ASSISTING THE FARM

Dominion, Volume 21, Issue 120, 18 February 1928, Page 3

ASSISTING THE FARM

FULFILMENT OF SETTLED POLICY RURAL INTERMEDIATE CREDIT UNDERLYING PRINCIPLES REVIEWED The underlying principles and the c-bjects of the Rural Inter, mediate Credit legislation were outlined by the Prime Minister (Rt. Hon. J. G. Coates; at the inaugural meeting of the Rural Intermediate Credit Board yesterday. “There can be no doubt,” said Mr. Coates, “that the meeting this morning of the Rural Intermediate Credit Board marks a very important development in the history of the farming industry of the Dominion, and as the welfare of that industry is the foundation of the country’s prosperity, the occasion is necessarily one which vitally concerns all classes of the community. The object of the legislation is, as you are well aware, the securing of a flow of capital for investment on the security, mainly, of farm stock or produce at rates of interest which will make well-conducted farming operations reasonably profitable. It is a further step in fulfilment of the Government’s settled policy of securing from time to time the best possible conditions for the man on the land, consistent with the welfare of all classes of the community.” Mr. Coates proceeded to make a brief survey of what had been done of recent years to attain this object, and to demonstrate what had been done by progressive legislation to meet the changing circumstances affecting our farming community-, whose welfare, had been the constant concern of the Government. Work of Commission. With regard to the rural intermediate credit scheme, he mentioned that the measure initiating this system of rural finance had its inception in the year 1925, when, the Government set up a commission to inquire generally into the. question of the financial assistance afforded to farmers in other countries and the means by which such assistance was made available to the farmer. “One of the proposals of the commission was that both long-term rural credit and intermediate credit should be administered by a new- and separate branch of the State Advances Office; but the Government felt that if the scheme was to be successfully and economically administered it was essential that the services of some existing organisation extending and represented throughout the Dominion should be available to enable close contact to be kept with the securities for investments of the board’s funds. The Public Trust Office, the operations of which have earned the confidence of all classes of Hie community, met all these requirements, and acordingly the board has been afforded ihe opportunity' of employing its organisation for the more effective administration of the scheme. Direct Loans From Board. "The Rural Intermediate Credit Bill was presented to Parliament on September 1G last, and placed the administration of intermediate credit under a special board of five members (now increased to seven), with the Public Trustee as chief executive member, under the title of Commissioner of Rural Intermediate Credit. The Bill provided only one means for the individual farmer obtaining a loan; that is, by taking up at least twenty-five £1 shares in an. association of twenty persons, and. paying immediately in cash not less-than 20 per cent, of the value of these shares. The Bill was referred to a special committee of the Hbuse of Representatives, and during the proceedings of that committee an important and altogether new principle was introduced into the Bill, and is now embodied in Part 111 of the Act. This provision enables a farmer, on obtaining a satisfactory guaranon obtaining a satisfactory guarantor of at least 20 per cent, of his loan, to borrow direct from the board, without having to join an association. Reasons for Provision. “The desirability of this amendment was felt on two grounds—firstly, that in small communities it might easily prove impossible to find twenty farmers willing to join together and form an association; and secondly, that. it would appeal more strongly to the independent nature of the average New Zealand farmer if he were able to go to the board for a loan without first having to reveal his financial position to his neighbour, as he must necessarily' do if he joined an association. “The Government, moreover, considered that it would be most unfair if the very fact of a man having been willing to' become a pioneer in the more isolated districts of the Dominion should preclude him from sharing in the benefits of rural intermediate credit; and I submit that this in itself is sufficient answer fb those critics who have accused the Government of wrecking the principles of the Bill bv adoping this amendment. "It ’is to be remembered that the fullest opportunity has been preserved for persons desirous of promoting the co-operative spirit, to do so bv forming rural intermediate cedit associations. As an indication that the fears that the introduction of the direct method of applying for loans would lead to the association method being neglected, in practice, are groundless, I need only mention that the formation of one association in the South Taranaki district is now well advanced, and that there are indications that other groups of farmers may also join together in a similar manner. Rural Economic Investigations. "You will have noticed that arrangements are being made for a special committee of the Council of Scientific and Industrial Research to consider the question of rural economic investigations. The committee will be widely representative, and will consist of representatives of the meat and dairy producers, two or three Departments of State, and several economists. The scope of the inquiry will probably involve such matters as costs of production, farm management, rural finance, and other matters of importance to our primary industries, and the investigations will be of far-reaching benefit to the Dominion as a whole.” Concluding, the Prime Minister said it was'only after very careful thought that Cabinet had decided on the personnel of the Rural Intermediate CreditBoard, and that it was satisfied that it had assembled a board as competent to administer the Act as was possible to obtain in the Dominion. “I need hardly say,” he added, "that the success of the Act will stand or fall by the manner in which it is administered, and T leave it in tout hands in perfect confidence of the result.”