WANGANUI PROVINCE PRESIDENT’S COLUMN

Wanganui Chronicle, Volume 83, Issue 167, 18 July 1939, Page 11

WANGANUI PROVINCE PRESIDENT’S COLUMN

It will be remembered that the Hoosac Mills case held that '‘processing taxes” levied to pay for production control were unconstitutional as production was not inter-State commerce and therefore not subject to Federal control. The 1938 Farm Act was therefore ; Kissed which stressed marketing rather than production. The Act, when challenged in the Supreme Court, was upheld by a majority decision which read inter alia: “The Statute does not purport to control production .... but solely to regulate marketing.” Two justices dissented, however saying: “Whatever may be its declared purpose, the enactment operates to control quantity raised by each farmer.” The 1938 Farm Act, therefore, offers to producers wheat, corn, cotton and rice definite “benefits” (loans “without recourse,” “conservation payments,” “price adjustment payments,” etc.) on condition that they limit their [Bantings and market their produce according to regulations. To date the Act has worked very much the same as the 1929 Farm Board Act and the 1933 Agricultural Adjustment Act. Of the 500 million dollars lent by the Farm Board, which retired in 1933, over 340 million dollars had been written off as definitely lost by 1937. Early in 1939 the Commodity Credit Corporation held nearly 770 million dollars in outstanding loans made to producers and producer-co-operatives on 15 different commodities during the previous five years. The position of these advances is most unsatisfactory, particularly in the case of cotton, wheat, corn and butter. Reference to the position of cotton will clearly demonstrate the ever-accumulating surplus:—

The money to provide these advances was raised from the Treasury by the issue of its own bonds guaranteed by the Government. Congr?ss has appropriated 712 million dollars to be paid as farm benefits during 193!.'. “Loans without recourse” prov..ie that, if the market goes above 1 lie loan rate, the borrower may sell and take the margin, but in any event the security in the produce will cancel the debt (a guaranteed minimum prize;. The Awful Position of Cotton. The cotton problem in U.S.A, is providing the farmers, the Government and the general public wilh much worry. Exports during the past six months totalled three million bales as against live million bales for the same months of the previous season, which figure was the lowest for thhe previous period of 56 years. r !‘:ie increasing supply of foreign cotton has decreased world ptrices, while the artificial regulations of the United States Government have increased the price at which American cotton is offered on world markets. This is the wheat policy followed by Canada and the United States in 1929-32, with the most disastrous results. In addition, the price supporting policy for cotton has been the increasing substitution of cellulose fibres—particularly in Germany. Italy and Japan. The extent of the Government’s price support is shown by the fact that approximately 11* million bales of cotton (almost the equal of last year’s artificially-reduced cro;b are unsold and are pledged to the Government. Valued at to-day’s artificial internal U.S.A, price, the security of the cotton approximates the loans advanced against it. Internal prices for future deliveries, however, are below the spot price, and within two months the new crop will be coming on the market. What is to be done with the present surplus? Will the Government continue to add to its holdings?—Nobody knows. Suggested Ways Out. A scheme was prepared suggesting that the Government sell part of the surplus back to the borrowers at 5 cents per lb, 3.3 cents below the present loan price, on condition that the latter would cut this year's planting by a like quantity. As production costs are above 5 cents, this would afford the landowner a double profit (supposing always that he could subsequently dispose of his produce at to-day’s price) but would be unfair on the sharecropper. The proposal was rejected. President Roosevelt, and Secretary Wallace have proposed an export subsidy, and already prices of cotton and cotton goods, particularly U.S.A, cotton, have fallen in foreign markets from fear of American dumping. The United States laws prohibit dumping from abroad and few countries—least of all U.S.A.—wish to further disrupt legitimate international trade. Argentine Meat Producers. The report of the Corporation of Argentine Meat Producers for the season 1937-38 is just to hand. An extract is as follows:—“The following figures give a comparison between an average Argentine and an average New Zealand lamb, from which the producer can see at exactly which points he should modify the characteristics of his lambs in order to raise them to the level of his New Zealand competitors:—

1934-35 1938Loans outstanding February, 1939. (dollars.) . ... 119,000,000 241,000,000 .... 198,000,000 Pledged Bales. (dollars.) 1.500,000 5,500,000 4,500,000 Total . 558,000,000 (Round figures.) 11,500,000

Selling Yield of Lamb Cuts N.Z. Argentine. per cent. per cent. Legs 29.0 27.0 Chine (hindquarters) 20.0 18.S Quarter (forequarters) 10.0 11.0 Shoulders 24.4 23.4 Breast „ 8.3 9.4 Scrag 8.3 10.4 100.0 100.0 ■ • Meat Yield and Bone Pei Lamb * Cut of N.Z. Arg’tine. meat bone i meat bone p.c. >I.C. p.c. p.c. Legs . 80.5 19.5 77.7 22.3