Buffer accounts ‘best for farm incomes’

Press, Volume CXV, Issue 33912, 4 August 1975, Page 12

Buffer accounts ‘best for farm incomes’

The best way to stabilise farm incomes was to set up buffer accounts backed by Reserve Bank credit, said the Undersecretary of Agriculture (Mr Barclay) at Timaru on Saturday.

This virtually meant that when realisations fell below an agreed level, the nation as a whole stood behind the industry to ensure that the payout to farmers did not fall behind that level, he told a rural carriers’ seminar. There were only two ways in which this could be done — through the Reserve Bank or through the taxpayer out of the Consolidated Fund, said Mr Barclay. If the money came from the taxpayer it would be clearly seen as a subsidy and would earn the disapproval of New Zealand’s trading partners. It was likely countervailing duties would be imposed by some of the country’s most valuable markets. Mr Barclay was referring [to some basic farm income I stabilisation principles on

; which he believed agreement . should be sought. j Farming leaders and 1 spokesmen seemed to be 1 concentrating their attention ! on costs, which they claimed : the Government was doing tothing about, said Mr Bar- . Jay. They conveniently for- • got that the greatest single I tost for many farmers — fertiliser — had been reduced in spite of the fact that the . actual cost had been doubled, [ almost entirely by external ' factors. The average farmer was : paying $26.60 a tonne for superphosphate on the ground, the same as he was paying in June last year. The 1 ex-works price of super had ; risen from $26.10 a tonne to I $50.80 in the year. 1 The Government had also ! waived the meat inspection ■ fee. a Government charge ! which was formerly recov- ■ ered from the farmer. It had extended lending ; through the Rural Bank for : development and seasonal i finance at lower interest

rates than were available anywhere else, and some of this finance had been interestfree. All of these measures were cost reducing, said Mr Barclay. But < transport and processing costs had continued to increase. This pointed to considerable inefficiencies and wasteful practices which must be reduced or eliminated if farming was to remain competitive on world markets. The Government was, therefore, examining in detail the whole structure of the transport industry, including, road, rail and shipping. This was something that had not been attempted on such a scale in the past. At present costs and prices were woefully out of balance, said Mr Barclay. But balance would be restored. “What we must be concerned about is providing a system where the whole realisation is returned to the producer in a sane and stable fashion.” This would ensure the greatest efficiency, and an evening out of income and demand instead of the disastrous fluctuations which caused so much inefficiency, both on and off the farm.