Reid Farmers in $NZ call

Press, 29 September 1988, Page 34

Reid Farmers in $NZ call

PA Dunedin Reid Farmers’ chairman, Mr Bob Hudson, wants the recent decline in the New Zealand dollar to steepen and be coupled with low interest rates. “Those are the two things which have made farming very difficult,” Mr Hudson told the company’s annual meeting yesterday. He conceded that since his accusation in Reid Farmers’ annual report that economic policy was destroying the productive sector the exchange rate had declined significantly.

But a more marked decline in the dollar and lower interest rates was wanted. “Prices for meat and wool have been depressed by the artificial exchange rate. "It has not been by any means a level playing field. In addition to abolishing subsidies the Government has tended to interfere as soon as interest rates have started to go down and that in effect helped to keep the exchange rate up,” Mr Hudson said. “One of the reasons the

Government does not want interest rates to fall, of course is it would have some impact on the inflation index. “But I am on the side of the producer not the consumer, who is the person to take overseas tripe and imports goods which to a large extent New Zealand could do without.” Mr Hudson repeated his earnings forecast for the present year of a downturn in pre-tax profits, but an improvement in net profit because of lower tax rates.

For shareholders taking bonus shares in lieu of dividend, the strike price is 137.2cp5, he said. Taking the two-for-one bonus issue into account the strike price becomes the equivalent of 46c a share. Commenting on Pyne Gould Corporation’s acquisition of Waitaki International’s 40 per cent shareholding in the company, Mr Hudson said PGC was a company which did the same sort of business in Canterbury as Reid Farmers did in Otago.