RATIONALISATION

Evening Post, Issue 37, 12 August 1936, Page 11

RATIONALISATION

THE DAIRY INDUSTRY

NEEDLESS EXPENDITURE

An analysis of the probable working of the guaranteed prices pTan In the light of the prices announced last •week in the Budget was given the "Southland Times" by Mr. D. Rutledge, manager, of the Farmers' Dairy Federation, Invercargill. After saying that the Government had kept its word, giving the average price over the last nine years, Mr. Rutledge went on to say that he thought increased costs would mean a materially greater outgoing for the farmer, and this would not be compensated for by partial cancellation of mortgages, after \ revaluation of land. He advocated the rationalisation of the industry, stating that hundreds of thousands of pounds were spent needlessly each year because of unnecessary and uneconomic factories competing with one another. Under the new prices, suppliers would receive exactly the average of prices for the last nine years, Mr. Rutledge said. That was regarding the matter purely in the light of the relationship between supplier and tory. From the viewpoint of the farmer himself, however, after he received hia cheque he would undoubtedly find an increase in the cost of living. Costs of manures, labour, machinery, and many other items on the farm budget would all have "increased, the total amounting to a considerable sum above the average of costs over the last nine years. The only effort the Government was making to cut the extra expense, Mr. Rutledge said, was the revaluation of land and the consequent reduction of mortgages. [ Any yearly reduction in outgoings because ot such revaluation of land and possible partial cancellation of mortgages would not in his opinion be, enough to meet the increased overhead expenses. There was one way in which the Government could possibly improve still further the conditions under which farmers worked, but it seemed rather timid to put it into operation. That method was the rationalisation of the industry. Many hundreds of thousands of pounds were spent in New Zealand today because of the large number of unnecessary—and uneconomicbutter and cheese factories, and the attendant high pressure competition. If the Government stepped in and exercised an average business sense there was no question that a very comfortable net increase in returns would result from a wise rationalisation scheme.