LOWER INCOME

Waikato Times, Volume 124, Issue 20784, 19 April 1939, Page 9

LOWER INCOME

RETURNS TO FARMERS HEAVY FALL IN PRODUCTION MR J. L. FAULKNER’S CONTENTIONS The contention that under the guaranteed price system, with fixed production costs, the farmer-owner has been a heavy loser on the season s operations was made by Mr J. L. Faulkner, secretary of the Morrinsville Co-operative Dairy Company, in discussing the effect of the heavy fall in the Waikato butter-fat yield, due to prolonged dry weather, in relation to butter-fat costs for the current season. Mr Faulkner said the latest return of the Dairy Division for the production of butter-fat in the Dominion from Auugst 1, 1938, to March 31. 1939, revealed a drop in production of 9] per cent. In view of the condition of farming lands throughout the main dairying districts at present, a fall for the season of not less than 12 \ per cent was indicated. The real significance of that fall might not be fully appreciated unless the position in its relation to the standards adopted by the Government to fix the price for the current season was examined. Average Producer Mr Faulkner showed 'that on the standards laid down an “ average efficient ” producer who turned out 12,0001 b of. butter-fat would require for the farm not less than the occupier and one adult male worker. On the standards of the cost established, totalling 17.42 d per lb, butter, which, less the value of pig meat, gave a price of J4.89d per lb commercial butter, a producer would receive £B7l for 12,0001 b of fat, less £7'2 assumed to be already in hand from pig production. The allocation in accordance with the standards of cost laid down was as follows: —12,0001 b at 5.34 d for working, £267; at 3.24 d for capital. £162; at 8.84 d for labour, £442; total, £B7l. The labour reward was to be di- j vlded between the dairy farmer and ; lhe farm worker on the basis of £4 j 106 a week to the former and £4 a 1 week to the latter. Of the total the ; farm-owner would receive £234 and the worker £2OB. Returns to Farmers Due to factors over which the farmer had had no control, weather in particular and stock ailments, the average efficient farmer would receive only 10,4 001 b of butter-fat, and as his gross price remained constant his gross income would be only £762, stated Mr Faulkner. Out of that working costs and capital charges would absorb £4'29 as had been shown, leaving £333 for labour reward- Out of this the farmer must pay the adult worker £2OB at not less than £4 a week, leaving £125 for the farmerowner- This was less than £2 10s a week instead of the theoretical £4 10s, which the Minister concluded was a fair and reasonable return for the service tiie farmer rendered. Concluding, Mr Faulkner said that tiie contentions and conclusions he had shown were irrefutable. The facts that the gross income from pig production had followed the milk flow and that costs generally had increased had been ignored and thus the theoretical reward of £125 for the average efficient farmer was more likely to be in error in magnitude rather than the other way. Mr Faulkner contended that herein lay the most grievous wrong ever done to the industry, which had become so much a chop-ping-block of the politician with no knowledge of the subject, excepting the theorist’s figures of “ what should be.”