HILL COUNTRY FARMING

Press, Volume LXXIV, Issue 22520, 30 September 1938, Page 9

HILL COUNTRY FARMING

TO THB EDITOR OF I'Hl PRESS Sir, —Recent announcements tell of guaranteed prices to the dairy farmer, expected to result in a heavy deficiency, and that our railway accounts, in place of showing a surplus of £170,000 for the corresponding period last year, this year show a deficiency of £9OOO. The increase in dairy payments is to compensate for the increased costs because of the labour legislation of the Government. The same may be said respecting railway losses. The products of our sheep industry are as important as those of the dairy industry. The industry receives no guaranteed price, nor desires it, but works on the world's market for the sale of its products, and desires no interference with its liberty. The recent legislation has had the effect of greatly raising costs of management. Not only has it tc bear the costs due to legislation which affect this industry individually, but in the increased costs for all the services rendered by the city it has to bear all the legislation costs that can be passed on to this important branch of our primary industries With the high prices of 1937 the position could be borne, but with the heavy drop in wool prices, labour difficulties created by so many skilled country workers being taken by the public works, it is a question how long much of the hill country can stand the strain. It is an open secret that many places, calling for a considerable outlay in working, failed to square accounts li.ist year.

Mr Savage .announces in his programme his party's intention to extend the. practice of paying guaranteed prices. Does this mean that the Labour Party intends to place the sheepfarmer under such a system? If so, what would be the effect? First. I think it would mean that the Government would get control of all the sterling exchange that results from the sale overseas as the products of the industry, paying in exchange its Reserve Bank notes. This would, I think, necessitate its taking control of imports by increasing credits for the purchase of overseas goods. Otherwise, should we pay out Reserve Bank notes far in excess of the amount received for the produce they represent and spend accordingly on such imported goods as were desired, our sterling balance would soon be exhausted. Would not, therefore, an extension of the guaranteed price simply mean the payment for our produce, and for all labour, in a currency usable in New Zealand but by no means worth its apparent value for the purchase of overseas goods. Would it not, too, mean in effect the reduction of the purchasing power derived from all capital investments, such as mortgages, government bonds, and savings bank interest? r These are important questions. On the one hand the hill-country sheepfarmer wishes to be left alone; on the other, his position is being rendered most difficult by the fact that he has to pay expenses on the inflated scale of costs and sell on the world's market. It seems to him, too, that should there be a big deficit in the dairy account, it will ultimately fall on him and the dairy farmer to pay it, and that they, too, are liable either in increased freight costs or taxation for the continuous drift in our returns from the railways, latterly apparently unable to meet the cost of operation. These rhings have to come from the producer. Our economy seems to have got out of balance. The danger is that, while public activities go ahead at an increasing pace, the industries which are the foundation of our national economy are to be placed in serious difficulty.—Yours, etc., HILL COUNTRY. September 29, 1938.