The Gisborne Herald. WITH WHICH IS INCORPORATED "THE TIMES.” GISBORNE, WEDNESDAY, JULY 12, 1939 FARMERS’ PROBLEMS

Gisborne Herald, Volume LXVI, Issue 19987, 12 July 1939, Page 4

The Gisborne Herald. WITH WHICH IS INCORPORATED "THE TIMES.” GISBORNE, WEDNESDAY, JULY 12, 1939 FARMERS’ PROBLEMS

In opening the annual conference ol the Farmers' Union this week, Ihe Minister el' Agriculture rightly objected to exaggerated propaganda regarding the decline in farm production. Insofar as sheep flocks are concerned, he was able to make out a strong case, but his arguments in regard to the dairy industry do not appear to be so sound and he disregarded the decline in agricultural production which is so largely dependent upon the availability of labour. An increase in the .lumber of beef cattle, for instance, will hardly compensate for the decline in dairying, and it is extremclj difficult to justify increased purchase., jf Australian wheat while New Zealand growers, despite a high guaranteed price, continue to sow less. The position of the primary industries is admitted on all sides to be unsatis factory, and, this being the case, i would be wiser to face the facts instead of attempting to avoid them. If the Minister was unduly optimistic, however, i; would seem that the president of the Farmers’ Union erred in the opposite direction. If, however, there is even a germ of truth in his. assertion that farmers are being put off their land and are unable to meet their commitments under present conditions it is clear that, in the interests of the economic life of the whole Dominion, there should be a careful investigation of the position. Mr. Mulholland has struck at the kernel of the problem by empnasising lie burden of rising costs and he ha ummarised the position in a manner which leaves little room for misunderstanding. As he has pointed out, the prices for farm produce are not unreasonably low. Compared with 1934, the farmer is now receiving £5 15s 9d for commodities which formerly returned him only £5. In other words, he has received the equivalent of an increase of more than 15 per cent in wages. This, however, presents only one side of the picture, for Mr. Mulholland goes on to show that retail goods which cost him £5 in 1934 now cost more than £(i, or an increase of 20 per cent. It is clear that an increase of 15 per cent in wages can be of little value when the cost of living in the same period rises by 20 per cent. This problem, however, is not peculiar to the farmers, because people in all walks of life are finding that the benefits of higher wages are being cancelled out by the rising burden of costs. In the ease of the farmer the position is aggravated by the deductions from his receipts through higher costs between farm and steamer and by the increased cost to transport his purchases to the farm. In other words, rising costs fall with greater severity on the farmer than on the urban dweller. There can be little question that the position of the farmer, based on figures supplied by the Government Statistician, is a good deal worse than it was in 1934—-and in 1934, as Mr. Mulholland reminded the conference, the Dairy Commission reported that 50 per cent of the farmers could not meet their commitments. Since there is no method by which the farming industry as a whole can secure an increase in returns—and, in any case, it is admitted that returns are not unreasonably low—it is only natural that attention should be directed to the question of reducing costs. llow this should be eii'ccted Mr. Mulholland does not attempt to say, but he makes

one striking point when lie refers to the cost of ’general and local public expenditure. According to his figures, this amounted last year to £75,000,000, or more than half the total value of all production. This fact alone provides food lor serious thought, foi if the cost of government is to absorb more than 10s in every pound earned

it is apparent that the people will have to go without many of those things which make for a high standard of living. Again, however, it

needs to be pointed out that tire farmers are not the only section affected by this position, although the impact on them is unquestionably more

serious since they cannot pass any of their costs on.

The uncertainty in regard to the guaranteed price for dairy produce was another point to which reterence was made in some detail. There seems

to be little doubt that the original principle of this scheme has been abandoned and that the price is now fixed according to market prospects and the general financial situation. That, after all, is inevitable, and this is another fact that must be faced. Since the deficit in the dairy account must be an addition to costs generally.

it is no use the farmers protesting against rising costs and simultaneously asking for a higher guaranteed price; but they are right in insisting that if conditions will not permit r higher price the Government should tackle the problem from the other end and reduce costs. Anri this applies not merely to dairy farming, but also to all other branches of farming and industry generally. If wages or re-

turns can be increased to compensate for rising costs there will be little ground for serious complaint, but when the pool out of which all payments must come shows signs of dry-

ing up it is clear that there must be a different approach to the problem. The case for the farmer needs careful preparation and presentation and. the extent to which this can be achieved will largely depend upon the unity of flic farmers themselves and the measure of support they give to what is, in effect, their trade union.