Fewer farm loans

Press, 30 July 1980, Page 4

Fewer farm loans

The steep rise in land prices last year meant the Rural Bank could make fewer land settlement loans available.

The report of the Rural Banking and Finance Corporation, tabled in Parliament, says that in spite of the higher allocation of funds made available for new farm settlement, this was out-stripped by the increased costs caused by rising land and stock prices.Farm costs increased 22 per cent cent in the last financial year, the report says, and posed “a major obstacle to the continuing expansion and diversification of the industry.”

“As a result the total of 1118 settlements achieved was fewer than last year.

“Directors are concerned that the present steep rise in land prices is widening the gap between available funds and the costs of settlement, and forcing new entrants to increase the proportion of finance obtained from other sources, often on less than satis-

fctory terms,” the report says. For the year to March 31, the Rural Bank authorised $306.93 million worth

of loans compared with $292.89 million the previous year. ' “The number of loan authorisations was, however, less than the previous year, reflecting in part the improved ability to plough back from farm revenue, but also the rapid increase in the price of land, stock . and devel-

opment costs permitting fewer proposals to be financed within available funds.”

The avarage farm loan value--; was ’ $22,700 — almost’ 20 pfer- cent higher than the previous year’s average. For the first time in its six-year history, Rural Bank investments exceeded $lOOO million.