Farm debt discounting extension welcomed

Press, 18 December 1986, Page 3

Farm debt discounting extension welcomed

Ashburton reporter

The extension of the Rural Bank’s farm debt discounting scheme has been welcomed by MidCanterbury Federated Farmers.

The provincial president, Mr Brian Lili, said yesterday that there were many more farmers in the region who would need to apply.

from three to six months. The extension meant it would now run until the end of June, 1987. The Rural Bank in Ashburton had received 184 applications up to yesterday. Twenty-eight of those had been approved for the scheme which, in simple terms, reduces the principal the bank is owed and restructures the remainder to a more serviceable amount.

received in the first two months.

Somewhere near 200 farmers “had not yet realised that they ought to apply," hes said.

THe six-month extension recognised that farmers had to adjust financially. The scheme, announced by the Government in July as part of its farm package, was extended

The district appraiser for the Rural Bank in Ashburton, Mr Ed Cramp.ton, said the scheme had got off to a very slow start. Most of the applications had been received in the last month. Only 31 applications were

Mr Crampton asid that the scheme was a “completely new concept,” and at its outset "people did not look at it very closely.” Mr Lili said last October that the scheme, had a stigma for farmers, such as “applying for the dole.” This had now gone, he said yesterday. “I think , the stigma might have disappeared with the harsh realities of what is going on out there.”

He cited the wet harvest season last year, and a damp spring this year as reasons for farmers’ turning to the debt restructuring scheme soon, if they had not done by now. Farmers were now

more aware of what was involved in applying for the often-complicated scheme. Preparation included cashflow estimates, farm finance meetings, and the presentation of two years of farm accounts.

Mr Lili, although full of praise for the scheme, said he would “hate" to see it become a permanent arrangement. “It then gives a person the licence not to manage financially as he should.” The national general manager of the Rural Bank, Mr Ray Chappell, told farmers in Ashburton last week that Mid-Canter-bury was a “problem area,” and that farmers should support the scheme to “renew profitability and prosperity.”