Mr Falloon defends Govt farm support

Press, 2 March 1984, Page 3

Mr Falloon defends Govt farm support

PA Wellington The Acting Minister of Finance, Mr Falloon, has hit back at farmers for criticisms over the high level of Government support they receive.

Federated Farmers' senior vice-president, Mr Peter Elworthy, said on Wednesday that farmers were not prepared to be made scapegoats for the Government’s decision to follow economic policies which had led to exporters having to receive assistance to remain viable on world markets.

New Zealand could no longer avoid a significant devaluation of the dollar, together with a package of fiscal and monetary measures to retain the benefits of a more realistic exchange rate, he said. However, Mr Falloon said yesterday that farm support

measures were partly related to the inefficiency of farm service industries and their failure to adapt quickly enough to changes in market trends and production policies. That was now being recognised and more efficient measures gradually adopted. He said the high level of Government support to major export industry was an indictment of the Government's management of the economy. He was commenting on the release on Wednesday of the Agricultural Review Committee’s report, which said 12 per cent of sheepfarmers’ gross income came from supplementary minimum payments. The net incomes of all sheepfarmers did not derive from S.M.P.s, Mr Elworthy said.

“Any movement of the currency would delay that change because the pressure on the inefficient industries would be reduced," he said.

Mr Falloon said that farm support was directly related to the price levels overseas, which were still very low, and the purchasing power of exports in relation to import costs.

"Any movement in the currency would not alter that situation and if it was followed by wage rises it would leave the farmers in a worse position,” he said.

“Perhaps Mr Elworthy could concentrate on persuading some of the directors who run some of the meat companies in New Zealand to get costs down so that farm support is not necessary,” Mr Falloon said.