BURDEN OF COSTS

Evening Post, Volume CXXVII, Issue 117, 20 May 1939, Page 11

BURDEN OF COSTS

GUARANTEED PRICES

FREE EXCHANGE URGED

"The farming industries are experiencing a bad time, and, though we are not getting slump prices for our produce, internal costs have so reduced the income of the farmer that in many cases he Is experiencing worse times than he did in the slump," said Mr. R. Seivers in his presidential address at the annual conference yesterday of the Makara-Hutt Valley branch of the New Zealand Farmers' Union.

"Figures quoted by Mr. Waite, M.L.C., in Oamaru recently show, that the dairy farmers of New Zealand will have received State assistance to the extent of £957,482 up to the end of this season, while cost increases over the last three years have absorbed approximately £5,000,000, so that the dairy farmer is about £4,000,000. down • due to the operation of the guaranteed price scheme. These figures, of course, relate only to easily ascertainable increases, and, if farm costs other than wages were included, the figures would be considerably more. "The mass meetings, of. sheep farmers which have been held throughout the country are sufficient evidence of what is happening in the sheep industry. Here again, except so far as old ewes are concerned, export prices have not reached slump levels, but internal costs are the cause of th« trouble. POSITION CONSIDERED. "The whole problem of the sheep farmers' position was considered by a special committee of the union and the Sheep Owners' Federation, which met in Wellington and issued an exhaustive report on the position. They recommend that the exchange be 'allowed to find its own level This, of course, would mean an upward adjustment in the guaranteed price for dairy produce, as, if the exchange rate were freed, it would be bound'td rise. In any case, unless Government expenditure in New Zealand is curtailed, iff will sooner* or later be necessary to free the rate, or at least raise it considerably. ... "There have been, suggestions of a guaranteed price for meat and wool,i but the bulk of farming. opinion appears to be against this, mainly for the reason that the average farmer knows that, unless a guaranteed price meant a substantial subsidy, it would not solve the present problems of the farmer.. . "To place the sheep industry in a favourable relative position to the other industries in the country would * require a subsidy of between £5,000,000 and £7,000,000. In view.of the pre- ■ sent state of the country's finance, it seems that it would be most difficult to raise this money. In any case, if this amount were raised internally by any other means except taxation, ,it : would result in an accentuation- of the present sterling funds-internal price level problem. -