N.Z. TRADE

Hokitika Guardian, 20 August 1931, Page 2

N.Z. TRADE

•* ; AN' INI’ERBSTINGfi REVIEW^ ! (The Dominion.) 5 ' '■ ; • i' " V[ ' ■ : ’ '■ Several facts of the ; utmost'. sig- ‘ ndhcance are contained in the latest report by the Government Statistician, on New Zealand’s overseas trade. Most striking is the retm-n showingthat •'export pribes are back to prei ,\Var levels while on. the other hand ‘farm expenditure, or production cost, is still 62 per cent, higher than in 1914. Of note, also, is t)ie remarkable adjustment, to balance the heavy decline in export values, jnade by the severe contraction of imports giving a visible favourable balance of £3,571,°OO. _ ■ . As the Statistician points out, the comparison of exports on values is not a true indication of progress ip production. He has therefore taken a base year, 1913-14, and computed the value of the exports of subsequent years pn the basis of prices ruling in that year, thus eliminating the influence of prioe variations and arriving at a satisfactory comparison of output. This method haq been used to show that while the .recorded value in the production year, 1930-31, of J 8 principal commodities, representing 94 per cent of total exports, waa £34,807,000, the value of 1913-14 prices would have been £34,683,000. ' Approximately,) therefore—and the approximation! Is arrestingly close— Zealand is hack to pre.War prices for the great bulk of her produce. That fact in itself would be 'sftribus enough to the producer (total exports last season having dropped to ft! value of 36 millions against an average of 60 millions in tjvoprevious 'ten years) but the force of the blow is doubled / because production costs have declined scaroply at all. 'Herein is til© centre of New Zealand’s^,problem. From* it all other 'problemrfj'kfe dpriyed will not he solved without the reconciliation of this central ..•■■■>• To return to the figures, the Statistician ta,ltes 1000.,;as. an' index of farm expenditure and export prices in 1914. ' Farni expenditure reached 'it 9 peak in 1920 at 1661 but has been little less “in the last three years, at 1642, 1636 "and 1628. On the;' other hand export prices. ;s©re highest ! .'at 1671 in 1919 and 1702 .in 1925; but have fallen heavily' in the list thr^- years; the- respective -indices being T6i2o, 1456 and , 1144. If f 1929 be . compared. F»th 1930, production costs are seen to have only eight points‘while Exports, prices are down 312 points. The divergence in 1930 amounted to 484 points which is far too wide for eebnomm health-;' Whiley-most'-people" may. not be .etatisfcicaly.'mindedy the lessen of the. figured should he clew enough. It js that 6W‘ prirfiitry *in rie* . cannot prosper and that many farmers must be crippled ~ thus ; involving.all;fife rest'of u«, If 'are" not.takfjit'to close the widening gap At prefect there doe* notLseenCto be muoh .prpipech of xnftjp ihg'fhp - leeway/ on the .price side, ' an vjhjteh inany. oase New ; cap eSirib"-.little effective. Influence except her standards, of qua*- ’ eotedito the feductibn of costs in confotttniy with 'the fall, in; prices..- ! is the task, on- which the, Domj motif is ;-at present 'engaged and it will bw interesting to see, when the returns are next. Issued, what impression has been made, on. the farm expenditure index-asya result. Wage and interest xedUctibhfShbijld .have some effect; and in some cases .local' fates, hay© been eased, but on the other hand tax rates arb; higher.. It does not appear on the face of .* it that New "Zealand has yet rome to grips with tlie problem, In fact much more drastic measures may yet have to be taken to reduce costs if the disparity with prices is to be materially lessened. One good feature should not be overlooked, however; Last season was a year of record production and, on preWar values, exports were higher by about 50 per cent, than in 1913-14. An increase in quantities or output has been steady in recent years. . Tlie fear now is whether the reduction of incomings, with, little compensation in outgoings, may not only , check expansion but may cause a decline on - present records. How this may be prevented has been conclusively demonstrated, if Parliament and people' possess the wisdom and the courage to apply the remedy!