WELLINGTON NEWS

Hokitika Guardian, 3 August 1929, Page 3

WELLINGTON NEWS

MARKETING WOOL

(Special Correspondent.)’ WELLINGTON, August 1

The wool market is' depressed and prices have fallen very considerably. At' the London sales which closed last week the price of every quality of wool, with perhaps one or two exceptions, was pence lower tlijin at the sales held in May last. From Australia it is learned that the best authorises there anticipate that the new clip there will realise anything from 15 to 20 per cent less than the clip of last season and that prices that season yielded but a comparatively small profit. Naturally wool growers both in Australia and New Zealand are very much alarmed at the outlook, and in their alarm they are floundering in the sea of economics looking for a way out. The matter came up for discussion at the Dominion Conference of the Farmers’ Union held in 'Wellington last week. The trend of the discussion showed that the farmers who spoke on the subject believe that by attacking marketing costs they would better the position. There were also some flatulent statements about combines. Nothing was said about production costs and yet this is the key to the position, for there is a- big difference between production costs and ■ Marketing costs. It is within the scope and power of the farmers to reduce production cost 3, hut the reduction of marketing costs* is beyond them. Production costs can be greatly reluced'. First of all is the value of the sheep lauds inflated? ,Not so very long ago a farmer assessed the value of twosheep country at £2o' per acre. This may be all right if wool were realising the inflated price of £35 per bale. If next season’s wool realises £2O per bale fanners will be fortunate, and at the price wool from' a £2O per acre two-sheep farm will not pay. That raises the question of whether the current value of sheep land is reasonable No farmer wants to write down the value of his land but prefers to seek ways and means to maintain the inflated value.

Then it is necessary to know whether all farmers are competent, and whether their methods of fanning are economical or otherwise? Then there is the ■'mportant question of protecting secondary industries on farming costs? I.'he farmers’ product which he must sell to consumers overseas cannot be orotected or sheltered, but the product:* can be subsidised as in the case'of fruit

in which instance the local consumer s doubly taxed to subsidise the fruit exported-. The farmer sells in an open market uid buys what lie needs in a. sheltered market. What is the effect? The more protection an industry gets the •'Venter the wages demanded of the industry, ail'd with the help of the Arbitration Cmlrt the vicious circle is continued. What’ is the effect cf all this on farming costs? That is a- problem that needs solving, but’ its solution would'cause- many headaches and farmers are not looking for that kind of worry!

It is easy to* cast reflections on these concerned with* the marketing of wool, and yet the- system is on the best marketing lines known* to the world. Ibe New Zealand method is by no means perfect, but of all the produce off the farm that must be sold to foreign consumers, wool is marketed in the most sensible, the most scientific and in the fairest way possible. It is in effect modelled after the London sales, and the London merchant, whether he deals in wool or cotton, wheat or butter, 'mows his business. Everyone is familiar or should be so with the/system off marketing wool in the Dominion. The brokers do a great deal of work to facilitate the selling of wool, and on the whole their cnarges for a great deal of detail and important work is very moderate. The members of the Farmers’ Union want the present system abolished and a Realisation Board appointed under Government authority. This looks like a repetition of the Meat Control .Board, and the Dairy Control Board. Assuming that the farmers achieve tlieir purpose and a Wool Realisation Board is an accomplished fact what can the Board do? It can certainly put another tax on the farmers to provide sinecures for some lucky man, but it can do little else. The sorting, classing, etc., is now done by the brokers and cannot be done any better. The farmers, of course, hope and believe that such a board would realise better prices than the brokers, but would they? The moment there was a control board in power there would be a decrease in the number of buyers, who will buy what they want in other markets. Even if they do attend in full numbers as now or even in greater numbers that will not raise the value of wool. A horse is easily taken to the trough but he cannot be made to d'

if he lias no desire to do so, and so a wool buyer may attend a sale but he cannot be made to buy at the price he thinks the seller ought to pay for the staple.. The farmers should aim at reducing production costs for it is the high cost off production that is at the root of the trouble.