RISING COSTS

Gisborne Herald, Volume LXVI, Issue 19987, 12 July 1939, Page 7

RISING COSTS

EFFECT ON FARMERS INCREASE SINCE 1934 OV HR-VALUED CURRENCY UNION PRESIDENT’S PLEA (Special to t!in Ilernlil.) WELLINGTON, this day. The effect of increasing costs upon the farmer was reviewed by Mr. W. W. Mulholland in his presidential address to 'the annual confex-ence of the Farmers’ Union to-day. Mr. Mulholland pointed out that while prices for farmers’ produce were not unreasonably low, farmers were being put off their land in considerable ’numbers, while many were obliged to make arrangements with their creditors because they could not meet their financial commitments.

“On the basis of the commodity prices index numbers published in the Reserve Bank summary of statistics for May.” Mr. Mulholland said. “I have calculated that in April, 1939, the farmer would receive £5 15s 9d for the same quantity of export commodities which he received £5 for in 1934, tout he would now have to pay £6 0s 4d for the retail goods that he bought for £5 in 1934.

“For wholesale commodities worth £5 in 1934, he would have to pay £5 16s 4d in April of this year, so that to-day, on these figures, his costs are in a somewhat more unsatisfactory relation to his prices than they were in 1934, but on a higher mice level, and it was in 1934 that the Dairy Commission reported that in its opinion more than 50 per cent of the dairyfarmers could not meet their financial commitments if called upon to do so.

“But this is not the whole story. Export prices are f.o.b. ocean steamer prices, not the .prices the farmer receives, and since 1934 there has been a considerable addition to the costs from farm gate to f.o.b. which are deducted from the f.o.b. price before the farmer is paid. According to the 1939 Year Book and allowing for keep, he is now nominally paying 75 per cent higher wage rates than in 1934, but we know that often he is paying more than that.

“Then there is Government expendi - ture. a total general and local government expenditure of more than £75,000,000. Our production last year would be worth perhaps £140,000,000. An examination of the price index numbers published in the ReserveBank summary of statistics gives us the following information: — Export Price Index Numbers (.1909-13 1,000)

1935 (Apr.) 1170 1646 1084 Average Wool Prices in N.Z. “The average prices of wool sold at New Zealand w r ool sales for the past five years have been as follows: Season Pence per lb. 1934- 5-50 1935- 9.14 1936- 15.82 1937- 10.04 1938- 9-19 “It is not possible to make a direct comparison between the price this year and the Court of Review 10year average prices, but if wc take the Napier wool sales for 1938-39, we find that the unweighted average of the prices at Ihe four sales last season was 9.33 d. Gisborne Average

"If, from the Court of Review order fixing average prices for ten years, prior to July, 1935, we take the price fixed ' for Hawke's Bay and Gisborne, which appears to have been based on Napier wool sales, and take the price of the average quality 46/48’s, and of the average quality 44/4G’s wools in the proportion of two of the former to one of the latter, as representing a _ fair average price, we arrive at the figure of 9.25 d, as the basic 10-year average to compare with 9.33 d received this season just passed. “At Christchurch the straight average of the prices at the four sales last season was 9.53 d. The average of the 'Court of Review prices for Canterbury’ average 50/sG’s, 48/50’s, 4G/48’s, wools (without any weighting) is 11.25 d. This shows that New Zealand average prices do not fully indicate the burden of the fall in wool prices on the South Island sheep farmer, who produces a considerable proportion of the finer wools. Nevertheless, an average price of Old per lb should not in itself be the cause of serious difficulty, especially as the other main factor in the sheepfarmer's income, the price of lamb on the London market, has not. this season, fallen below 7d pcf lb.”

Dairy Meat •Wool 1934 . .. 767 1518 1273 1935 . . .. 913 1576 822 1936 . . .. 1046 1596 1107 1937 . . .. 1092 1651 1708 1938 . . .. 1210 1752 1176