Farmers tightened belts

Press, 15 October 1976, Page 15

Farmers tightened belts

By

LANCE EARLY

As the wool market firms, and the prospects for export lamb appear better than for some years, the “Annual Review” published by Pyne, Gould, Guinness Ltd, makes some sombre comments on the state of farming during the last decade. “Of the 10 years since 1966, seven have been years of low to modest profitability, with spending restricted to essential maintenance and little or no scope for capital investment in improvements to increase production,” the “Review” states. “The two good years from 1972 to 1974 enabled a lot of deferred maintenance to be overtaken, and some capital improvements to be made. The disastrous 1974-1975 season followed, and though the current (1975-1976) season has left most farm accounts healthy, the tendency has been to conserve cash because many farmers consider the rewards for development spending to be unattractive.”

Earlier in its preface, the “Review” notes that “all farm costs continue to climb with local and overseas inflation to increase the already heavy pressure on producers, many of whom feel that the rewards for their efforts are below those of other sections of the community. “Farmers are traditionally reconciled to the varying fortunes dictated by fluctuating markets and the uncertainties of the weather, and look to put by surplus money from good years to ease them over the bad.

“High costs and taxation have for many years now left net results that tempt farmers to look hard at spending on development to increase production, and even in some cases to reduce output to control costs.”

It was a quiet year in the rural real estate market, according to the “Review.”

“The uncertain farming outlook, the scarcity of first mortgage money and the General Election almost entirely removed purchasers from the market for rural land for the greater part of the year. “Interest in smaller blocks for addition to existing properties did remain steady, particularly where vendor finance was available, but local body tightening of requirements for small blocks near the towns stopped sales for this type of holding for residential purposes.” The “Review” states that

for a short period early in 1976 a strong demand for farm properties developed, and the unusual situation in which there were many buyers but virtually no sellers emerged. Sales of general properties could be made only when vendor finance from 50 per cent upward was available. This burst of interest was short-lived as many transactions depended on vendors being

able to acquire other properties. Demand at present, according to the “Review,” is for versatile properties of 150 to 200 hectares offering possibilities of diversified cropping farming, or for bigger, low-cost grazing properties where little plant is required and inputs may be kept to a minimum. Even here, vendor finance is essential in most cases.