AN INVESTIGATION

Hokitika Guardian, 22 January 1931, Page 2

AN INVESTIGATION

THE DAIRY INDUSTRY

(Otago Times)

Tho Ministerial sutmnarirsation of tiie report of the special committee set up by the Government to investigate the ex tec lit to which, the dairy industry is economically embarrassed, and advise it accordingly, suggests that it was framed in fai.i.v circumspect terms. It has probably been recognised that there was reasonable ground for criticism of the coinposit ion pf the commhfce in the absence of direct representation of the producers.

The committee has not, as a result of its survey, presented any sensational picture, It, seems: to have formed the (•'uh lu'sien that the difficulties that are being encountered by the industry are not generally so acute as might have been supposed. The. opinion is expressed that, while a good many dairy farmers are in difficulty owing to the low selling price of dairy products, nevertheless a considerable number

are serui';> in their finance's, even at the present low values, Reservations and oualiiieatii)us must be expected ill such a. report.; A continuation of present values w ili render it impossible, it is considered, for a proportion of the dairv farmers to meet their obligations, hut the committee has not been able to rn (lrfiolv into this matter or estimate the extent of such conditions of embarrassment. With a vT w to a closer determination of the position it makes what is its most important recommendation in the proposal that dairy companies should act as “clearing houses” for the collection ol coufidi ntial information relative to eases of

hardship. It is not exactly a discovery on the committee’s part which is reflect* d in its view that the outstanding factor in respect of costs afieeting the financial position of those engaged in the dairy industry is interest indebtedness represented by mortgages upon land, implements, and stock, the payment of instalments of interest being the most difficult problem that confronts farmers at the present time. It was inevitable, of course, that farmers who aecpiired property at highly inflated prices, disregarding the repeated warnings that were sounded by authorities whose- views ought to have carried weight, should he severely embarrassed by the fall in the prices of produce. "What has happened in their ease is what they were told would happen when the market fell. It is in no way surprising that farmers who, .as the Acting-l’rime Minister put it in announcing the Govern* melit’s decision to set lip a special committee to examine the economic position of the industry, “over-reached themselves” in the purchase of estates or in expenditure, and have had difficulty in normal times in meeting current -obligations, should now find themselves facing an awkward situation.

Apart from this particular aspect, the committee’s report, so far as it seems to reflect the ability of a preponderating number of those engaged in the industry to carry on without financial difficulty for the present at least, may lie regarded as reassuring. A continuation of low prices may he expected, however, to undermine to a large extent tin’s condition of comparative security, and as there are no

j definite indications of any improvement in prices the position is fraught with a good deal of uncertainty. The question of interest indebtedness, which is regarded as the most pressing problem, is a matter which closely concerns the Government, since the State, j which provides nearly half of the total amount of finance for farmers, must j he by far the largest individual mort- | gagee. There has been some suggestion of legislation to bring about mortgage adjustments, and at the recent local conference of Otago producers it was resolved to request the Government to consider the establishment of 1 a Mortgage Adjustment Board in each I district. The more satisfactory method I of effecting adjustments would seem to he by private agreement. It is to be noted that the special committee attaches a good deal of importance to the question of ensuring a continuance of production in the dairy industry at the present level, and, as might he expected, it is anxious to see an effort made to place tlie industry upon an improved footing in certain domestic respects. It makes a number of suggestions hearing largely upon dairy management. While these are certainly valuable, they are not specially related to the present economic position, unless in so far as they touch the question of the use of fertilisers which |is a {footed by tlie farmer’s ability to secure credit.