THE FARMER.

Press, Volume LXVI, Issue 20103, 5 December 1930, Page 16

THE FARMER.

PRESENT DIFFICULTIES SERIOUS POSITION DISCLOSED. CASES OF HARDSHIP. In order to obtain some exact information as to the difficulties of the farmer in Canterbury, consequent upon the fall in prices of primary produce, a reporter yesterday sought and obtained details of a number of specific cases, said to "bo typical of many. He was informed that many farmers, -who considered themselves safe a few years ago, ! now found themselves unable to pay interest, even unable to pay taxes, while come were finding difficulty in obtaining ready money for modest household expenses. The General Position. Mr Norton. Francis, ex-president of the Canterbury Chamber of Commerce, summed up what appeared to him to bo the general position, and pointed to 'possible remedy. Prices now ruling for farmers' produce were, ho said, not much below those of the pre-war years, 1000 1013. "What wool was going to bring this year it was difficult to say, .'but the price would be very low. Butter was much lower than last year; so was cheese, besides which, the New Zealand product was unpopular in England just now, because the standardised cheese had helped to pull down tho price of tho full-cream product. Lamb was expected to fall in. price, while ewe and wether mutton were already showing a sharp decline on last season's quotations. Against this the farmer's costs of production were over sixty per cent. | greater than in the pre-war years. Thus tthe return that he had coming in was 'not much, less than during those years, [while his outgoings were sixty per cent, igreater. This was the unenviable position in which he found himself. Even 'in the prosperous times there were no liarmerß making fortunes, so what was 'their position to-day ¥ It needed little imagination to realise that they were ,in a very bad way. Conference Suggested. This being so, what was tho remedy 1 ? personally, favoured a conference trl all Parties—not forgetting Labour — tfts Buggested by Mr Coates. They should go there, not prejudging the situation, "but with an open mind to discuss the position from every angle. A dispassionate survey would probably show that there was an urgent call for sacrifice, but this- sacrifice must be evenly spread over all sections of the community. This apparently meant a lowering of wages. Against this, added Mr Francis, the workers would complain and it was very necessary that their "complaints should be heeded. It seemed to him that, in tho present depression, Capital had already made its sacrifice, so that it resolved itself into a question of who should come next. The plight of the farmers was obvious; mortgagees were in a very unsafe position, because they had lent without being certain of a return; it was no use shouting against the banks because tho high interest rates which they were charging were forced upon them, choking their business rather than stimulating it. These rates were governed by those which the Government and local bodies offered for their debentures. When these rose to five per- cent, and more what could the banks do? He believed that, in a time of depression, the Government should reduce borrowing to a minimum and, if it had to borrow, should go outside the country for the money, instead of using ■up that within the country, which was accessary in order to carry on. Then jthere were stocks and shares, which in many cases, had dropped to half their ■.former value. "Were these not indications of sacrifice by Capital? Beginning at the Top. To the worker he would say that he, with others who held responsible (positions in the City, was all for an equality of sacrifice; that was to say, f.t wages were to be cut, let the cut Jjegin right at the top and go down. He believed that the heads of most [businesses held quite sincerely to this (opinion. An adjustment of wages, continued Mr Francis, c-ould not be made all at once, for this would certainly entail hardship on wage-earners with dependents. If and when the reduction came, provision . should be made for this section of the community who would temporarily be adversely effected by the decrease. The position would also be materially aided if every worker did his utmost to increase hi» output. Consequent on u

fall in wages the worker might expect his pound, which was now worth only about 12s Bd, to increase in value to at least 15s, so that, in the long run, he would be little worse off. Specific Cases of Hardship. The specific instances of hardship quoted are tlioso of farmers in Canterbury, particulars of which have been made available from the files of reputable firms. The first is that of a farmer holding 800 acres, which he bought in 1919 at £27 per acre. It is a mixed farm, and he paid £9OOO in cash. For eleven years he had worked it diligently, but, to-day, he could not sell his 1.-ind at all. though he believed it to bo worth £l6 an acre. The second mortgagee had forgiven him his interest for the past half-year, and had agreed to forgo that for a year to come. The stock on the farm was, today, worth less than half what it was a year ago. The farmer and his family were living on milk, eggs, and his fowls, with some ewe mutton. All he was drawing was £1 a month to pay his baker's bill. He had been compelled to take his boy from school so that' he would now lose his chance of matriculating. Sheepfarmers in Trouble. A second typical example w;is~that~of a sheepfarmer who also held 800 acres. For the previous three years he had just been breaking even on his farming operations; last year ho lost £SOO. He was unable to go on because he saw that' he would make a similar loss this year. Hip stock and station firm was unable to make further advances because the value of the security had dropped, and there would be a clearing sale on his farm early in January. Another case concerned a big runholder who had 4000 sheep. When" he bought in there was only a first mortgage on the property, and a big equity was supposed to exist. To-day no one would advance money against that equity because the land was of no value and, in reality, the equity had disappeared. Last year he had lost £I6OO and had been asked to pay £236 in land tax. He had written to tho Commissionir s . seeking to be relieved of tins obligation. During the present year 6 flJn with misgiving, a loss of a. auu, and if prices did not improve he would lose everything. Unable to Pay Interest. A solicitor told of a farmer who had a property valued at £28,000, half of which was on first mortgage and another £6OOO or £7OOO on second. The farmer was unable to find a threepenny bit to pay the interest on the first mortgage until the wool return canie in, and this

would probably not be nearly sufficient. In the meantime ho had to live and strain every nerve to find enough to pay interest on his overdraft from a mercantile firm. He was a splendid farmer, his misfortune being entirely due to the fall in the prices of the primary products of this country. Another solicitor administered an estate of which the book value of tho assets was £30,000. There was interest to pay, land tax to pay, and in spite of the property having been excellently farmed, they would face the .year with a dead loss of £.600. Mention was also made of a big Canterbury farmer who, five years ago, could have written a cheque for £SOOO without in the least embarrassing his bank account. To-day ho could not find the money to pay interest on his mortgages. Illustrating the serious decrease in the price of live stock, a reporter was told of a Marlborough farmer who brought a line of sheep to Addington, which were sold from 3s to 6s per head. Transport from Blenheim had cost him 2s 3d per head, so what was his net return? His case was typical of many. Good Men May Go Out. The manager of a leading stock firm explained that, serious as had been the farmer's position for some time past, falling prices had considerably accentuated it during the past six months. He had been hovering on the edge of an abyss for some time; now he had been pushed over. There were very many cases where stock firms were considering whether it was possible for them to carry farmers on after January. Thus it' was probable that a number of good men, whose liquid assets had evaporated during the past twelve months to such an extent that they had nothing to borrow on, would go out. A man who, a year ago, had borrowed up to 60 per cent, of the value of his stock and chattels was able to go no further because he had no margin left on which to borrow. Solution Wot Easy. It was certain that many were facing a year in which their outgoings were much in excess of their income. How were they going to bridge the deficit? Their income showed no signs of increasing, so the only possible way out was to cut down expenses. It was folly to ask a man to pay land tax, and wicked to force it on to the mortgagee if the mortgagor were unable to pay. There were certain charges, such as land tax, local rates, and interest, which were inflexible. During the last' three years most farmers had cut their labour bill to the .bone. Food was a little cheaper, clothing was a little cheaper, but both were very dear when com-

pared with t'ho price tho farmer received for his own products.

The position was painfully apparent, but tho solution was not so easy. Summed up, it meant that the farmer last year had lost ten millions. If lie lost fifteen millions this year the only way was to find fifteen millions to balance tho budget. How was that to be done?