PROBLEM OF TO-DAY.

Otago Witness, Issue 4030, 9 June 1931, Page 72

PROBLEM OF TO-DAY.

REDUCING PRODUCTION COSTS FARMERS WARNED. The president of the Otago provincial executive of the Farmers’ Union (Mr J. D. Revie), in his address to the annual conference on Tuesday, dealt at length with the problem above all others which is exercising the minds of producers throughout the country to-day—the relation of the cost of production to the market value of produce. He directed special attention to the fact that the farmers of. New Zealand could do a great deal to help themselves to shake off the current depression by means of a return to the rigid economy, industry, and thrift which, in his opinion, were now almost forgotten virtues as a result of the boom times that had been experienced in the past decade. His address represented a new departure, inasmuch as it was con cerned mainly with the extent to which farmers, and the nation as a whole, could work out their own salvation, instead of relying entirely upon legislation and State assistance. Through the reduction of production costs and a drastic curtailment of public and private expenditure, Mr Revie indicated how the existing crisis could be weathered and probably shortened. U ? have an idea,” he said. “ that in considering our position too manj- of ns are inclined to overlook the fact that we are ourselves in a large measure responsible for many of our troubles, and I would also like to stress the point that while we are busily engaged calling upon the Government to lift us out of the financial morass into which we have been precipitated, we are inclined to overlook some of the obvious ways in which we might ourselves improve our position. It may seem platitudinous to repeat them here to-day, but the fact that they are not all easy op pleasant to do evidences the need for their repetition. Mans of the difficulties confronting us to-day are, of course, beyond redemption by any effort of ours, but there is no doubt that there are some directions in which the farmers of New Zealand can go about working out their own salvation, and in this connection it would be as well to remember that beggars cannot be choosers.”’ In the first place what was their position at the present time? There was no

need for him to weary them with figures of production and value. They had been frequently quoted lately, and they were all more or less familiar with them because they affected their position and their pockets. It was sufficient to remind them that wool, dairy produce, meat, and in fact every exportable commodity upon which they depended for their livelihood had slumped in value until prices were now back to. or below, pre-war level, which meant that they were below the costs of production, since costs had not returned to the pre-war level with the prices of produce. There was small consolation in the realisation that they were not alone in their misfortunes. Trade generally was more or less at a standstill, and the grievous character of the unemployment problem was represented by the fact that in this tiny country there were over 40.000 men out of work. The financial soundness of the country was in danger, and it behoved them instead of looking towards Australia with pitying eyes, to see to it that they, too, did not descend to her parlous condition. THE FARMER’S PLIGHT.

Farmers right throughout the country, ’ said Mr Revie, “ are in a state of anxiety and perplexity. In many cases we are without money, and do not know’ how we are going to tackle the new season. Our security of tenure is doubtful, and our equity has become negligible. The majority of us, who for the years following the war period found our industry a fairly remunerative one because wool, dairy produce, and meat values were exceptionally high, have reached the cross roads. Farm incomes have been cut to pieces through' the levelling of produce prices to normal, arid no longer is it possible for. us to pursue the easy path along -which some of Us have< made progress, with any prospect of attaining prosperity. How can , farmers be otherwise than badly, hit when their incomes are reduced to a pre-war level, and their costs remain fully 60 per cent, above those ruling in 1913-14? “ The position to-day is, as you all know, that farmers cannot meet their obligations. Many are unable to meet the ordinary costs of farming, and interest and rates and other charges are piling up into a mountain of debt that must ultimately engulf us. There is no getting away from the fact that a continuance of existing conditions will soon bring farming, and many associated industries, to a standstill. No dispassionate observer can dispute the fact that while farmers unquestionably made a lot of money in the boom years after the war, they have in-

curred heavy losses since that time which have ruined many of them. It has become increasingly apparent during the past 12 months that there is little to attract confidence and money to the land. An obscure gold mine in China or an oil well in Persia would command more capital to-day than any agriculture enterprise in this country.

We should have known that the fool’s paradise in which we'' have been living would come to an end some time. It country are-heavily in debt, and are onlj’ able to continue in occupation of their land in many cases as a result of the leniency of their creditors and mortgagees. The fact that the Bankruptcy Court has not been working overtime lately on agricultural insolvencies is one of the most surprising features of the existing crisis.” READJUSTMENT NECESSARY.

