VALUE OF SOVEREIGN.

Taranaki Daily News, 5 August 1920, Page 9

VALUE OF SOVEREIGN.

HOW THE FARMER IS HIT. MAKING PRODUCTION OF WHEAT PAY DEPRECIATION. There are those who, discussing the unusual financial conditions in the Dominion, maintain that the farmer is not affected by the depreciated value of the sovereign. The president of the Farmers' Union (Sir James Wilson), however, thinks otherwise, and declares that he is perhaps more affected than any. Discussing the wheat question in his annual report, read to the conference of the New Zealand Farmers' Union, Sir James said that the public demanded that the farmer should grow wheat at a fixed price. No account was taken of the decreased 'purchasing power of the sovereign. When the Board of Agriculture told the Board of Trade that wheat could not be grown at less than 6s 3d the idea was scouted. While the wheat was growing the sovereign was decreasing in value. ■ When the farmers were appealed to by the Premier to grow more wheat, from patriotic purposes, and an increased area of 100,000 acres was put in, it ended disastrously to the growers, for the season was a bad one, and the yield fell to 21J bushels per acre—the lowest on record. The price they got had to be discounted by about one-fifth, because the sovereign had fallen to 16s Id, and labor had risen. ■ LOSS ON GROWTH. Tho following year, after the losses the farmers had sustained, the area fell to 217,743 acres, and the yield was only a little better, namely, 23.19 bushels, and resulted in our having to purchase wheat outside *he Dominion. Again there was a loss on the growth of this cereal. On a further appeal to put more wheat in, and the promise of a better price, the area rose the following year to 280,076; but still the yield was only a shade better, namely, 24% bushels. Even then the price paid was really no more than in pre-war times, for the purchasing power of the sovereign had fallen another Is 3d. During those three years the farmer who grew wheat must have lost very heavily, so much that, when the Government haggled over the price and it came to be fixed, farmers again reduced the area, and only 208,030 acres were put in in 1918-19; but for the first time the yield was satisfactory, and rose to 314 bushels. But again the sovereign had fallen to 13s 6d, so that the price the farmers received was only equal to 4s at pre-war rates. Last season the price was a little better, but in March of .this year the purchasing [power of the sovereign had still further fallen. If, therefore, the Statistician made the comparison of the price of wheat during these various years, he felt sure that the farmer was getting no more for his wheat than in pre-war times, and during much of tie time the prices paid had returned him less than before the war. The Minister had at last realised the position, and instead of fixing prices he had guaranteed a minimum. This should have been done at the first, and there would have been much more wheat grown.

The price guaranteed for the 1920-21 season, which hadJheen agreed to, was 7s 3d for Tuscan, 7e 6d for Hunters, and 7s 9d for Pearl, reckoned as f.o.b. This is not fixing prices, for market rates were governed by the world prices, and what, wheat could be delivered at the port from an outside market. Yet even at 7s 6d, when the value of the sovereign was taken at, say, one-third less thafy pre-war value, the price guaranteed was only 5s a bushel. DAIRY PRODUCE.

It was the same with 'dairy produce. The dairy farmer before the war got 6y 2 d, and in some cases 7d for his cheese. Last year he got lOjd, which was very little more than 7d when discounted by the present value' of the sovereign. Butter ju3t the same, Is 7|d was paid by the Imperial Government for our output., From that was deducted 12s a cwt to enable the Dominion consumer to get his butter 2d a lb cheaper. Last season, this -was paid out of the Consolidated Fund, as was proper, but the season before, this was not done; so that the consumer still owed the dairy farmer for .this. But leaving that out of the question: How did the present price compare with pre-war rates? "I looked up the account of our dairy company," concluded Sir James, "and find, for the 1913-14 season, we received 12Jd per lb from ,an agent. This year we were paid Is 7Jd; the expenses to Wellington were increased by 20 per cent. With the British Government pur, chase we have to pay two months' storagev cartage to the vessel, wharfage, and insurance—equal to about .|d a lb, so that for last season's butter the farmer netted Is 5Jd. If you compare that with sales before the war, and deduct, say, one-third for the decreased purchasing power of the sovereign, the dairy farmer is getting less for his butter now than J before the war."