A holding exercise

Press, Volume CXII, Issue 32879, 30 March 1972, Page 8

A holding exercise

“We believe that in our area the objective of maintaining productive capacity has been achieved. It has been particularly effective on the smaller or heavily indebted units,” said Mr D. K. Ower, senior field officer in the Lincoln College farm advisory service, in giving last week-end’s seminar on the sheep retention incentive scheme at the college some idea of how it is affecting farmers in the area where the Lincoln service mainly operates—between the Rakaia and Conway rivers.

“The scheme would, however, appear to have had no significant effect on the t level of confidence in the future because of its short term nature. “In my opinion there may have been an overreaction to it by politicians, the news media and others.” “I believe that in many instances the grant will only offset decreased returns from lamb compared with the previous season. It should, therefore, be considered as nothing more than part of normal farm income and as such does not warrant excessive publicity. “This is not the occasion to discuss long term measures to assist the sheep farming industry. The Government has indicated that a statement on longer term policy will be made in the near future and we await this with interest. “It would seem inevitable that the bottom 10 per cent or more of the country’s less successful farmers will have to continue to be eased out of farming. I say continue, because this process is already occurring slowly in our district. We are no doubt fortunate that buyers can still be found for these units. I understand that in certain parts of the North Island buyers cannot be found for hill country store sheep units. “It is my impression that in North Canterbury, and probably throughout New Zealand, a major problem is to overcome the difficulties of this tail-end of our fanning. “Overall we can expect a more stringent attitude to delevopment in the future —this being done out of income in most instances. “It is certain that, unless the rate of cost inflation is

arrested, there will continue to be difficult times ahead.” Mr Ower and two farm management consultants from the North Island and

Southland respectively, presented to the seminar results of case studies in their districts to indicate the effects of the sheep retention incentive scheme. Mr Ower presented four such studies, which he said were representative of different groups of farms in North Canterbury. The first case was of a hill country property of almost 3000 acres, producing prime lambs and carrying cattle, on which stock numbers have been appreciably increased in recent years. Here he said that the cash position would not have deteriorated between July 1 last year and June 30 this year had there been no sheep retention incentive grant. The grant will go largely into off-farm investment, and Mr Ower said that this was not an isolated instance, and the balance will be taken up by additional taxation. The next case was a 1200-acres light land, low rainfall property which had been severely affected by four successive drought seasons. Again this was a sheep and cattle property and in this case the cash position would have deteriorated between July 1 last year and June 30 this year but for the grant, of which about a fifth will go into additional debt repayment and the rest into “balancing the budget”. “Here the grant has really played an important part in keeping the situation viable,” Mr Ower commented. In a third case, also a 1200-acres property with

sheep and cattle and crop, Mr Ower said that the cash situation would not have deteriorated without the grant and the intention was to use about two thirds of the grant to wipe out the overdraft with the stock firm, with the balance going in extra taxation —“a little bit for the Treasury”. And finally Mr Ower referred to a 400-acres sheep and cropping property, which he described as a marginal type of unit. Here as a result of the farmer living very modestly, he said that the cash position would not have deteriorated over the year and two thirds of the grant would go into additional debt repayment and the balance into additional living expenses.