THE RHODESIAN SCENE FARMING FACING A SECOND WINTER OF DISCONTENT?

Press, Volume CVI, Issue 31209, 5 November 1966, Page 14

THE RHODESIAN SCENE FARMING FACING A SECOND WINTER OF DISCONTENT?

<By the Salitburv correspondent of the "Financial Timet") (Reprinted from the "Financial Timet" bv arrangement) “Next year will be better”—a radio serial about farm life in Rhodesia is an accurate reflection of the farmers’ mood as Rhodesia’s second post-U.D.I. agricultural season gets under way. For many farmers next year must be better if they are to remain in business and the agricultural community is now anxiously awaiting the plans of the Agriculture Minister, Mr Huck Rudland, for increasing farm profitability.

At the end of last month, Mr Rudland promised proposals to improve the position in agriculture within six weeks. By and large, he said, it was agreed that the agricultural industry was “not what it should be.” While speaking to Rotarians in Salisbury last week, the President of the Rhodesia National Farmers’ Union, Mr Tim Mitchell, observed gloomily that farming was “in a bad way.” Farming costs, Mr Mitchell claimed, were rising to the extent that the average efficient farmer was getting a return of less than 3 per cent on his capital though he might get 4 or 5 per cent on selected lines.

Recent Awareness It is only in the last six months or so that the public has become aware of agriculture’s problems, though it is part of the ritual for farming spokesmen to remind their audiences that the decline in agricultural profitability has nothing whatsoever to do with U.D.I. or sanctions.

The prices of agricultural input items have been rising steadily over the years while the prices paid to farmers have, with few exceptions, steadily declined. The farmers’ solution to the problem has centred around the need for lower production costs. Farm spokesmen have urged the Government to impose price control on essential agricultural input items. Other farm spokesmen have called for increased prices for farm produce as well as Government subsidies to producers. The call for price control which has been heard loud and clear over the last two or three weeks has sparked a vigorous reaction from commerce. Agricultural machinery dealers have warned that price control in their ' industry would result in .a sharp decline in the standard and volume of services offered to farmers. The effect of U.D.I. on Rhodesia’s import prices was explained by the President of the Agricultural Dealers’ Association. There was very little that local dealers could do to improve the situation, he said, if suppliers abroad ■“have chosen to double or treble their charges.” Magic Phrase In the present “abnormal situation,” he explained, dealers are forced to pay higher costs in order to meet

the needs of the farming industry at all. He admitted too that most prices were higher than they had been at the beginning of the year. The farmers’ reply to this sort of argument is quite straightforward. They use the magic phrase used by Rhodesian Front politicians and Government spokesmen to counter any sort of criticism. It is “in the national interest” that commerce and industry should accept lower profits. Mr Rudland accepts the , need to attack rising farm costs. Two pillars of his expressed policy are to reduce costs through the bulk handling of maize and to produce fertiliser in Rhodesia and sell it to farmers for 40 per cent or so less than they are paying at present. Neither policy would give immediate assistance. It would take five or seven years to implement bulk handling for maize and would cost £7.5 million. A nitrogenous fertiliser factory has been under active investigation by Governments for six or seven years now and, in spite of many rumours about early announcements, a Government spokesman said this month that an announcement could not be expected for some time. Immediate assistance to agriculture is being given through the Graylin Committee. This committee, established originally to give Government financial aid to farmers hit by the drought, is now being progressively broadened to help all sections of the industry and not merely on a temporary or ad hoc basis. Debt “Freeze” So far, some 600 white farmers—about 10 per cent of the country’s 6000 registered farmers —have applied to Mr Graylin for assistance. About one-third of the applicants have been given aid at a cost of some £250,000 — only one-fifth of the £1.25 million voted to the Graylin Committee in the July budget. Plans are now afoot to give statutory backing to Mr Graylin’s work. The second draft of a Farmers’ Assistance Bill, which is likely to go before Parliament later this year or early next year, is being drawn up. One of its provisions would be to “freeze” farmers’ debts for a limited period and to provide a judicial management type of service to farmers while • they were being helped over ; their difficulties.

A longer-term form of Improvement is the mooted plan to consolidate the country's agricultural marketing boards into one organisation, as is done in Malawi. This is very much of a controversial issue but is believed to be favoured in some quarters on the ground that it would mean a reduction in marketing costs. Of the suggested measures, only the Graylin Committee with its interestfree loans, promises immediate relief, though, if adopted, the plan for price control would help the industry next year. The root problem continues to be the fact that export prices are simply not high enough. This is accentuated, of course, by the poor prices paid to tobacco growers because of sanctions and the loss of Commonwealth preference on sugar and of the benefits of membership of the Commonwealth Sugar agreement. Tobacco Sales The tobacco sales ended last month. With no figures published it is thought that the total income to growers had been in the region of £23 million—some £lO million less than last year. This would represent an average price per pound of only 24d or 25d against production costs of about 24d to 26d per pound and against last year's average price of almost 33d per pound. Mr Mitchell has described this year’s operations for tobacco growers as a no-profit, no-loss operation. But many growers will have suffered substantial losses all the same. Rhodesian tobacco exporters are angry too at the United States decision to increase subsidies in an effort to boost sales of stockpiled leaf. Rhodesian tobacco exporters : claim that the United States action is illegal in terms of i the G.A.T.T. agreements. Mr John Graylin, in his capacity ■ as head of Tobacco Export ' Promotion Council, believes ' it is a “striking coincidence” I that the latest United States ■ move of increasing the sub--1 sidy by 5 cents has been ' taken at a time when Rhode- , sia—because of U.D.l.—is ' unable to protest at G.A.T.T. i The sugar position Is exi tremely difficult and the couni try may be left holding more i than 100,000 tons of sugar at i the end of the year. Hippo ' Valley Estates, supposedly running also on a non-profit, ■ non-loss basis, Incurred a deficit of more than £370,000 in the last financial year. But the sugar position would have been extremely difficult without sanctions because of the depressed world price. Although Rhodesia’s beef Is reported to be selling well, cattle ranchers can only expect a return of about 5 per cent on their capital. Maize farmers are only making about £1 an acre profit, while the dairy producer is faced with a profit of only lid a gallon.

When he presents his proposals to help farmers, Mr Rudland is bound to fix his sights on lower costs. He may also have to announce increased prices in the domestic market—this policy has softened the blow so far as sugar is concerned. But there is no easy short-term remedy in sight, though the ending of U.D.I. and the removal of sanctions would do more to help the tobacco sector than anything else. For the tobacco grower, the outlook is far from promising. He is continually advised to diversify and there has been a move towards beef production; even so, this season there will be almost the same number of growers as last year, despite the poor prices Diversitfication into beef, cotton maize and so on—has become more of a politician’s catch-phrase than a practical reality because many farms are ideally suited to tobacco and little else. Also, substantial capital resources are needed to begin beef production.

Although for many farmers the last year has been difficult, there is no sign at all that they would barter political concessions for increased farming profitability. Suffering economic hardship is like fighting a “holy war”—the alternative is unthinkable. Many see hard times ahead, but these are preferable to “surrender” to Mr Wilson. They believe that provided there is no drought this year “next year will be better.