FREE EXCHANGE

Wairarapa Times-Age, 10 May 1939, Page 6

FREE EXCHANGE

ADVOCATED BY OTAGO FARMERS PLIGHT OF HIGH COUNTRY PRODUCERS. HIGH COSTS CAUSING THE TROUBLE. (By Telegraph—Press Association.) DUNEDIN, May 9. The serious plight of sheep-farmers of New Zealand and the steady trend of all branches of primary production in the direction of insolvency as a result of the steadily rising tide of production costs, was emphasised at a meeting of the Otago Provincial Council of the New Zealand Farmers’ Union, when a resolution, similar to that adopted at Oamaru a few days ago, was carried unanimously.

The urgent necessity of a full inquiry into primary production in the Dominion and the desirability of free exchange, were strongly advocated as the most effective means of meeting the present situation 1 . \

The resolution read as follows: — “That this meeting of the Otago Provincial Council of the Farmers’ Union endorses the report of the Primary and Ancillary Producers' Association and urges that representations be made to the Government, pointing out the necessity of action being taken on lines recommended, which, put briefly, involve allowing the exchange rate to swing free.” Mr R. S. Thompson said it was essential that definite representations should be made to the Government. He thought the Dominion executive ha.d been on the right lines in asking for a commission of inquiry.

“Farmers today are in a worse plight than at any stage during, the recent depression,” he said. “The reason of that is before the previous slump, most of us had reserves on which we could fall back. Today we have none, and I think that every effort should be made to have the full facts made public. At present the exchange is pegged, and, as I see it, farmers should do everything to have it freed. As long as it is not free we are being deprived of our rightful profits.” v The speaker said he was convinced that, if the exchange were allowed to swing free, it would go to 150 per cent, which would mean a 20 per cent, increase in the farmers’ income— an increase to which farmers were entitled. That was the only sure means of immediate relief, arid the Farmers’ Union must push for it. Mr A. C. Cameron said that the mxed farmer was not yet in a critical position; on the other hand, the highcountry farmer and the runholder whose eggs were all iri the one basket were faced by an alarming situation. They had to reply entirely on wool arid surplus sheep, and neither returned him his’costs. “The point I wish to make, however, is that it is costs and not low prices that are causing all the trouble,” Mr Cameron said. “Actually the average prices for wool and surplus sheep for the last five years are higher than the rates ruling during the pre-war period, and it looks as if farmers are making more than they did before 1914. That is not so. “Overhead costs which totalled £6OO in 1914 had risen to £lOOO 10 years ago, and are £2OOO to day. That is why I say that it is the high costs the farmer has to face which are pulling him down faster than the reduced prices he is receiving for his produce.” Mr Cameron quoted figures relative to six runs in Otago over the last seven years. At the beginning of the period mentioned wages and running costs amounted to 3s 9d a sheep; today they were 9s a sheep. Rates and direct taxation seven years ago averaged out at Is 4d a sheep, whereas today they were 2s 9d a sheep. Costs were increasing all the time, and there appeared to be no immediate prospect of a trend in the opposite direction., The resolution was adopted unanimously.