“We are not equipped,” he said. “to face our difficulties properly and effectively. lam not suggesting that farmers are any worse than anyone else. All clashes are in the same position. They have become so accustomed to good times that they do not seem able to appreciate the fact that things are not what they were, that we must all pull in our horns. The whole country must realise that we cannot expect to dispose of our problems and perplexities with some wave of a magic wand Only hard effort and a complete change of habits, methods, and ideas can bring about the readjustment of our industries to the new conditions that prevail as a result of the world-wide depression. Farmers, manufacturers, workers, and all classes of business people cannot be forever looking to the Government to do this and that. It is a time to tighten the belt and grin and bear adversity for the time being, knowing that we will eventually win out to a better state of affairs. “ We as farmers are worse off than most other people because we cannot get out costs down sufficiently or speedily enough Rigid economy, the simple thrifty life have passed by. Where the trader can write off present stocks an 3 immediately buy in at lower prices, and still sell at a profit on the lower ruling rates, the farmer must just buy where he can and sell where he can. The high costs of farming and of living are killing him. A s our losses pile up and our money disappears, and our debts accumulate, we begin to realise how needful are those anchors which rec nt years taught us to ignore. The final

tragedy has descended upon us. Farmins does not pay. ° COSTS MUST BE REDUCED.

No business can sell goods below the cost of porduction and continue to do so indefinitely,” continued the speaker. “No outside help can successfully or perassist industries run on such lines. Whether we like it or not, gentlemen. we have to admit that we have brought aj lot of our trouble upon ourselves. We have lost the old outlook, the sate, secure methods and the ability to retrench which were the anchors which held us fast in the old days of normal values and costs. Nor can we expect to get back to security until we get the old safeguards back. While we call loudly for economy and retrenchment in the Government and local authorities, and demand that our working costs should be reduced. we must not forget that all of us have sacrifices to make that may not be much to our liking, but which are absolutely necessary. When we cut our cloth to suit our measure we mav expect to begin to move to better times.

.In this I am not urging farmers only, it is a duty everyone in the country must discharge in his own sphere. If we continue to live complacently, indifferent to current conditions and where they are leading us, we will eventually reach the alarming pass that Australia has come to. Ot the various ways in which the farmer may be assisted to security and stability 1 would like to mention just a few. We are all forced to sell what we produce, and we must sell at just whatever price is offered to us, no matter bow low it might be. We buy in a dear market and seif in a cheap one. and the result is an uneconomic industry. The means of escape are obvious. Subsidies, protection, and the like can only act as temporary measures, and even • their success is jeopardised by the unbusinesslike situation in which the farmer is placed. Costs must be brought down.— (Applause.) We must be allowed to buy all our requirements m the cheapest market, and must have no needless burden laid on anything that comes _to us and -can assist us in the cultivation of our land.

We must be relieved of every unnecessary and unjust legislative restraint and imposition. (Applause.) I say every unnecessary restraint and imposition, because taxation is, unfortunately, a restraint upon us all, but we cannot say that it is always unnecessary or that it is always unjust. We do feel, however, that the continual increases in taxation at the present time arc too great. Local bodies are even worse offenders than

the Government, and there can be no doubt that farming would be greatly improved in this country if it were relieved to some extent of the enormous burden of taxation which is imposed by local bodies, many of which allow themselves to be coerced by non-ratepayers into providing expensive amenities for which the rate payer must pay. It is essential that every obstacle to cultivation to full capacityshould be removed at this time as a national necessity. Farmers must be relieved of the fear of dispossession, and some equitable arrangement is necessary to guarantee the producer against the absorption of al] the proceeds of his farm in satisfaction of his debts. It has to be recognised that a state of national emergency exists and that it is surpremely important to maintain production at the highest possible level. The urgency of the position makes useless to discuss anything that cannot be accomplished before the next season opens, and the alarming con ditions at the present time should have the effect of compelling politicians, farmers, business men, workers, and all concerned to rid themselves of the habit of shrinking from anything that lacks precedent. — (Applause.) RIGID ECONOMY ESSENTIAL.

The importance of farmers to the welfare of New Zealand as a debtor countryrequiring to export largely needed no >tiessing. said Mr Revie, and the greatest service the Government and the people generally could do this country was to recognise the farmer’s claim to economic justice by assisting him to free himself from the burden of artificially swollen costs. Costs of production were the keynote, and if world prices continued low, costs must be radically reduced. The firmer could do a lot himself if he would get back to the rigid economy and sane programme of other days, but he must be helped by every other section of the comJ f t V, e P os,tl °n was going to be righted tit all.

The nation as a whole must realise that the staggering and unprecedented expenditure, most of it unnecessary, of the past 15 years must cease,” he concluded How many people know that in the four years and a half of the war, Great Britain spent more money than was expended in the preceding two centuries and a-half. That sort of thing cannot continue forever, either in national or private life, and when we have learnt to do without it we will once more be on the road to real and stable prosperity. National co-opera-tion in an endeavour to adjust standards of living, expenditure, and method to the extraordinary conditions current at the present time is the only hope, not only of New Zealand, but of every country- in the world that is feeling the pinch. We must not lose sight of the fact that the trouble today is not so much that times are bad as that they are not as good as they were.”—(Applause.) Mr Sheat congratulated the chairman on his address and expressed to him the sincere thanks of the delegates.