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War Economy

Changes in Farming

Changes in Farming

For the farmers, crisis had followed crisis in the 1930s. No sooner were they free of depression conditions than there was a threat to the continuance of the free market for their products in the United Kingdom. It was only after very strong protests from New Zealand farmers that the United Kingdom Government in 1934 abandoned a proposal for an import quota on butter and cheese, and instead decided to subsidise United Kingdom milk production. Imports of meat were not so lucky. A compromise system of short-term quotas operated from 1935 until it was superseded by wartime bulk purchase arrangements.1

Meanwhile the economic depression had had its influence on many facets of Labour Party policy. It was the income-reducing effect of overseas price falls, perhaps more than their effect on overseas funds, which had enabled the world depression of the early 1930s to communicate itself so fully and disastrously to New Zealand. The Labour Party pledged itself to protect farmers against instability in their incomes.

As part of its policy of insulation, it offered the farmers a guaranteed price for their products which would make them, in the short run, independent of price fluctuations in overseas markets. As it turned out, producers of meat and wool preferred to be without the guaranteed price, and the system applied only to dairy products.

The guaranteed price for dairy products, introduced in August 1936, very quickly came under pressure when, in 1937–38, rising overseas prices led to a surplus in the account and the farmers promptly demanded a higher payout. They got it.

1 New Zealand's allocations under the short-term quota system were not unduly restrictive.

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In the following year prices fell and the guaranteed price protected dairy farmers against the fall, so to some extent insulating the internal economy. But this insulation did nothing to protect New Zealand's overseas reserves; in fact it may well have been one of many influences leading to continued high importing and to an exchange crisis towards the end of 1938.

Meantime a more lasting change had been taking place in farming—a change which was to have a material influence on its manpower requirements under war conditions. The industry was being very rapidly mechanised and, stimulated by research work by the Department of Agriculture and the Department of Scientific and Industrial Research, very considerable improvements in methods were being made.

Between 1936 and 1939 the number of agricultural tractors increased by 69 per cent, and in 1940 there were almost twice as many tractors in use as in 1936. This was an amazing transition in only a four-year period. The number of electric motors on farms increased by 60 per cent between 1936 and 1940. Milking machines had been in quite widespread use by 1930, and after 1933 their numbers increased some 770 a year until there were nearly 29,000 by 1939. But, more important, hand stripping, which had always been regarded as an integral part of machine milking, was being eliminated on some farms. The Dairy Board reported:1

‘In November and December, 1941, a survey was made of approximately thirty herds where no hand stripping had been carried out for one or more years…. The production data indicated very little, if any, fall in output per cow as a result of no hand stripping, whether analysed on the basis of the same cows before and after the introduction of non-stripping or on a herd basis.’

Because of these changes, farming, which had in earlier years steadily increased its labour force, was now able to maintain ever-increasing production with a comparatively stable labour force. The change in rate of growth of labour requirements for farming was apparently not widely recognised until after the war and this misunderstanding was to have a major effect on wartime manpower planning.

Chart 4 shows changes in farm mechanisation between 1929 and 1940.

1 Annual Report of New Zealand Dairy Board for year ended July 1944, p. 49.

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chart of farm statistics

Chart 4