FARM COLUMN

Hokitika Guardian, 20 February 1932, Page 3

FARM COLUMN

v THE' EXCHANGE QUESTION

A REPLY TO CRITICS

The Farmers’ Exchange Committee, dealing with the exchange question, points out that the' controversy that has arisen over the exchange question, in which some scores of. individuals, organisations, and newspapers are taking part, is degenerating into a controversy of town against country, and one sectional interest against another. 'Phis is to be deplored. In the final'analysis there is on this question no difference in the interests of town and country, capital and labour, or any one section of the community against another. All are equally interested in the restoration of the economic life of the community to normal (health.

The exchange question is only-part ( (the larger question of the economic con dition of the whole community.

The economic storm is world-wide ant 1 of greater intensity than ever kno before. It has struck New Zealand with its full force, and our Dominion i, s now economically very sick. The I acts that there is an exchange question, that an Economic Commission and an Expert Commission are now sitting, that a special session of Parliament has been called for next week, that we have fifty thousand unemployed in the peak of the producing season, are ample evidence ■.hat this statement is correct. Under these circumstances it is no use individuals or sectional interests taking fhe short view of what will be good for them in the immediate future. They must take the long view of what must he done to restore the whole economic structure of the country to normal functioning ■and health, for unless this is done every man, woman and child in the Dominion will suffer. No immediate gains can make up ithe ultimate loss. An economic structure, like any other structure, is built on foundations, unless the foundations are secure, the whole structure is unsafe. If the foundations go the structure goes too-. In our modern civilisation no country can live to itself. Every country is dependent on other countries to • a greater or lesser extent. The measure of this dependence is a country's per capita foreign trade. The foreign trade of New Zealand is per head of its population greater than that ol any other countiy. ■New Zealand’s dependence on other countries is probably, theretore, as great, if not greater, khan that of any other country. Since every civilised country is dependent on other countries, it- is obvious that the foundational industries of every country are its expert industries, because without these it cannot deal with the outer world in any way.

New Zealand’s export industries are its farms. We export practically nothing but farm products. Without surplus farm products New Zealand could not deal w r ith the outer world and our standard of life would go. Our dependence on farm, products is such that every town dweller i s just as much interested in the maintenance and increase of farm production as the fanner himself. Farm products are the basis of our

export and import trade. The volume of both depends on the volume of surplus farm products. Farmers’ purchasing power is the basis of all internal trade. Every town industry is either serving the farmer or serving those who serve the fanner. The prosperity of the towns depends on the farms.

Without the farms the towns would disappear. It is ihe present economic •sickness of the farms that is causing the economic ills of the towns. Cure the ills of the farms'! and the ills of Ihe towns are thereby cured. Many oi those who have taken part in this exchange controversy seem to base their arguments on the assumption that the volume of farm production will continue regardless of the farm financial conditions. This is a wrong assumption. Farm maintenance is now being neglected through sheer inability to meet the cost, and as maintenance goes produc-

; in will go too. Let any town man sit down quietly and try and figure out the. result to this country, to the work he is engaged in, and to himself personally, if the volume of farm production falls off even 25 per cent.

Figures freely, quoted in the Press show that the general level of the value of farm products has in the last two years fallen 40 per cent below the average level of the 16 years, 1914-1929. This only tells part of the story. The figures quoted are P. 0.8. values. What interests the farmer is what he gets on his farm after costs from farm to F. 0.8. are paid, and these costs have been reduced very little. They include- amongst other things the cost of running all our freezing works work s and dairy factories, much of the costs of the railways, etc. Factory and .transport- costs on land and sea average about 40 per cent above pro war, while the farmer receives much less •than pre war. The 'average sheep farmer is now only receiving on his farm about 40 per cent and the average dairy farmer about 65 per cent of the amount he received in -the years 1914 to 1929, and he finds his costs 'inelastic and his returns will not meet them. As most of his costs are outside his fences they are beyond his control.

' Many town critics say write off land values and all will be well. Except for some of our very rich and well placed farms, country lands tor vear s have had no value, they have only had improvement value. A piece of unimproved country land is no more a farm than a bare town section is a factory. Farm development can. only continue if improvement -costs are to be represented m value just - the same as town improvements can only take place. • if the improvements when completed are to be represented in value. Destroy farm improvement values and farm development w ; l| stop, and with the stoppage of farm development, city development must stop also. It is the stoppage of both farm and city development together with the falling off in farm maintenance that is the chief cause of unemployment. Farming, which is our economic foundation, is -crumbling and our whole economic structure is therefore in jeopardy. Nothing can be done to the superstructure until the foundation is put right. It. i s the duty of everyone to concentrate on putting the foundations right, and with this done most of our other troubles will, right themselves. Until the found;;-

!tion s "aref attended to no other lasting remedies can be 'applied. Returns on the farm over fifty per cent down and costs very little down tell the story of our economic troubles. It is impossible ito bring costs down quickly enough 'to meet the position. A rising exchange helps farm returns white costs are being brought down. Farmers -think a free- exchange will mean a rising exchange. They argue th'at'- 'the compulsory exchange pool was organised to prevent exchange rising, not to prevent it falling, and if condtions were not such as to enforce a rise in.exchange there would have been no exchange pool This is not a New Zealand problem, it ia a world-wide problem. For the last ten years every country in the world has been fighting to bridge tlny/gap between costs -and the values of its- export products. and with the exception ot four, every country in the world has only been able to meet the position by letting its exchange’go. The four exceptions are the United States. Holland, Switzerland and South Africa. The three former made immense sums out of the war, and South Africa has gold'as its export line, which is the only product in world-wide demand that has risen in value. New 'Zealand economically is at the present moment going down hill. The fall can only be arrested and a s tart towards economic recovery begun when farmers -are in -a position to pay heir way.. The Farmers' Committee appeals to every man and woman to think farming during the next few months. It is only by helping the fanners that town people can help themselves.