BALCLUTHA: The assertion that the sheep farmers of New Zealand were today in a desperate plight was made by the Dominion president of the Farmers' Union (Mr W. W. Mulholland) when addressing the Farmers' Union conference at Balclutha yesterday.
Mr Mulholland said that, although he hated to make the suggestion, the only thing that could bring practical and instant relief to the sheep farmer was a raising of the exchange rate.
"If the sheep farmers are to live, something must be done about their position within the next few months," Mr Mulholland said, "otherwise their plight will be more acute than during the slump. I have never known the sheep farmers of New Zealand more pessimistic than they are today.
"Their position is pretty desperate and it is due partly to the fact that, during these recent good years, their costs were so high that they were unable to build up the reserves which should have been there to meet the recession in values that was bound to come.
"What can be done about it?" Mr Mulholland asked. "Quite a number of sheep farmers are talking about a guaranteed price, but I do not think that it would help them. A guaranteed price in the long run cannot pay out more than the value of the goods that are sold.
"Any arrangement that will only give the sheep farmer the overseas price of his product cannot help him, and he needs more money urgently, and a guaranteed price that would help him would cause a huge deficit at the Reserve Bank.
"The only alternative I can see is in a raising of the exchange rate. I hate to make that suggestion, yet we are facing a desperate position and something has to be done. I know very well that, from many points of view, it is unsound.
"I know especially that, if a raising of the exchange is not accompanied by a determined control of costs, we are well on the high road to eventual destruction, but it is the only thing that can give practical and instant relief to the sheep farmers today.
"Of course, there is the sound way of reducing costs," Mr Mulholland added. "That will entail cutting down Government expenditure and getting the unemployed back into productive employment, but that can only be done when conditions are sound and stable.
"While we have wild schemes and talk of inflation going on, there can be no confidence in the community and what the Government needs to do urgently today is to try to restore confidence among the people."
- March 16