FARMERS’ PLIGHT

Waikato Times, Volume 122, Issue 20494, 10 May 1938, Page 8

FARMERS’ PLIGHT

ALLEGED GUARANTEE “HOODWINKED AND HAMSTRUNG” NO LEGAL CLAIM TO SURPLUS (By Telegraph. —press Association) WELLINGTON, Tuesday ‘‘Contrary to the Prime Minister's assertions the guaranteed price brought neither security nor stability to the dairying industry, and the guaranteed price does not mean a more substantial income to the dairy farmer,” stated the Leader of the Opposition, the Hon. A. Hamilton, in his address at St. Francis’ Hall last evening “The Prime Minister says the farmers of New Zealand are in a better position to-day than they have ever been previously in the history of the country,” said Mr Hamilton. “It is obvious that Mr Savage has not spent much time in the country districts during the last 2i years. The farmers have been hoodwinked and hamstrung by this Government, and they do not hesitate to say so.” The dairy farmers had their socalled guaranteed price. The price was fixed for a season in advance, but had any attempt been made to Cx costs? The farmers knew the answer. They knew that, since 1935, their costs of production had risen out <A all recognition, and they knew, too, that whereas good prices had been made possible only by market conditions overseas, increased costs had been brought about as a direct result of the Government's policy. The farmer could not hope to pay competitive rates in wages, and he was in a less hopeful position to-day than he was three years ago, when rising markets with much lower costs, were permitting him to make a speedy recovery.

Farmers supplying cheese factories last season got £12,000 less for their cheese than the Government got for it in London. And they had to bear as an addition all the extra costs loaded on to the industry, and the higher prices for their requirements. Less Than Market Price Last year, those supplying butter factories got about an extra id per lb over London price. Under no stretch of Imagination, would this be anything like sufficient to meet the added costs loaded on the butter producers, and the Prime Minister had the audacity to say that the guaranteed price meant a more substantial income l There was still a debit of £338,000 standing against the Dairy Account. Referring to the present season Mr Hamilton said: “It is correct to say that the dairy farmers under this year’s guaranteed price are receiving substantially less than the market price of their butter. A reasonable estimate of the market price above the guaranteed price would be about lid per lb butterfat or, an estimated surplus for this year of over £1,850,000, for butter exported. That is what the Prime Minister calls security and stability. Note that he did not use the word ‘justice’ as applied to the guaranteed price. Note, also, that the dairy farmers have no legal claim to the surplus. They are in the hands of the Minister, and at his mercy. No doubt, as this is election year, the Government will make a further payment later on, but the farmers have no legal claim to a penny of it. “Further, the butter on the local market is being sold at a loss to the dairy farmers of about lid per lb butterfat, and that amount can never be recovered. This local market loss to the farmers supplying butter factories, will amount over the whole year, to about another £400,000. It fs reasonable to estimate that dairy farmers supplying butter factories — unless a bonus is paid above the guaranteed price—-will be getting about £2,250,000 less than the market price for their, butter. Compensated Price

“It Is this ridiculous position under the Labour Government’s policy that has stirred farmers to demand ‘compensated prices.’ The principle underlying compensated prices is that farmers, who have to sell their products against the competition of the world, claim a comparative reward for their labour and capital with the rest of the community. It means that internal costs should not be allowed to rise any higher than a Just comparison with export prices. If costs are pushed up higher than export prices warrant, then the farmers want consideration. “A good example of the principle Is seen from the increased costs loaded on the manufacturing industries by the Government. Costs were pushed so high, by increased wages and shorter hours, that there was no chance of competing against imported goods. They sought, and received, compensation through increased tariff. . “This is perhaps the most serious political problem facing New Zealand,” Mr Hamilton added- “It should not be difficult to see how the farmers, who have to sell against the competition of the world, might easily be forced to accept a lower standard of reward than other sections. Compensated prices means keeping the right balance between export prices and internal costs.

“To put it another way, it means giving attention to farmer’s costs as well as to the price of his product. It means further, that standards of rewards for other sections of the community should not be allowed to rise out of comparison with farmers’ standards.” .