FINANCE AND COMMERCE

Nelson Evening Mail, Volume LXIV, 15 January 1931, Page 9

FINANCE AND COMMERCE

DAIRY FARMERS' POSITION

COMMITTEE REPORTS RELIEF IN CASES OF HARDSHIP MR RANSOM’S STATEMENT FULLER DETAILS WELLINGTON, 13th January. The report of the Special Committee set up by the Government to investigate the economic position of the dairy fanners, arising from the receipt of exceptionally low prices for their produce, lias been received by the Minister for Agriculture (the Hon. A. ,T. Murdoch), and a summary of the findings was issued to-day by the Acting-Prime Minister (the Hon. E. A. Ransom), who made reference to the attitude of the Government on certain points raised in his statement. Mr Ransom said the Committee was of the opinion that the present Jow values for dairy produce would make it impossible for a proportion of farmers to meet their obligations. Among other suggestions by the Committee was one that the dairy companies should be asked to act as a “clearing house” for the collection of confidential information concerning cases of hardship. The Government had adopted this suggestion, and upon the information being received it would be possible to go into the question of granting relief. Another point emphasised by the Committee was that production should be kept up, and it made suggestions to this end. The Committee drew attention to the danger of neglecting topdressing, emphasised the value of herdtesting, and urged the companies to avoid overlapping in cream collection, suggesting amalgamation of some concerns with a view to eliminating needless costs.

Mr Ransom said the report would have prompt and careful consideration. The personnel of the committee itself was mainly composed of men who, as dairy company managers, secretaries, etc., are intimately associated with the business and financial aspects of the dairy industry, together with the Director of the Dairy Division, the economist to the Department of Agriculture, and the secretary of the Dairy Control Board, Mr Ransom said. In addition, the chairman of the Dairy Control Board, the Director-General and the Assistant Director-General of Agriculture atended in order to render all the assistance possible. The Department of Agriculture provided a quantity of statistical information based on an economic survey of 1654 dairy farms in the North Island, which proved very helpful. Speaking generally, the committee formed the opinion that while in figures a good many dairy farmers were in difficulties owin'* to the low selling values of dairy, produce, nevertheless a considerable number were, by virtue of high production and a freedom from excessive financial liability, secure in their finances, even at these low values. HEAVY FALL IN VALUES “It is, however, obvious,” said MiRansom, “that the heavy fall in butterfat values represents seriously reduced capital invested in land, stock, etc., upon which interest can be paid. It was concluded that a continuation of the present low values for dairy produce will render it impossible for a proportion of daily farmers to meet their obligations. Ihe committee felt itself at this stage unablo to estimate the extent of the chfaculty or to make any concrete suggestions regarding relief measures, and considered that in order to obtain a clearer understanding more definite knowledge was needed. “In order to obtain this, it was recommended that the dairy companies should be asked to assist by acting as clearing-houses for information as to cases of hardship among tutu- . suppliers, and perhaps in an intermediary capacity. The Government has decided to adopt this suggestion., as any suppliers concerned would probably be willing to give the necessary information in strict confidence to the companies. When this information is obtained and reviewed it will be possible to arrive at some conclusion, as to the extent of the dimculty existing, and to consider the question of relief in accordance with such conclusion. INTEREST INDEBTEDNESS • “The data available led the committee to conclude that the most important factor regarding costs, as affecting the financial position of the dairy industry, is the interest indebtedness represented bv mortgages upon land, implements, stock and chattels; and that the payment of instalments of interest appears to constitute the farmers’ most difficult problem. An important matter having a direct bearing upon the general position is that of ensuring a continuance of production at or above the present level, and the committee was of the opinion that consideration should at once be given to the question of taking any necessary and practicable steps to ensure that efficient fertilising of dairy-farm pastures he continued. “Evidence was produced to the effect that in some areas at any rate, mucli less top-dressing would he done this season, with a probable result of lessened production. Much thought was given to this, and recommendations as to meeting the position were framed for the consideration of the Government. “It was also resolved that continued efforts should be made to increase the herd improvement and the yield by herdtesting, seeing that increased production means decreased cost. QUESTION . OF OVERLAPPING “Another matter which was discussed was that of the effect upon the dairy companies’ costs of overlapping cream collection for butler factories, ami milk collection for cheese factories; and it was recommended that dairy companies might profitably investigate tins overlapping and the uneconomic competition between co-operative companies, and further, that in some districts consideration could with advantage he given to the amalgamation of factory interests, either in part or whole. There is certainly a great need for reform m this matter of overlapping in the co - lection of cream and milk, and the ad’ditional cost resulting from it causes a definite avoidable loss which naturally falls back upon the producers. Another recommendation made hv the committee dealt with the intensification of instruction and research aimed at improvement of the standard of dairy farming and the health of dairy stock, including continued improvement of pastures and the best-known methods in the use of fertilisers; and the maximum economic, conversion of grass into butterfat. Among other matters considered and reported upon were: — (a) The utilisation to the best advantage of dairy industry by-products. (b) Cheaper stock foods. (c) The effect upon business firms and

financial institutions of the present low returns to dairy farmers. Resolutions dealing with these questions were submitted. PROMPT CONSIDERATION “The whole report will have the prompt and very careful consideration of the Government,” said Mr Ransom, “and if, as seems likely to be the case, it seems necessary after securing the additional information required to consult the committee and the heads of the dairy industry again, this will be done. The assistance already rendered by the committee is very highly valued.”