FARM AND STATION

Press, Volume CXI, Issue 32660, 16 July 1971, Page 12

FARM AND STATION

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ment and down towards 7 per cent post-tax, and allowing S.A.C. debt servicing there was a return on Mr Wanklyn’s contribution to the development programme of 19 per cent pretax. Mr Whatman put up for consideration a proposal under which the remaining 600 acres, which lend themselves readily to development, should be tackled m the next four years. This was not being put forward as what Mr wanklyn would do, he said. This would involve stock increases, fencing, water supply and extra labour and could also involve the buying or building of a house to accommodate an extra labour unit. He noted that if this was all done by cultivation, on past experience four to five ewe equivalents could be added to the acre, but as the Hurunui block now used for wintering would be encroached on in the development programme it would not be possible to winter these stock increases without buying in extra feed, and for such a programme involving buying in feed and increasing the stocking rate at about four ewe equivalents to the acre he said that about $68,000 in capital would be required, or the equivalent of about $2B per ewe equivalent. This would necessitate a loan of about $46,000. With ewe numbers increased to 4000 and the same prices ruling as today, Mr Whatman calculated that the cash surplus after running the farm would be increased by about $6300 to $17,205 and the return on development money would be 12 per cent pretax and 6.75 per cent posttax. “If someone put this up to me I would consider it too big looking to go ahead with and there to be too much risk Involved,” he said. He did not think that post-tax it left a big enough

surplus to go ahead with any confidence. While commending what had been done on the property, Mr Oldfield said he wondered whether they had quite all the facts at the start of development. At that stage there might have been some slack that could have been taken up on the property. This was quite important. The result had been a good one but it might not be quite so good as the figures might lead people to believe. A member of the panel, Mr H. J. King, divisional director (rural) of the State Advances Corporation, indicated that they would not consider a loan of $46,000 in one bite. “By and large we would be interested in going ahead with this type of programme but treading a little gingerly," he said. Mr King said that in the changed circumstances now in which fanners and everyone else were working “we tend to look not too far ahead.” There had been resources in this property—there had been slack to take up—and it had been this, which had made the programme profitable. “I think that in the tussock block with some fencing there is still some potential there without too much development. I would be happy to go along with that. . . .” Mr King also said he would like to see the introduction of some clover into the tussock block to improve fertility before starting cultivation. Answering a question on extra labour, Mr Oldfield said he would suggest that Mr Wanklyn should pick out the areas that were the easiest and cheapest to develop and it could be worthwhile concentrating on oversowing and fencing and perhaps doing 100 to IfiO acres over the next four or five years.

i He should not be forced into building a house—certainly not on the property. It might be possible to consider buying one in the neighbouring rural centre, but he would suggest that Mr Wanklyn should continue to employ a student for six months of the year.