SERIOUS POSITION OF SHEEP FARMERS

Wanganui Chronicle, Volume 83, Issue 49, 28 February 1939, Page 12

SERIOUS POSITION OF SHEEP FARMERS

REVENUE DOWN MUCH LAND_ABANDONED UNION’S LETTER TO PRIME , MINISTER “Since the deputation waited upon you on January 18 in regard to the serious position of the sheepfarming industry, the situation has . become progressively more serious,” states the president of the New Zealand Farmers’ Union,, Mr. W. W. Mulholland, in a letter to the Prime Minister (Rt. Hon. M. J. Savage). “As the year’s returns are being made up by farmers, it is evident that all over New Zealand revenue from sheep farms will not be sufficient to meet all the committments. In some parts of the Dominion those firms financing the farmer cannot pay local body rates, or interest, or rent to the Government as the individual accounts will not permit. The high costs of farming to-day on efficiently-man-aged sheep farms cannot be met out of the comparatively low revenue. “Second and third class land is rapidly going out of production and on all types of land, including the very best in New Zealand, finance is not available for maintaining the fertility of the land. This will certainly result in a definite drop in production. Large Areas Being Abandoned “The position in New Zealand today is more serious even than it was in 1931-32. The high farming costs are the real reason for the inability of the farmer to employ labour. The farmers simply cannot pay competitive rates for labour. Every farmer would like to be able to employ the maximum number of men, and at the highest possible wage. “But as the amount of revenue received from the sale of produce is limited, and as the first call is made on that revenue for Government and local body taxation, and then interest and rent, obviously the farmer has to restrict expenditure on the verynecessary maintenance of the farm and on farm labour. The lack of ability to spend money on farm labour and on essentials such as lime and superphosphates must steadily result in a drop in farm production. Threat to Standard of Living “A drop in farm production means a real drop in the national wealth. As the national wealth drops, so must the New Zealand standard of living. Our most urgent New Zealand national problem is to increase production. The plain fact is that if the farmer does not receive some substantial relief from the costs he now has to bear then the volume of production will steadily decrease. Taxation Forcing Further Land Out of Production “The problem of land deterioration, which is in some measure known to the Government, is much accentuated by the present position. This executive is aware of further areas of high country and back country which the owners are being forced to abandon and which will go completely out of production in the course of the next few months. Much of this land is burdened with heavy local body taxation, which progressively increases as further areas are abandoned. It is the opinion of members of our executive that very considerable areas—running into millions of acres—of grazing land will meet a similar fate unless some substantial relief is afforded. “Estates which it is uneconomical to cut up further, and which are producing at a loss, are still subject to land tax, which in many cases is paid out of capital. It is a matter of physical impossibility for these areas to pay these taxes and show a profit. Land tax upon already desperately overburdened farmers seems to us a tragic mistake which is hastening the decay of the sheep farming industry.

Hospital Rates a Heavy Burden “To-day, with national traffic carried on many of our byroads as well as our highways, local body rates are everywhere increasing, in spite of the removal of highways from local body control. We would point out as in the case of the railways the maintenance of such roads should be the financial responsibility of the State. Hospital rates are part of this rating burden and are also rapidly increasing until the share born by the rural population is out of proportion to that carried by the urban areas. Growing Feeling of Hopelessness “The farmer is naturally an optimist, but to-day there is a growing feeling of hopelessness. Up till now it has been possible to export all our produce at some price. But with restrictions on our exports of mutton and lamb the situation is increasingly difficult. The drop in the prices of ewes affects all classes of sheep, and all types of sheep farmers. Drop in Wool and Lamb Prices “The drop in the price of produce from sheep farms during the past three years may be illustrated from the following examples:—■

December Christchurch wool sales— Per bale Per lb 1937-38 1938-39 1937-38 1938-39 £l6/6/2 £l3/7/- 12.502 d 10.087 d I “A further indication can be given by the average wool price for New Zealand up to December 31 for the last three seasons:— 1936- 15.75 d 1937- ll.lSd 1938- 9.93 d “The drop in lamb and ewe prices can best be demonstrated by the schedule for the Wellington Province as follows: January Lamb and Ewe Prices in Manawatu, Wairarapa & Rangitikei

Investigation And Action Called For At a fully attended meeting of the Dominion Executive of the New Zealand Farmers’ Union held in Wellington to-day, after hearing reports of actual cases of hardship from all over New Zealand, it was resolved to bring the following resolutions before you. As you are fully engaged with other duties, and it is not possible for you to grant us an interview before our members return to their homes all over New Zealand, we desire to bring specifically before you the three following resolutions unanimously adopted by my Dominion Executive : “(1) Royal Commission asked for: That the case of the sheep farmer is so pressing that the Government be asked to treat as urgent its undertaking to have an enquiry by a Royal Commission into the industry. “(2) Effect of taxation and local body rates: Unless reduction is made in charges on the land such as land tax and local body rates, there will be a rapid increase in land deterioration and a large reduction in the number of those employed on the land, this resulting in a real reduction in primary production. A real drop in primary production will inevitably result in a lower standard of living for the whole of the community. “(3) No effective protection for producers: We desire to point out that mortgagors who cannot meet their commitments to-day have no protection, and the uncertainty of ' the position is causing a feeling I of discouragement, as they feel it hopeless to keep their farms in effective production.”

January Wellington wool sales— 1937 1938 1939 Bales sold 30,699 24,709 26,604 Av. bale £24/6/ £16/7/5 £14/15/9 Av. lb 16.313d • 10.8d 9.642d

1937 Lambs up to 361b 8-1 Ewk 1938 ,72 32 1939 71 24