The Guardian And Evening Star, with which in incorporated the West Coast Times. MONDAY, JANUARY, 12, 1931. DAIRYING PROBLEMS.

Hokitika Guardian, 12 January 1931, Page 4

The Guardian And Evening Star, with which in incorporated the West Coast Times. MONDAY, JANUARY, 12, 1931. DAIRYING PROBLEMS.

Latkly there was a demand by the Farmers Union for an investigation of the plight of the producers owing to the drop in commodity prices. Dairy produce lias been the cause of great/ wealth accruing to the country, and has been a very material aid in the sustained development of the Dominion. In due course the Government agreed to set up a committee of experts to look into the dairying inter•ests to' ascertain the cause of the embarrassment of the industry and suggest some form of relief. The main trouble, of course, is the decline in values on the market of the produce from dairying, and the task of the committee is to review the situation economically and so what can be done. The situation is naturally beset with considerable difficulty to find an adequate remedy which can be applied equitably all round, and in fairness to other industries. However, the following points have been suggested as a basis for consideration by the committee : (1) The economic position of the dairy farmer under the conditions of the market values for dairy produce ruling during the eight years before July 31st last. (2) The economic position of the dairy farmer under the current market values, including (a) his estimated gross income per acre, (b) bis estimated expenditure per acre necessary for maintaining the normal level of production, (c) bis estimated net revenue after meeting the necessary operating and maintenance expenses and other financial obligations, but not including either the charge for labour or for the farmer himself or his wife or any ouargr for interest on the capital value of freehold land or buildings. (31 The effect upon business firms and financial institutions of the nonpayment- by dairy farmers of their obligations and the extent to which failure to mee+ such obligations is like.lv to come about- it the present low level of market, values continues for any length of time and no assistance is rendered. (41 Tf the committee, after fully considering the position from all points of view, considers that some measure of relief is necessary in order to main-

tain the industry in a position to continue production at or about its present level, how such relief can best be given.

The committee chosen to go into this matter has been selected from the larger dairying centres-of the Dominion. They are mostly identified with large factories, and will thus be familiar with the financial aspect affecting suppliers. It is evident, however, that very little can be done through the agency of the Government, as the price for the dairying commodities is really the deciding factor. Prices have been low, but there is an upward tendency, and on top of the improved price, there is also some monetary advantage at present in the exchange rates. For instance, at the existing rate of ex- . change, blitter at Tlolric at 12Js will give 12-ls in Neiv Zeftlabcl, thaliks to the advantage utider exchange rates. Butler, therefore, gives promise of cohiirig into its oil'll again tb all appreciable extent, il fact Wliicll tviil lighten the task df the coinihittfee, ahd giVe less obilcefn tb the GoVeffimeiit about remedial measures, But the committee will probably go further than that, and will Work into the internal workings of the Industry, It is inn perative for the producers to cut their costs of production wherever they can, before all the blame is placed on commodity prices. An overhaul of producing costs will doubtless reveal ways and mean of making savings, and thereby improving the returns on butter prices. This is a necessity now if we are to accept the decline that flutter prices are not going to soar again, but will remain at a lower level for some indefinite period. Economy in production is therefore essential, and it is for those controlling producing concerns to see that savings are made where possible so that the suppliers will be put in the way of securing a better return for their labour. Probably along these lines will he the best result which will be obtainable from the work of tin's special committee. In -other words, the suppliers must help themselves by cheapening production costs and go gaining on the value of the butter fat,