Wool, meat support up

Press, 22 June 1979, Page 2

Wool, meat support up

The Government has in- 1 creased substantially the i levels at which it will sup- s port prices to farmers for vool and meat, under the i supplementary minimum i >rices scheme introduced j ast year. But the subsidy on fertiliser has been reduced more < than a half; investment allowances on plant and machinery, new farm build- ■ ings and new employee ac- ] commodation have all been cut to 20 per cent; and the ] Rural Bank’s standard lending rate has been fractionally increased. The Minister of Finance (Mr Muldoon) said that the Government’s guaranteed prices were being moved closer to next season’s expected market levels. The scheme would continue to apply in conjunction with the minimum prices schemes and price-smoothing arrangements run by the producer ' boards. The biggest lifts in the ! prices are for beef. From October 1, the Government ’ undertakes to guarantee that the price of manufacturing beef will not fall below 100 c a kilogram, which is up 30c, or almost 43 per cent, on last season. For prime beef the new figures is 110 c, also up 30c and 37| per cent. Lamb rises to 86cl up 16c or almost 23 per cent, and mutton to 40c, which is an ircrease of 10c or 33-1/3 per cent. , In the case of wool the Government floor price has been increased from 205 c a kilogram last season to 235 c, a rise of 30c or between 14 and 15 per cent. However, for milkfat in whole milk at the farm gate the increase is only 5c a kilogram, or less than 3 per cent, to 185 c a kilogram. In the next season, Mr

Muldoon said, the prices would not be less than those set for 1979-80. “It is still the Government’s intention to try to reach agreement with the producer boards on changes to the present price-smooth-ing arrangements,” Mr Muldoon said.

“The successful introducted of the supplementary minimum prices scheme has meant that farmers can plan and invest to increase production, knowing broadly the prices that they will receive for the next two seasons. This should allow the agricultural sector to play its full part in generating export-led growth. “Over the last three years, the Government has moved the basis of its support for farming towards assistance directly related to increases in output,” he said. “The indications are that the change is bringing about the desired result. The moves in the present Budget will reinforce that trend.”

As part of the change in emphasis in support, Mr Muldoon said, it had been decided to reduce the fertiliser price subsidy from $32 to $l5 a tonne, a reduction of 53 per cent. At the same time, because the fertiliser transport subsidy to off-shore islands had fallen behind the level of other fertiliser transport subsidies, it would be increased from 12.4 c per tonne/kilometre to 25c. It was also proposed to reduce the investment allowance for plant and equipment from 40 per cent to 20 per cent, to equate with the export investment allowance available to manufacturers. This would reduce the discrimination against secondhand machinery, which did not qualify for the incentive,

and should allow better use of existing machinery. At the same time, the 40 per cent first-year depreciation allowance on new farm buildings would be reduced to 20 per cent, as would the 22 per cent rate for new employee accommodation. In line with the increase in the Housing Corporation’s standard lending rate announced earlier in the year, the standard rate for funds advanced through the Government’s rural lending agencies would be increased to 9 per cent from 8| per cent. However, in recognition of the importance of development programmes, and the settlement of young farmers, the concessional interest rate arrangements now in effect would continue.

The resumption of growth in agricultural output would put increasing demands on the skills of those engaged in the industry, Mr Muldoon said. To ensure that these skills were available, the Government had decided to offer assistance towards the

training of farm cadets. From July 1 the wages of farm cadets during some of the time spent in training would attract a subsidy. More money will be made available under the land development encouragement loans scheme introduced in last year’s Budget. By the end of March, loans worth $29.5M had been authorised for more than 1650 development programmes. A further S9OM would be

made available to cover loans authorised to March 31, 1981, to maintain the impetus of the scheme. As part of the programme to encourage land settlement and development, the Department of Lands and Survey would put another 60 farms up for ballot during the present financial year, and as well 1200 farmers would be settled by the Rural Bank.