Debt Repayment Queried

Press, Volume CIX, Issue 31967, 19 April 1969, Page 8

Debt Repayment Queried

It is well-known that jthere is a very strong relationship between the volume of farm investment and the size of the disposable income of farmers.

At this week's farm development seminar held by the North Canterbury Agricultural Advisory Committee a member of the staff of Lin-

coin College’s farm advisory service, Mr R. D. Plank, said that one reason why farmers did not have enough income to plough back into their enterprises was that they had debt repayments to make. He said that industrial organisations, on the other hand, did not repay their debt in that they expanded their capital structure. Mr Plank said that be wanted to suggest that if farmers were not required to make ’these repayments they would not need to borrow so much because they would have more money available for reinvestment. Without wishing to minimise the work of the Agricultural Production Council Professor J. D. Stewart, who presided at the seminar, said that the ebb and flow of farming's response to production targets was related to farmers disposable income. While it had been suggested that the State might step in to counter any slowing down in farm development, it was difficult in these circumstances for farmers to maintain debt servicing. so it would be desirable to look into forms of lending in a situation where a farmer’s debt servicing capacity was fairly narrow He did not think that they should be dogmatic that the financing of farming on he basis of amortised mortgages was necessarily the best way. .-4