always had secondary industries, it is elementary that prior to the advent of such industries, our towns and cities were then absolutely and completely dependent On that basic industry. They were thin, under the economists’ division of labour, drawing a legitimate (if fair) tribute from the active primary producers, for the services they were rendering to that basic industry—as indirect partners. Would these superficial thinkers who think otherwise kindly tell us the exact date at which our towns and cities ceased to be partners in and dependent on that basic industry—just when they became a separate and self-supporting economic unit. (Dare they deny and prove that our cities are now, as then, still absolutely dependent on that basic industry? Our entire’ national problems have their genisis in the money charges these ancillary city services have levied on the basic industry. The results of our vaunted social and industrial legislation are embalmed in Mr. Mander’s comparative U.K.-N.Z. basic costs. They lay bare the hopelessly disproportionate toll that such social and industrial legislation has levied on the entire processes of farm production. To use Gresham’s Law to illustrate the point, our towns and cities have put their spurious money into circulation and driven the farmer's “sterling leased” £ out of circulation. As with the wage-earner his extra money wages, so also with all city services in the high money charges they have levied on our agriculture, they 1 also have conferred no benefit on our basic industry to compensate for the vicious insensate and nationally ruinous price levels which they have, by sheer weight of numbers, imposed on farm production. The percentage of total farm produc- , tion exported belies any claims to , prosperous towns and cities keeping ■ the farmers going. It is not merely , idle —it is deliberate deceipt for the Democrats to claim to the contrary. Darc the Democrats re-examine the foundations of their visionary, oppori tunist policy and face an audience of • electors and still so confidently claim

to be such champions of justice, of the sanctity of contracts and of learning? Economic nationalism for the manufacturer, wage protection for the worker and the old economic (the law of the jungle) for the farmer, is the only brand of justice envisaged by the Democrats. Their case against or their mythical measures towards solving the farmer’s troubles are either not proven or meaningless rubbish. The Democrats cannot plumb the depths of their own ignorance nor gauge the effrontery of their claimed solutions. Finally, would the Democrats, in I heir newly-found wealth of economic learning, care to attempt to define “an export index figure”? We would then see how much—which is very little—they know when they claim to be “the true friend of the farmer”! We would then see whose contracts have had the flavour of “sanctity” about them. iDare they?—l am, etc., R. O. MONTGOMERIE. Private bag, Wanganui, November 9, 1935.