FARM – GARDEN – POULTRY

Waikato Times, Volume 110, Issue 18408, 15 August 1931, Page 22 (Supplement)

FARM - GARDEN - POULTRY

AGRICULTURAL EVENTS FOR WEEK ENDING AUGUST 22. MONDAY. Stock Sale at Cambridge. Stock Sale at Ohlnewal. I Clearing Sale s> Te Kowhal. TUESDAY. Stock Sale at Hamilton. WEDNESDAY. Stock Sale at Matamata. Dairy Sale at Hamilton. Stock Sale at Kauroa. Horse Sale at IS'garuawahla. THURSDAY. Clearing Sale at Eureka. FRIDAY. Stock Sale at Otiaupo. A LOST SIXPENCE. EFECT ON DAIRYING. j WHAT IT MEANS IN TOTAL. The Aberdeen man had hardly been half an hour in London when “Bang went sixpence"; but his tears have long since been blotted out by the world’s smiles. The sixpence that New Zealand has lost Is a more serious affair; we have not yet reached the smiles end of the matter, and it is not clear when we will. The story of the sixpence Is a story of the price of butterfat, and it is thus told in the “New Zealand Journal of Agriculture,” by the Farm Economist of the Agricultural Department, Mr E. J. Fawcett, M.A.:— Frtm 1922-23 to 1929-30 inclusive, the price of butterfat has fluctuated between 15d and 19d per lb, with an average for ail butterfat produced in the Dominion of 17d over the whole period. An anticipated pay-out of lid for 1930-31 therefore represents a reduction of 6d per lb, which entirely upsets the economic structure of the dairying Industry as built up on the price ruling during the last decade. TTius the 6d per lb, followed cumulatively through all the pounds of butterfat New Zealand produces, becomes about seven millions sterling. "The dairy farmers of New Zealand will receive £7,000,000 less from dairy factories than would have been I the case had prices been maintained j at the level on which the industry , has been capitalised.” Including the ; above the farmers’ gross income de--1 predates by about £7,500,000. ! Again, "whereas dairy farmers ; would have received £12,000,000 as Interest or for wages and labour reward, their Income to meet the same items will be this season in the vicinity of £4,500,000.”

The words “as interest or for wages and labour reward " require some explanation, and other statements In Mr Fawcett’s paper seem to supply that explanation. He assumes that the capital value of the dairy farms of New Zealand is represented half by mortgages and half by farmers' equity. He estimates that th interest payable on both is £9.000,000 a year; therefore half (£4,500,000) Is Interest which the farmer should receive as Interest on his equity, and the other half In interest which the farmer must pay to the mortgagee. But the loss of £7,500.000 makes it impossible for the farmer to credit himself with Interest on his equity; so strike cut £4,500,000 for interest on farmers’ equity not earned this year.

That becomes £3.000,000 of the lost £7,500,000 looking for a lodgment, so it is deducted from the other item mentioned, “wages and labour reward.” Normally “wages and labour reward” on dairy farms is credited with absorbing £7,500,000. Deduct

£3,000,000 not earned this year, and the only money left for “wages and labour reward” is £4,500,000, as stated. Labour reward means reward for workers on the farm, whether hired or belonging to the farmer's family.

The above figures are for the dairying Industry as a whole. In practice, the incidence of the loss, and -the Incidence of its allocation, varies according to the farm and the farmer. The farmer may not charge the debit in labour reward. He may take it out of a totally different farm item, namely, farm maintenance. Or he may do both.

“In an attempt to meet their capital liabilities, farmers are forced to reduce their living expenses, and In many cases the cost of maintenance and working have also been reduced. As fertilisers represent the only cost Item of great moment which is within the discretion of farmers, it is only natural that this should be curtailed.

"As fertilisers represent the greatest single factor in maintaining or Increasing production and lowering the unit cost, a curtallmant of their use at the present time is unsound from every viewpoint.”