The Evening Star "TUESDAY, SEPTEMBER 13, 1927. THE FARMERS’ OUTLOOK.

Evening Star, Issue 19660, 13 September 1927, Page 6

The Evening Star "TUESDAY, SEPTEMBER 13, 1927. THE FARMERS’ OUTLOOK.

lx the animal report ol the Department of Agriculture the Hon. Mr Hawke n says that tho present economic position docs not justify the pessimistic altitude taken up by many people; on the contrary, the prospects for our agricultural industries appear to warrant a reasonable confidence. Any anxiety there may bo is not on tho score oi production. Tho sheep and the dairy cow, from which so largo a part of the income from tho land is derived, have eonio through the winter well, and numerically Jlocks and herds aro being built up in successive years. What difficulties exist arc chiefly financial. Our primary producers, so largely dependent on world markets, aro peculiarly situated in relation to costs of production on tho ouo hand and tho selling price of their produce on the other. An important factor in costs of production is the price of land, meaning in very many cases tho interest the farmer pays on his mortgage and the case or difficulty of renewal. Help is offered by the Government in the form of long-term loans on the amortisation principle, in lieu of the usual shortterm mortgage, with , its attendant waste and worry. This will give relief to the mortgaged farmer, but it will not provide him with ready cash, and many of them stand more or less urgently in need of working or liquid capital if they are to maintain or increase production. Tho Minister promises a scheme to afford this by initiating a system of intermediate rural credit. The success of these schemes must depend on tho reception given by tho public to the bonds to be issued to provide tlic necessary funds for ’lending.

In the meantime the producer is keenly interested in prices during the season now at hand. The outlook at the moment is distinctly bright. Particularly does this apply to the dairying industry. Tho 192 G-27 season is one that will long be looked hack on with chagrin. Though operating with a slightly reduced number of cows, the industry put up a clear high-level record in production, nearly 5 per cent, higher than in the record year 1924-25; and never was the quality of both butter and cheese better, if ever as good. But the returns netted were such as to be largely responsible for the decline of ten millions sterling the value of our primary produce underwent as compared with that year. The Agricultural Department’s report touches very lightly indeed on the reason: “ Owing to several adverse factors affecting the British market, prices for both butter and cheese averaged lower than those of the preceding year.” Unquestionably one of those adverse factors was the Dairy Control Board’s venture in instituting absolute control. , The loss to the producer by this experiment is not precisely calculable, but an authox--ity connected with the industry has placed at our disposal certain figures jvhich deserve attention. . In Otago

and Southland last season tho factories’ output of export choose' (front 3,7-1 milk suppliers) totalled 12,500 tons. Tho prices ruling for cheese bcloro the inauguration of absolute control and tho prices which, with control removed, Otago and Southland factories uro now obtaining on tho f.o.b. basis for tho output of the early months of tho season which begins when tho factories reopen in a few days’ time, demonstrate that the cheeso market has stabilised. On the assumption that but for the Control Board’s intervention last season’s dip in prices for New Zealand produce would not have transpired, the Otago and Southland factories would have netted somewhere between Id and 3d-per lb more for their output. At Id per lb, which is decidedly tuo low an estimate, tho loss on 13,501) tons was £110,600; at 3d per lb—which some authorities contend is not too high an estimate, considering ihc loss in interest consequent on the Control Hoard not having even yet squared up payments for perhaps tivothirds of tho cheese ■ exported last season—the loss works out at £253,633. Divided among 3,731 suppliers, this gives an average decline of over £SS in each supplier's receipts—a serious matter indeed to the dairy farmer. It is not surprising that tho efforts made by those closely associated with control to induce tho Otago and Southland laclories to join up with a voluntary control scheme under their administration have so far been practically rcsultlcss. One of tho latest developments in production for export is tho pork industry. As has often been pointed out, an overseas market lies ready, ami tho opportunity exists for tho dairying community of New Zealand to supply it. Mr Kcukcs, Director-General of Agriculture, points out a disability ol a j geographical kind, which ho says eon (dilutes a distinct problem. 'The grout hulk of New Zealand’s dairying is carried out in tho North Island. The dairy factory by-products available for pig-feeding require to be supplemented by grain or its by-products, and nearly all the grain is grown m tho South Island. Tho cost of transport of the grain is an item so serious as to hamper tho development of pig-kccping on up-to-dato and profitable lines in the North Island dairying districts. This brings into prominence the unsatislaetory nature of the interi.slaiul coastal service, and provokes comparison with what it onco used to be in point of frequency and Height charges. For this reason tho demands of tho North Island in tho matter of food for stock have increasingly been Idled from Australia, instead of, as formerly, from the South Island. Tho frozen meat and dairy produce industries have exemplified the benefits of collective bargaining in sectoring freight reductions between New Zealand and Britain, and similar effort might bring about a restoration of better conditions nearer homo.