Govt told to ease strain on farmers, or resign

Press, 1 June 1985, Page 1

Govt told to ease strain on farmers, or resign

South Canterbury Federated Farmers has called on the Government to resign unless inflation and interest rates on mortgages and overdrafts in the farming sector are reduced.

The federation’s ' annual conference in Timaru yesterday approved two strongly worded remits asking the Government to ease the financial pressure on fanners. Problems for farmers caused by high inflation and high ..interest rates dominated discussion at the conference; •

The Minister of Agriculture, Mr Moyle, made a brief visit to the conference, but was not questioned by delegates. In a short address, Mr Moyle said the two main concerns facing farmers, apart from the drought, were inflation and interest rates.

The Government was confident that a downward trend in ■ inflation and - interest; rates would begin “quite soon” and that they would return to a more acceptable level, said Mr Moyle.. The farming industry could hot continue to exist if interest rates stayed at the present level, he said. Mr Moyle said; the Government was investigating the peed to conserve feed grainin ; the drought-af-fected area. He hoped to be able to comment next week on the results of a survey of feed grain supplies and the likely needs of stock.

The aim of the survey was to make sure surplus grain was. not exported and that it would be available to farmers at a reasonable price,” he said. 7 Speakers described the remits — which were discussed after Mr Moyle left

the conference — as a protest against the financial predicament farmers were in. Many farmers were at the end of the line financially and the industry needed some form of stopgap measure to prevent a crisis. The first remit called on the Government to move towards reducing all mortgages and overdraft interest rates to the farming sector to a base rate of 12.5 per cent, or declare its monetary policies a failure and resign. The second remit asked the Government to resign if inflation has not been reduced to single figures by Christmas. Earlier, the president, Mr D. B. Simpson, said rising costs and inflation from the proposed goods and services tax would contribute to a highly explosive situation. In recent months fanners had experienced substantial increases in road-user charges, interest rates and the prices of machinery, fertiliser, fuel,. electricity and many other goods. Next season farmers would be expected also to pay a greater portion of meatinspection fees. The last year had been the most traumatic and eventful-since the Depression of the 1930 s and the next 12 months would be very difficult, said Mr Simpson.

The effects of the recordbreaking drought in South Canterbury did not bear thinking about and no-one, either in the region’s towns

or country districts, would be unscathed. '

The drought assistance package for farmers announced by the Government was helpful, but did not address the full extent of the problem. The drought measures might be too little too late, said Mr Simpson. The most pressing problem facing fanners now was to decide whether to kill or feed capital stock. Mr Simpson said he believed there was sufficient supplementary feed in the South Island to allow farmers to retain a high percentage of capital stock provided there was some encouragement from the Government. But by the time further measures, if any, were considered it would be too late, as many fanners would have made their decision. “I hope that the Government will not simply wash their hands of it and say, ‘We have done our drought thing — that’s it’,” said Mr Simpson. . “I believe it will be necessary for the Government'to ’review continually what is happening and to act with an urgency befitting the seriousness of the situation.”

The farming industry had not been treated in an evenhanded manner compared with other sectors, said Mr Simpson. The manufacturers still had export incentives until 1987 and most of their import licences. There were other groups who were ripe with rumour before the Budget who got off scotfree. Interest rates which were still rising unabated had had a harsh impact on the farming industry. With the latest Government stock tenders let at 22.15 per cent it was clear that' interest rates would continue to rise substantially to the detriment of people in provincial regions. With an unprecedented control over the money supply, high interest rates appeared to be a deliberate Treasury-induced Government policy, said Mr Simpson. “I believe the credibility of the Labour Government will sink or swim on the Douglas economic policies," he said. ..Mr?Simpson urged that farmers press to have export incentives removed and have import licences replaced by tariff control to enable the entire economy to move on to the same business footing. < „ He called also for a reduction in Government expenditure. Since the 1984 election 3500 extra public servants had been employed at a salary bill of $7O million. With G.S;T; yet to come, this had become the major growth area in employment. ) The reduction of the national debt was a stated object of the Government, but the debt had risen 34 per cent since the 1984 General Election to $6700 a head of population. '