Farming industry in a trough — Mr Moyle

Press, 2 December 1985, Page 10

Farming industry in a trough — Mr Moyle

By

DAVID PORTER

Hong Kong NZPA staff correspondent The New Zealand farming industry was in a deep trough and could take at least two seasons to emerge but would not be allowed to collapse, the Minister of Agriculture, Mr Moyle, told a businessmen’s luncheon. But he defended the Government’s economic moves, saying it was essential the farm sector move away from subsidies and from being production-orientated to more market-related policies. Mr Moyle later told NZPA that various proposals for alleviating the plight of farmers would be discussed at the Cabinet economic policy meeting after his return to New Zealand after a week European and Middle East tour.

Although he would not comment on specific proposals, Mr Moyle said issues under consideration would include further reduction of farm input costs by tariff and import licensing moves, changes in the tax structure and more flexibility for existing schemes such as the livestock development incentive.

There were some land development schemes where people were tied into programmes which in the light of present circumstances were not warranted but had to be maintained to fulfil requirements to get the benefits*®' the schemes.

“We still have to address the question of whether the Rural Bank can come in with some sort of tiding over package of no interest or suspended interest loans for a two or three-year period.”

“We don’t want our farm industries to collapse,” he told the meeting. “But we will be bearing in mind that farming is a private enterprise activity and must be marketrelated,” said the Minister. “Unless it is, there is not much point in going ahead with forms of production that create surpluses that then have to be unloaded on the market in a loss situation.”

Sheepfarmers especially were being very seriously affected by the impact of high interest rates and the strengthened New Zealand dollar.

“This year farm incomes will be down by a frightening amount ... with the worst affected sheepmeat and wool producers,” he said.

But Mr Moyle said the meat industry had lagged seriously behind other exporters such as the Dairy Board in tailoring products to markets.

The meat industry was now in the middle of debate on reorganisation, aimed at instilling much more discipline among the companies and more adventurous marketing approaches.

“What we are doing is moving from being prffluc-

tion to market-orientated,” said Mr Moyle. “The problem is to do that and keep our farmers in business.

“Our task is to shepherd the agricultural industry through this period, ensuring the freedom to decide what the farmer can produce will be related to the market and leaving the farmer free to make his decisions based on that. “We also have to encourage processors to take that raw material, and turn it into an attractive product.

“But all that will take a great deal of time. “What we don’t want to see is the wholesale collapse of our farming industries. We want to maintain our producers in business so they can make the changes needed.”

The farm business was highly capitalised, with prices that had been paid for land in recent years well out of relation to the market price products had had on world markets. “We have moved to reduce the costs of inputs, enabling farmers to buy freely on world markets at lower prices as well as encouraging them to look at the market and make their decision based on that rather than on the biggest subsidy they can get.” Mr Moyle said present interest rates were untenable for farmers but that there were now signs the situation had peaked and that rates were likely to edge slightly downwards.