Prospects for farm exports ‘favourable’

Press, Volume CXI, Issue 32587, 22 April 1971, Page 1

Prospects for farm exports ‘favourable’

(From Our Own Reporter)

WELLINGTON, April 21.

Prospects for most of New Zealand’s agricultural exports in the season ahead appeared favourable, but there was a need to stimulate confidence in the farming sector by applying positive measures of assistance for production.

This conclusion was reached by the Agricultural Production Council at its meeting today after an examination of its economic working party’s report The council has submitted the? working party’s report to the Government.

The council affirmed its confidence in the inherent strength of the fanning industry as a whole, which, &a reasonable oppor- , had the ability to modify and adjust production and come to terms with its changing situation. The council noted that the working party reported on recent declines in net farm incomes; but the council emphasised that Improved market conditions for dairy produce in recent months and a good outlook for meat indicated an improvement in incomes for the next financial year. However, this might not apply to farmers who relied predominantly on wool production.

The council said that the working party’s report drew attention to the present weaknesses in farming and to the declining level of expenditure on farm maintenance and development. The working party’s report says that the industry has lost the momentum which was a characteristic of the 19605. The types of assistance

considered by the working party ' range from subsidies, financial servicing, product research and marketing, to taxation : incentives and concessions. These general approaches were examined by the working party and related to a number of proposals made by various groups and individuals. The proposals include Federated Farmers costadjustment scheme, a proposition from the Wool Board, and recommendations from the council’s farm finance sub-committee.

The working party’s report ; said that the rate of increase in livestock numbers had de- ' dined. Total output for . 1970-71 would be similar to . that of the previous season, , and slightly less than 1 per cent lower than the tecord , level of 1968-69. , Since the 1968-69 season, , meat . production, especially I beef, .had expanded. Howi ever, wool output had re- , mained fairly static and there ! had been a decline in dairy production, grains and field i crops, and horticultural proI ducts. A proportion of this decline had been the result of I unfavourable dimatic conditions. , Nevertheless, the report said, seasonal conditions had not been solely responsible ’ for the loss of momentum in . the industry. , A low level of farm profit- ' ability had resulted from t sharply rising internal costs t which had not been offset by the same increases in prices 1 received by farmers. Offfarm costs had also risen con- ! siderably.

The reports said that the low level of profitability affected the fanners’ ability to service a rising level of debt. The burden of principal repayment became a major problem under these circumstances.

Dealing with investment, the working party’s report said that recent statistics of capital investment in agriculture were not available. But on the evidence available, investment had been declining over the last two years. In its consideration of the report, the council discussed the future prospects for agricultural products—an aspect not dealt with in the document.

Council members noted that the butter price in London was the best for six years, and the marketing outlook generally was “very cheerful.” The London price for cheese was 20 per cent higher than a year ago, and casein and milk powder prices were at record levels. The council said that these developments would help to build up confidence in dairy farmers after two adverse seasons. Present overseas realisations and the prospects for meats remained good.