EXCHANGE HITS FARMER

Chronicle (Levin), 4 September 1948, Page 2

EXCHANGE HITS FARMER

Press Association )

Lack Of Preparation And Unfair Meihod

(Per

WELLINGTON, bept. 3. Some of the effects of the reductiaii of the .exchauge rate were considered hy the Dominion Council of I'ederated Farmers who have issued the following statement: It is pointed out that the farmers' incorne from wool is immediately redueed on tliis Council 's basis oi last year's prices for greasy wool by an average of 4d to 5d per lb. Meat producers whose reserve . accounts were being built up by £8,000,000 last year will this year find the accounts only breaking even, or perhaps a little in the red il increases commensurate with the increases in costs are paid. " Dairy farmers, who according to Mr. Nash in his broadcast speech on Sunday, August 22, are to receive "the fuU cost of production," wiil if that is paid draw on their reserves to do so, and unless .costs aro redueed wiil in a few years m the event of falling prices exhaust their reserves accounts and will have to be supported from the Oonsolidated I'und. The seed produeing imlustry, wliich is bcing paiuatakingly and suceessfully built il]) by farmers and Ihe Departmeut of Agriculture, luts been heaviiy iiil witli a cut of £5U(J,UU(J ou last season's oxport ineome of £2,500,000. Tliis trade may now be lost. The Council of Fed6rated Farmers de l>lores botli the lack of preparation foi the altering of the exchauge J'ate and the unfair niethod adopted in bringing aboul Ihe cliange. It should* be reeognised that many people in the coniuiunity will be called upou to bear losses wliich are totally unjustilied and whieh could Jiave been avoided by the use of a difi'ereut method of el'fecting the cliange and spreading the adjustment ovor Ihe coniuiunity as a whole. The baek country sheepfarmer, who works harder for snialler retuni per hour tinui aayone else in the eom niuiiity, is called upon to stand the loss lor the beuelit of othor sections. The (lovernment itself had professed to recognise the ditlicult posiliou of Ihe woolgrower in the baek country as evidenced by its suggcstion that the cost of fertiliser used 011 thc baek country should be subsidised. linmediately following upcm this the Government has slashed the inconies of those baek country farmers. «■ By virtue of the cliange tlio woolgrower is called upon to pay to Ihe mortgagee by way of interest and to the Minister of Finance l>y way of taxation, and to other ]>eople who provide him with service in respect of liis lixed costs, the proceeds of iive bales oi wool where previously the service cosi four bales. For the last few years the dangcr oi oversupply of iuoney in relatiou to a liuiitecl supply of goods has been liupressed on the coiuuiunity by liieinbers of the Government and by the Ministe. of Finance. In particular this argunieut has been used to niake farmers agreo 10 forego payment to theni of portion oi the proceeds from tlie sale of their produce. If through exchauge reval nation lower prices for imported goods do eventuate, pressure by the purehasmg power at present in the hands of the people ou the goods and services available will be considerablv increascd. The actions of the Government in ap preciatiug our money without taking necessary corrective measures is tlie greatest contributing factor to iuflation so far. It lgnores completely ail the Government 's previous preaching aiul indicates that the Minister of I manaia gaiubling on his ability with the use of exchauge and import controls to liohl the posiliou. It is also a ganibks ou tlie willinguess of people not to use the purchasing power already in their possession wliich tliey cannot exercise at present. There was a way in wliich the cliange could have been efi'ected quite fairly and without4any injustice to any section of the comnuuiity. The fair niethod and only equilable oue vvould have been to have frozen all iuoney contracts and lo have re-issued new ones in terius of the re-valued currency. This vvould have spread the currency appreciation evenly over tlie whole comniuuity and would liave avoided the hardships and dillicuities which' will undoubtediy ttccrue to many people botli in business and farming, aird which iii fact have now actualiy arisen from the alteratiou. In view of the Government 's actiou it should now be prcpared iirst to reduce all taxation, including local body taxation, by 20 per cent.; s'econdly to reduce the charge for other Government scrvices such as those by tlie railways and post office by a similar amount; and thirdly, it should ensure that all imported goods are actualiy redueed by the amount commensurate with tlie appreciation of our money. In view of the cliange with the consequeui increase in the real incomes of the consumers of the Dominion, this rouncil demands that all consumers ' subsidie.made at tlie expense of the farmer In. terminated immediately and that farmers be given tlie fiill proceeds from the sale of liides, pelts and tallow, etc, used localiy.