Reluctance to force exits

Press, 9 October 1987, Page 2

Reluctance to force exits

No specific mechanism existed to encourage nonvlahle farmers to leave, thdir land, the briefing papers gBL.-. 1 -' There wm a perception in, the rural sector that nofi-vtable farmers leaving their farms was an. essential ingredient to the success of rural debt restructuring. There was also a view that restructuring had been Impeded by the unwillingness of lenders to take decisions that would oblige farmers to leave their farms, the papers said. Federated Farmers and other support agencies had put forward proposals for specific adjustment assistance for agriculture, especially with housing and taxation. However, the papers said, given theGovemment’s clear commitment to f producing a neutral policy environment, and the coverage and flexibility of most existing assistance programmes available to farmers, there was .. no rationale for specific 2 housing and taxation :: help-

It was the Government’s intention that the solution to the rural structural adjustment be a commercial one. The Ministry, supported the Federated Farmers concept of voluntary creditors' conferences being an integral part of the structural adjustment, the papers said. Farm management was responding to changes in the farming industry by moving generally towards less intensive, low input, low-cost fanning systems. Stocking rates had declined, fertiliser applications were being reduced, and cheaper phosphate alternatives were finding favour. Sheep to cattle ratios were declining and dairy beef was increasing in popularity, the papers said. Less labour was being employed,’ lambs were being wintered over, and shearing patterns were changing. There was strong interest in contract production, and increasingly attention was being given to financial rather than physical performance;