Farmers told to think of bankers

Press, 19 June 1986, Page 1

Farmers told to think of bankers

PA Wellington Distressed farmers should consider the problems facing those who have lent them money, says the Bankers’ Association. The comment came from the association’s executive director, Mr Max Bradford, speaking to the annual conference of Federated Farmers agriculture section. Mr Bradford’s address included a section on the finance industry’s ideas for helping farmers through immediate difficulties. These were not made available to the news media. Mr Bradford said lenders had invested $8 billion in farming. He told the meeting:

“Your problems are their problems, too. But it is no good using that situation to presume that sitting on one’s dignity and refusing to talk and listen to lenders is the answer.” ..llnfortunately .some farmers were taking that view of people who had invested in farming. “The group I represent, trading banks, has an enormous financial exposure to, and equally importantly an interest in, the rural sector. They look to a positive partnership,” he said.

The “flair” of farmers could be combined with the new competitiveness of the financial sector, Mr Bradford said. Other countries were experiencing agricultural difficulties also, and in the medium term that had to be good for prices. In Australia 40 per cent of family farms were expected to go under, as would 8 per cent of North American farms, with a similar but slower pattern in Europe.

International marketplace economics meant these losses would drive up agricultural prices in the medium term as production dropped.

Mr Bradford said urban New Zealanders seemed surprisingly relaxed about the prospect of up to 13,000 farmers leaving their properties. That possibility was based on figures used by the Prime Minister, Mr Lange, and would bring up to 60,000 people to the cities.

Further effects would follow as rural industries dependent on farmers suffered.

“In anybody’s terms these sorts of figures are frightening,” Mr Bradford said.

Agriculture’s operating surplus for 1986-87 dropped almost 18 per cent, bringing the drop during the last two years to 40 per cent. The domestic economy would be affected, he said.