THE PRESS FRIDAY, MARCH 4, 1983. New recipes for farm aid

Press, 4 March 1983, Page 16

THE PRESS FRIDAY, MARCH 4, 1983. New recipes for farm aid

The system of supplementary minimum price payments to assist farmers was introduced as a temporary measure to carry New Zealand agriculture through a lean time. Straitened circumstances still dog the industry; markets for much of the country’s agricultural produce are no easier to find now than they were when the S.M.P.s were introduced. For lack of anything better, the scheme has acquired an air of permanence. Payments under the scheme will cost about $385 million this year and payments will continue until at least late next year. By then, however, a better alternative should have presented itself. The Prime Minister, Mr Muldoon, has given a strong indication that the end of the S.M.P. system is nigh. He has asked the farmers for their proposals on what, if anything, should replace it. For their part, most farmers have not been enthusiastic about the system, but they have had little chance to do anything but accept its benefits if they are to stay in business. Most will be relying on S.M.P. payments for up to half of their real income this year; some will have no other real income. The need to survive has forced the farming community to accept, however grudgingly, the crutch that S.M.P.s provide. Without some form of support at a time when markets are as depressed as they are at present, farmers would be forced to retrench. Stock numbers would dwindle, development would be deferred, even maintenance would be limited, and the industry would slip into decline. The country as a whole would suffer greatly. The wisdom of a prop for the industry when a prop is needed is generally accepted; the debate is over what form the prop should

take. For the last two days, the industry's leaders have been meeting in Wellington to codify their ideas on-a replacement for S.M.P.S. The result of their deliberations, of which little is public knowledge so far, will probably form the base for big changes in the way farming is assisted in New Zealand.

Two possibilities are likely to attract a great deal of discussion. One is the proposal that the aim of maintaining a healthy industry could be achieved just as well by Government assistance directed at production by subsidies on such things as fertiliser. High production on its own, however, is as much a curse as a blessing when profitable markets cannot be found for what is produced. Another is that Government assistance should not be paid directly to farmers, but injected into the selfbalancing stabilisation schemes run by the producer boards as loans. This, too, is not without problems, because money advanced out of the stabilisation funds must be repaid from farmers’ incomes eventually and the net result would be that farmers would be going deeper into debt for longer. From the maze of possibilities and permutations of possibilities, the farming community will have to draw up a blueprint for agricultural assistance that will be acceptable to the Government. The Government will have to be convinced not only that the proposals are reasonable and will work, but that they will be acceptable to the taxpaying public. Farmers have become increasingly sensitive to the criticisms of the S.M.P. scheme voiced by the largely urban population. They will not want to create a replacement system of agricultural assistance that attracts a similarly jaundiced eye at home or abroad.