Many measures hit farmers

Press, 9 November 1984, Page 2

Many measures hit farmers

HUGH STRINGLEMAN

By

farm editor The 1984 Budget may be one for the family; it is certainly not one for the farmer. No other group in society has been hit as hard by the Minister of Finance, Mr Douglas. His “Budget for recovery” is sure to be greeting with sarcasm by. farmers, who will not be able to find anything in the Budget to encourage investment in or development of primary production. Instead farmers have found themselves the targets of at least 10 or 12 separate measures involving the raising of Government charges or the abolition of subsidies. Some, such as reduction of the Government input into irrigation and fertiliser, will discourage agricultural investment. Farming leaders have already made quick calculations which show that the combined effect of the Budget measures, estimated to cost $5OOO per farmer, and the rise in farm costs from devaluation of about 15 per cent, will wipe out net farm profits in 1984-85. Yet the devaluation effect on export earnings from primary products went mainly towards a reduction in the amount of Government subsidy by way of supplementary minimum payments. The president of North Canterbury Federated Farmers, Mr Fred Bull, said the average 46 per cent increase in road user charges was savage and unfair.

Although this increase was supposed to compensate the Railways for the

loss of the 150 km privilege, most farm produce travels less than this distance and not by rail. Mr Bull said his own farm truck, used to cart grain, would now cost him more than $lOOO a year extra in road user charges. Farmers already paid road tax on fuel used on farms and county rates, much of which was used for roading. The Railways had no stock wagons or yards left and its grain handling facilities were antiquated and inefficient. "So we have no rail alternatives,” he said. “I have always assumed that for recovery in the New Zealand economy, investment is needed in primary production, but there is nothing in this Budget to encourage investment in agriculture. “The evenhandedness talked about by Mr Douglas is a joke,” he said; Apart from increased transport costs and some delayed removal of subsidies, the manufacturing sector had emerged “unscathed” from the Budget but farmers were being told to adjust in only one or two years. “I am pleased about the help to low-income families,” said Mr Bull, “because now farmers are in that group.” The main moves affecting farmers announced in the Budget were: • Rural Bank interest rates will be raised, based on an indicator market rate of 15 per cent. ’ © Rural Bank funding from the Government will

from the Government will be phased out and the bank will raise all its funds on

the private sector financial markets. • All fertiliser transport subsidies will end immediately and the fertiliser price subsidy will end on March 31, 1986. • The $l5O million Productive Development Loan scheme - announced, by. the outgoing National Government will not proceed. • Part of the cost of export product inspection, such as meat, dorle by the Ministry of Agriculture will be charged against exporters. '• ' f '

® The rate of subsidy for headworks and off-farm works on new community irrigation schemes., will be reduced from 75 to 35 per cent.

0 The grant rate for new rural water supply schemes will be reduced from 50 to 35 per cent. 0 Road user charges will be increased by an average of 46 per cent from February 1, 1985. © The road user component of the motor spirits duty will also be increased 39 per cent, raising the price of petrol by 2.5 cents a litre. - • • The Farming and Agricultural Investment Allowance will not be extended beyond its current expiry date of March 31, 1985. • The Farm Vendor Finance scheme has been terminated and the Noxious Plants Control scheme will cease on February 28,1985. ® Forestry encouragement grants have been abolished. ® The milk subsidy, worth about $3O million a year, will be abolished early next year.