DAIRY GUARANTEE

Hawke's Bay Herald-Tribune, Issue 194, 2 September 1937, Page 3

DAIRY GUARANTEE

— PreBS Association.)

"Farmer WiU Be Worse Off," Says Union COSTS RISE NOT COVEKED

(By Telegraph-

WELLINGTON, Last Niglit. "The dairy-farmer will be worse off tlian before by about 4d a lb. of butterfat," said the Dominion secretary of che New Zealand Farmers ' Union. Mr. A. P. O 'Shea, in commenting 1 on the new guaranteed price. Mr. O 'Shea said that he had discussed the matter by telephone with the JJominion president of the union, Mr. W. W. Muiholland, Darfield. Mr. Mulholland had not had the opportunity of making careful cal&ulationg,, but ha estimated that, even with the increase, farmers would be well in debit, becnuse of higher costs. Mr. Muiholland said that members of the Government had criticised their predecessors for attempting to make New Zealand prices and costs conform to outside markets. The Minister of Marketing, the Hon. W. Nasli, had stated that that was the National Government's big mistake, and the Government had declared that its poliey was to insulate New Zealand so that oueside conditions .would not have ihe snme effect on the country as previousEye on Market The new price, however, definitely indicated that this idea had been abandoned; the price ha.d certainly been fixed 'with a careful eyo on probable market realisations. At the samo time, costs had been fixed at the 19ol level and higher. 60 that the new season's price did not give any benefit to the farmer, when examined in conjunction with present-day costs. Mr. O'Shea sai.d that the new pri.ee was an increase on ]ast. year's price of ll-16d a lb. of butter or 13-32d a lb. of butterfat. Stated as a decimal. the increase was .72d a lb. of butterfat. A special committee of the Farmers' Union had estimated the increase in dairy-farm costs since last season at .55.d a lb. of butterfat; the increase in farm "to f.o.b. costs had been estimated, at .5d. It could be claimed. therefore. on a conservative basis, that increases in costs, excluding farm laborn-, amounted to approximately ld a lb. of butterfat. To cover this increase, the farmer was given .720d per lb. of butterfat, ■ so that he wae going to be down by approximately 3d a lb. To this must bo added another 3d to cover the wage increase of 2/6 a week, which would automatical]y take place.- It should be noted that, whatever the increase, the farmer must share it with his employee, so that of the .721 ho would probably get only .47d. The farmer would. therefore, be about 3d a lb. worse *olf than before. Can N.Z. Be "Insulatftd." "It would appear that the Government is finding its policy of insulating the country to be impossiblo, and that it has given up its idea of fixing New Zealand prices irrespective of overseas markets," continued Mr. O'Shea. "Thc heavy costs it has piled up remain, however, and the farmer has had his old trouble accentuated: He has to buy his requirements on the high- sheltered markets of New Zealand and to se]l his produce in open competition ,on the world 's markets. • ' Then, again, the price indicatas that there is conflict of ideas in the Government; this is shown when Mr. Savage's ideas on economie nationalism are contrasted with Mr. Nash's fixing the price with a keen eye to world conditions, _ "In view of the rising costs whicn the industry has to bear, there wiU be great disappointment among thje dairy-farmers of New Zealand," Mr. O 'OShea conQluded.