More money for farming

Press, Volume CXV, Issue 33815, 11 April 1975, Page 6

More money for farming

Substantially increased funds are to be made available to the Rural Banking and Finance Corporation during the 1975-76 financial year for the refinancing of farm debt and for farm development loans, according to the Minister in charge of the corporation, Mr Movie.

Mr Moyle said he was concerned that farmers were experiencing considerable difficulty in arranging finance from stock firms and other financiers, particularly for development and to increase stock numbers.

He said that up to s3om would be available through the bank for development, and, as necessary, more than S2om for the refinancing of farm debts.

“This will enable the Rural Bank to carry out a major farm debt restructuring programme and thus relieve many normally creditworthy farmers of

the heavy burden of short term liabilities, which are hampering further development and maintenance of their properties,” he said. The trading banks had also been told that continued priority was to be

given to lending to the rural sector, and the Government would support the banks in this, where necessary. through the special arrangements made last year, Mr Moyle said.

According to stock and station industry sources the seasonal finance support scheme has been helpful in covering farmers’ deficits in the past season, but this has not improved the over-all liquidity of farmers or stock and' station firms as there was still some ssom to s6om of hard core debt that farmers had with firms.

The money that is to be made available in 1975-76 for restructuring of such debt is therefore seen as going some way to relieving that problem. And it is pointed out that it is in farmers • own interests to have such hard core debt put on a longer term basis at a more favourable interest rate,

It is understood that the loans made available through the Rural Bank will be fully interest bearing — at 7 per cent on first mortgage and 8 per cent on second mortgage — and will have to be repaid.

They will be made to creditworthy farmers and in all cases security will be required.

Commenting this week on the availability of these funds, the chairman of the North Canterbury Stock and Station Agents’ Association, Mr T. R. Harper, said that while Govern-

ment support measures an nounced in January, in

eluding the SI supplement for lamb, and also for wool, had been helpful, in the majority of cases there had been no change in the financial situation of their clients.

He believed it was most necessary that farmers should be looking at the money that would be available for restructuring farm debt.

There were a large number of farmers working on short term finance who should give serious thought to converting this to a long term loan. In this way stock and station firms would be better able to assist them with seasonal finance.

Mr Harper said that stock firms had been making quite a few of the applications to the bank on behalf of farmers for supplementary seasonal assistance, and they would be happy to advise farmers and also submit applications for restructuring or for development finance.

The bank, he said, had recently been looking favourably at also helping cropping farmers who had had a bad season because of climatic problems with their crops.

He commended farmers to take out a cash flow budget for the next. 12 months to see how revenue would compare with the rising cost of running their property. With minimum prices for lamb, wool and for beef, he said it was possible to calculate revenue more reliably now than it had been possible for a number of years. Where this disclosed that they might have some problems this would further underline the need for them to consider debt restructuring if they were in the position of having hard core debt.