Farming year ‘worst since the war’

Press, Volume CXV, Issue 33959, 27 September 1975, Page 21

Farming year ‘worst since the war’

The 1974-75 season has been rated by Pyne. Gould, Guinness Ltd, stock and station agents, as “probably the most disastrous of farming years since the war.”

In its seventy-fifth annual review, the company says farmers were hit not only by the continuing fall in export prices, but also by the effects of inflation and ever-increasing off-farm costs, affecting export products.

The review says the prosperity of the two previous seasons has now been more than matched by the severity of the downturn in the economy, largely brought about by the very rapid rise in inflation, the greatest single cause of which had been the continuing increase in money incomes, which were bigger than productivity gains, outside the farming sector. “The extent of the downturn in farming income is not generally appreciated outside the industry, though i its implications for every! citizen are as forbidding as they are for farmers. “Grossly curtailed farm

incomes have meant a steep' reduction, not only in such i routine maintenance oper- ; ations as topdressing, but; also in development. “Deferred maintenance brings an immediate reduc- : tion in farm output, and abandoned devlopment will certainly reduce it in future. As New Zealand lives on what its farmers sell overseas, prospects are at the moment not heartening.” I The review says that i farming is not far from the point at which production and marketing costs overtake returns to produce a situation like that of 40 years ago.

“Farming has been able to carry on only by heavy borrowing and some help from the Government, but a great many farmers have now reached the end of their capacity to borrow. “Stock and station agencies have played their traditional part with seasonal finance for clients, but their own in-

'debtedness to the trading banks is restricting their freedom to lend.”

1 Discussing proposals for stabilisation of farm ini comes, the review says that 'organised opposition to ; some form of mandatory stabilisation appears to have abated in great measure during the year. The original suggestion, favoured by the Government, that farm production should be taken over and ; marketed by one authority I roused vociferous opposition, jbut Federated Farmers was now putting forward a ; scheme for stabilisation which avoided any suggestion of public ownership. i The scheme would probably not meet the desire of jthe Government for a single purchasing and marketing

authority, but it was a long step from, the non-inter-ference principle, so widely supported by farmers only a couple of years ago. The review says that if continued inflation reduces incomes to a level at which farmers are unable to carry on, the public must help to maintain the flow of exports needed to keep New Zealand afloat. The scheme suggested would enable public participation without disturbing the principle of industry control on which most farmers insist.

The review adds that unless inflation can be brought down to 5 per cent, a rate which farming could handle, immediate assistance must be given to compensate farmers for a major part of cost increases.