Drought aid measures

Press, 9 May 1985, Page 1

Drought aid measures

By

OLIVER RIDDELL

in Wellington

Measures to alleviate the severe drought have been announced by the Government to help the 500 or so worst-affected farmers of North Otago and South Canterbury. The Minister of Agriculture, Mr Moyle, said yesterday that the measures would go a long way to alleviate the worst effects of the drought.

It was not an across-the-board package, however, and had not been designed to rescue all those farmers in the area who had been in financial difficulty for several years.

The measures were essential as New Zealand could not afford to see farmers put out of business, Mr Moyle said.

The Government would not allow good farmers to be forced off their land through no fault of their own—such as from drought. Some good farmers with long experience in the region, and experience of earlier droughts, were not so badly off; others without long experience needed more help, Mr Moyle said. No accurate costings had been made of the package, which included transport, social welfare, and employment aspects as well as those dealing with finance and agriculture, Mr Moyle

said. The main elements of the package were: Rural Bank priority for loan help for farmers in drought affected areas. Refinancing hard-core seasonal debts and highinterest, short-term loans where those directly affected the viability of a property. The Rural Bank would suspend principal repayments on loans where needed and, if that were not enough, interest would be deferred and capitalised to ensure the farmers longterm survival where there was adequate security. The Rural Bank would arrange seasonal finance itself or through normal sources, or take them over where necessary. Loans of $40,000 to $50,000 would be made to refinance short-term high repayment debts.

Principal repayments would be suspended where restructuring loans were made, and total interest repayments deferred or capitalised for 12 months. Rural Bank interest rates for recently settled farmers would be held at 10 per cent for at least three years. The interest rate would be reviewed after three years, and adjusted if needed. That measure could cost $2.5 million.

Applications for Family

Care for affected farmers would be streamlined, and farmers who had been declined Family Care would be invited to reapply. Counselling and budgeting services would be available. Options for farmers to keep farm workers and service industries would be considered. Where farm workers had been employed under Employment Incentive Schemes, the balance of suspensory loans granted under the schemes would be written off.

Greater funding for studies into irrigation schemes and water harvesting techniques would be available.

Increased cold storage facilities outside the region would be made available so that killing rates could increase.

The Railways Corporation would subsidise the freight costs of transporting hay offered by Southland farmers.

Financial help for onfarm storage of silage would be available. There would .be no embargo on grain exports, but farmers would be encouraged to make adequate grain stocks available for stock feed.

The slaughter of emaciated livestock on farms would be allowed, on humane grounds, as long as

carcases were buried properly.

The Income Tax Act, 1980, would be amended to allow the income from the sale of capital livestock forced by the drought to be spent on'capital items other than livestock.

The Government says it regrets that the needs of the drought-stricken areas of North Otago and South Canterbury have been obscured by party politics. The Prime Minister, Mr Lange, denied that the Government was responding to the drought only because the death of Sir Basil Arthur (Lab., Timaru) had forced a by-election in the drought area. “I acknowledge and respect the view of Federated Farmers in the region that they do not regard the drought measures as politically inspired,” he said. This had been suggested by the Leader of the Opposition, Mr McLay, and the Opposition’s spokesman on agriculture, Mr lan McLean. The acting president of Federated Farmers, Mr Brian Chamberlin, welcomed the measures, which he described as very similar to those recommended to the Government two weeks ago. He especially welcomed the intention to promote irrigation in the region. Government policies had held up progress on some schemes, but the Government was obviously having a rethink, he said. Mr Moyle said the Minis-

try of Agriculture and the Rural Bank would send extra staff to the region, mostly based at Oamaru. They would start work by May 20. Mr Jim Sutton (Lab., Waitaki), whose electorate contains the most droughtstricken areas, said the package had been realistic and in many respects generous.