The farmers’ share

Press, Volume CXI, Issue 32630, 11 June 1971, Page 8

The farmers’ share

Few farmers should be surprised and not too many should be disappointed by the Government’s firm rejection of across-the-board subsidies based on changes in costs and produce prices. For, as Mr Muldoon said last evening, such a plan would have helped many farmers who did not need help; and he might have added that it would have increased the inflationary pressures it was designed to relieve. Mr Muldoon’s selective approach to further assistance for farmers is much more acceptable. All the subsidies proposed or increased in the Budget for fertiliser, for its transport, for lime, aerial topdressing, and animal drenches are directly related to increasing production.

Mr Muldoon wisely prefers to make only short-term decisions on farming until the results of Britain’s approach to the European Economic Community are known. He said that Government assistance was designed to help farmers overcome current problems without isolating them from market influences. It would be especially unwise to try to insulate farmers from market forces .that have yet to be generated and the exact nature of which cannot be foreseen but which, nevertheless, might be profoundly important in moulding the structure of New Zealand farming. Increasing the flow of finance into the farm sector of the economy is a different matter, and one of immediate concern. Augmented funds for direct State lending will obviously be welcome and useful; the value of the mortgage guarantee scheme can be tested only in practice. When loan money is scarce it is certainly the Government’s responsibility to do what it can to channel finance to the essential parts of the economy. Without interfering basically with the freedom of the loan market, the guarantee scheme should revive private lenders’ confidence in the farming industry and enable farmers to compete for funds on a more even footing with others seeking finance. This might not assure the industry of all the support it needs; and the proposed inquiry into farm lending is an acknowledgement by Mr Muldoon that he has not found all the answers to the farmers’ problems. 'V