‘Positive view on farming problems

Press, 1 November 1985, Page 23

‘Positive view on farming problems

“The underlying strength and versatility of fanning” has encouraged the board of Pyne, Gould. Guinness, Ltd, to" declare a policy of seeing its farming clients through a difficult period for the industry. ■ At the annual general meeting of the company’s shareholders last week, the chairman, Mr D. C. Gould, described some proposed solutions to farming problems as “negative.” He said that the company “intends to demonstrate the capability and determination required to see its clients through this difficult period just as it has done throughout the history of the province. The company’s view is that some of the solutions being proposed, such as the widespread retirement of farmers, resulting in the severe erosion of a lifetime’s savings, are negative. “The company intends that its clients should remain on their farms and will do all that is commercially possible to ensure this.” Commercial prudence would have to be observed by both clients and company, he said; but the board had" a “very positive view on the future of farming in Canterbury and Marlborough.” Mr Gould reported strong

results for the company in the year ended June 30, 1985. In particular there had been a very good recovery in the stock department, where active participation in the expanding deer and goat markets was playing an increasing role.

Other departments had also improved their performances. and the company was expanding its overseas business. It had established a strong trading base in China, and during the year had initiated new involvement in eastern Europe. On the immediate outlook for the company, Mr Gould said: “High interest rates, the revaluing New Zealand dollar, the continuing inflation of on-farm and off-farm costs, the weakness of the meat industry, and the serious drought in parts of the region served by the company are combining to cloud the picture.” Considerable numbers of the company’s farmer clients would undoubtedly be facing serious financial problems unless there was a marked improvement in trading conditions during the coming season. “But with firm and enlightened handling of the various issues by the client, the company, and by other

creditors, the directors firmly believe their positive view is justified and will, in the end, be thoroughly vindicated,” said Mr Gould. “The board has a very positive view on the future of farming in Canterbury and Marlborough. Farming has weathered worse problems before, and survived to better days; and, given its underlying strength and versatility, it will do so again. “This policy means that commercial prudence must be observed by both clients and company, sometimes, of necessity, it will mean more rigorous farm management, changes in farm output, and very real economies. Nevertheless, a positive view of the industry’s situation is appropriate, and all connected with the industry in better times should be prepared to share in the adjustments now required.” The matter of greatest concern to the company was the level of interest payments, which the free market economy had brought to unsustainable levels for the industry, said Mr Gould. The stock and station industry could not be expected to finance, on behalf of farmers, this massive increase in debt-servicing costs.