FARMING PROBLEMS

Hauraki Plains Gazette, Volume 52, Issue 3284, 5 July 1943, Page 3

FARMING PROBLEMS

INDUSTRY’S NEED

CITY PEOPLE INTERESTED f ADD RESS BY MR SINCLAIR ECONOMIC STABILISATION | Recently Mr A. J. Sinclair, secre-tary-manager of the Te Awamutu Cooperative Dairy Co., Ltd., gave an address at Auckland University College to the members of the Economic Society of Australia and New Zealand on the reaction of the dairying industry to the Government’s plan of economic stabilisation. In addition to a good attendance of members, there was a considerable number of Auckland’s leading businessmen. Dr. J. S. Finlay presided. The Nation’s Doctor Mr Sinclair paid’ a tribute to the valuable work which had been done ' by economists during the present war. “The dairying industry is in a state of decline,” he said, “and the economist is the nation’s doctor. He is versed in all the fundamental laws of economic health. From a mere glance at the Ellerslie totalisator returns of £328,647 over the week-end, he can tell whether this country* is suffering from the high cost of living, or the cost of high living. (Laughter). He can diagnose all the ailments of the body politic—and his. services are much needed in this country at the moment.”

The speaker warned members 01 the society never to take the. dairy farmer lightly even in a discussion on economics when this had a bearing on the dairying industry. “I have been in daily contact with the man on the land for nearly a-quarter of a century now,” he said, “and in all that time I have met only one farmer who would measure up to the specifications of this University because he knew something of the seven material fallacies in Aristotle’s system of logic, and could set out his propositions for debate in strictly logical form, in terms of a syllogism in A, E, I or 0, but I am compelled to add that he was a mighty poor farmer. (Laughter). ■Blit when it comes to sound deduction or clear-headed logic in a friendly debate or discussion, I commend you to the dairy farmer.” A Farmer’s Logic Illustrating the logical manner m which the farmer reasoned out his problems, Mr Sinclair said that on one occasion he had given a biief dissertation’ at a farmers’ meeting on the “vicious spiral,” and had shown the futility of an economic system in which prices always chased coses, and costs then chased prices, a farmer

roused the audience to enthusiasm by making the following brief observations :—■ (< We want you to understand that if there is a spiral going on in this country, we won’t want to be left out in the cold. We want to be in it with the waterside workers, the freezing orkers, the coal miners and all the other people. Admittedly, we would probably go up like a rocket and come down like a stick, but when we fell, we would pull all the other fellows down with us, and for the first time we would be in that happy position described by Mr Walter Nash in his pamphlet on the guaranteed price—namely, on the same level as other sections of the community rendering equal service.”' (Laughter). Currency Inflation In dealing with the inflation which had taken place in the currency system during the past few years, largely owing to the Government’s policy of financing huge State undertakings like the housing scheme by drawing on the Reserve Bank for credit and injecting large sums of paper money into the currency, Mr Sinclair said that the effect of this policy on the dairy farmer could best be understood by taking the following clear-cut statement by the Prime Minister on December 15 last, when the Government’s plan of economic stabilisation was outlined in a broadcast: —

“During the past three years (1939-42) the national income of the people of this country had increased by almost £50,000,‘000; and the production of goods which could be bought with that money had declined by over £40,000,000. There was therefore a surplus of purchasing. power in the country to-day amounting to almost £100,*000,000, and this was threatening to swamp the Government’s price controls.” Mr Sinclair stated that in a country like New Zealand, nothing but good could result from an increase of £50,000,000 in the national income in the short space of three years, provided two conditions were filled. “The first condition,” he said, “is that this increased income should be spread equitably over the whole community, and should not be given only to certain favoured sections. The second condition is that the increased income should be accompanied by an approximate increase of the same amount in the quantity of goods and services on which the money can be spent. When that eventuates, we reach what I sometimes term “the monetary reformer’s Utopia”—’plenty of money, and plenty of goods to buy with it. A high standard of living is achieved, and everyone is happy. Monetary reformers are arguing on

sound grounds when they say that the amount of credit issued should be equated by a corresponding increase in consumable goods.” Problem of Purchasing Power The speaker then stated that the position was bad, but by no means critical, if the increased income was accompanied by stationary production, because there were two effective methods of dealing with the surplus quantity of purchasing power in the community. “One of these methods is the popular and painful method of Government taxation,” he added, “and the other is by a method which is not so popular as it should be in this country, and which has reached its highest point in my native land—nameiy, by inculcating in the people the habit of thrift and saving money. This is an acquired gift in Scotland. (Laughter). In New Zealand the incentive to thrift is not so strong as it should be because of a delusion that a beneficient Government will look after us well in our old age. The position becomes extremely critical, however, when the country is facing the problem mentioned by the Prime Minister. The competition by that huge increase in the national income for the decreased quantity of goods becomes so intense that, if some form of stabilisation is not established, all the price-fixing regulations and tribunals will not prevent an upward sweep in the prices of commodities. It is incorrect for people to say today that the danger of inflation is looming ahead; it has been here for some time, and the dairy farmer knows all about it every time he requires to buy anything for the maintenance and upkeep of his farm, from a spade to a mowing machine.

Industry’s Proposals Mr Sinclair then outlined the proposals adopted by the Dairy Board Conference in Wellington last month advocating a special comprehensive payment as from the beginning of the 1943-44 season, to be calculated on a butterfat basis, and to be kept separate and distinct from the guaranteed price, so that the receipt of this sum would enable the dairy farmer to pay current prices for his farm requirements and yet put him back to the 1938 level of costs, when his prices for butter and cheese were fixed at 14.89 d per lb. and 8.42 d per lb. respectively. In moving a vote of thanks to the speaker, that chairman stated it was one of the most interesting and informative addresses the members had heard for a long time, and on behalf of his society he wished the dairying industry every success in its presentation to the Government of a very sound case.