Ideas to help some farmers

Press, 2 July 1986, Page 7

Ideas to help some farmers

PA Wellington The National Party’s spokesman on agriculture last evening produced some alternative ideas to help struggling farmers — just two days before the Government unwraps its farm package. But the Pahiatua member of Parliament, Mr John Falloon, said the need for a farm package had arisen only because of the Government’s unwillingness to tackle the overvalued exchange rate. Outlining five main points, he said the suggested measures would help those in extreme hardship and might lead to those in a better financial position continuing to invest in maintaining farm properties. But without interest rates of between 8 per cent and 12 per cent, a competitive exchange rate and inflation equalling the country’s trading partners, there was no possibility of agriculture’s export earning capacity being maintained. Mr Falloon suggested

Rural Bank mortgages could be discounted and a market interest rate charged. That could leave sufficient equity for another financier to allow further borrowing. Another proposal was for more flexible repayment methods such as indexed mortgages. A real interest rate of 5 per cent above the inflation rate could be struck and all other interest payments capitalised on the mortgage. Where there was no equity, the Government could, if necessary, provide a suspensory loan for a portion of the capitalised interest, for one year. Mr Falloon also suggested the Rural Bank coordinate meetings of financiers and advisers on individual cases where debt restructuring would keep a competent farmer on the land. But he said he did not believe a committee structure, which would involve semi public deliberation of individual cases, would work.