THE FARM PROSPECTUS

Evening Post, Volume CXII, Issue 145, 16 December 1926, Page 8

THE FARM PROSPECTUS

The farmer in New Zealand, as elsewhere, is crying out for better credit— for more loan money at less interest. In other words, he wishes to inereaso his loan capital; and evidently the best way to do so would be ;to prove to the potential lenders that he can use the money profitably. If that proof "were forthcoming, the loans would be forthcoming also. But the farmer's cry for credit seems to be mixed up with* representations not; of the profitableness of farming but raiher of the reverse. There is a disposition to say that farming does not pay, and in tho same breath to ask for money to farm with. Such a! presentment of his case may not be within the compass of the farmer's intention, but the tone of his complaints is such as to encourage the impression that he is asking for money as • counsel of despair; and even if that impression is false, it is almost as damaging as if it were true. A despondent borrower never commands confidence in any loan market, whether State-controlled,;. Jor private. Clearly, it is not good policy to say that the breaking in ■of undeveloped land does not pay for tho capital expended, and then add: "Give me some." To show that certain kinds of farming, not now prosperous, could be made so by the investment of fresh capital, would be to put a business proposition; but when the general chorus at farmer gatherings seems to bear the complexion of "we can't make- it pay," can anyone expect the potential lender to be roused to enthusiasm?

It is no doubt possible to reduce farming costs in the interest section, and also at the marketing end, but by far the biggest gain is to-be made fit the producing end, byy means of better farming, such as improving the dairy cow. Yet that vital fact would hardly be grasped by the casual looker-on, because he hears ,so much from farmers about high interest, middlemen's profits, and general "hard-uppedness," and he hears relatively little about the 50 to 100 per cent, increase in £ cow's butter-fat yield, to be attained by herdtesting and culling.v The secretary of the New Zealand Federation of Group Herd Testing Associations, Mr. C. "W. Hume, recently pointed out that a few years ago most dairy farmers were quite satisfied if their herd average was 2001b of butter-fat per cow per year. Four years of herd-testing has now brought under test 1335 herds—although there are still in New Zealand over a million cows untested—and out of the 1335 no lees than 984 herdswere last, season over the 2001b standard, including 101 over the 3001b standard. These figures indicate that it would not be aiming very high to make the first objective a Dominion average of 2501b, which—assuming a present Dominion average of 1701b —" would represent an additional 801b of fat per cowl Even at Is 3d per lb, this would bring in an increased revenue •of at least £7,000,000 per annum without increasing the number of cows in milk and- without any appreciable increase in expenses—in fact) it would be extra profit." .'.'.■■ Any business confronted with a sound prospect of a 50 per cent, increase in production should be able to interest a lender. If, as Mr. Hume's remarks would imply, the 50 per cent, increase could be attained without borrowing, then so much the better toy the dairy farmer. But any gain in production ami in rural income would be bound to stimulate rural lending; and even if a farmer were able to gather in another 50 per. cent, of return at little outlay to himself, he could still be relied on to find other n»w activities and reasons for borrowing. If, as is calculated, every 101b increase in the Dominion average .of butter-fat per cow • means an extra £1,000,000 annually to, New Zealand dairy farmers, there are quite several millions of income, and therefore of. borrowing power, waiting to be garner-

(.uli That is the sort of! Information that the fanner should put in lii» Joan prospectus. His lniieli-tulkou.-of mntlulling "cuts" (ire minor, and tlio "can't make it pny" phrnsea should bo omitted. '