FARMING DEPRESSION

Evening Post, Volume CVI, Issue 55, 13 September 1928, Page 20

FARMING DEPRESSION

SLOW STABILISATION NO NEED FOR PESSIMISM An optimistic view iv regard to tho prevailing depression in rural industries is taken by the Public Trustee (Mr. J. W. Macdonald) in his annual report to Parliament. "Ono of the most si'i-ious post-war problems/ says tho Public Trustee, "is the widespread depression in tho farming industry. From almost every country comes disquieting evidence that the remuneration which goes to the farmer for his labour is inadequate. In almost every country the farmiir complains of the shrinkage of his income and of the additional burdens, he is called upon to bear. Sincu the post-war depression, and the' consequent financial and economic disorganisation, tho market price of farm; lands has exhibited a downward tendency. This is, however, no matter for pessimism or discouragement when once it is realised that an economic adjustment must necessarily be established. It is abundantly evident that during the boom of the war years prices for farming properties were unduly inflated, and in the majority of instances reached levels which were excessive and unjustified. Accordingly tho fall in tho price of our staple products affected not only those estates which were being actively farmed, but also v those cases, where rural lands had" been sold in' the period of prosperity and a considerable portion of the purchaso-money had remained outstanding. A common experience throughout the country was that farming properties had' been sold at highly inflated prices with small deposits, so that when the drop, in the price of primary products came the were so financially embarrassed that they could not fulfil their obligations. The' plight of some of those who bought during tho boom years was so intolerable that they walked pfE their farms. What, then, are the renlddios for this unsatisfactory position? I cannot do better than quote the words ot.a New Zealand economist on tho point:—'lt c.imiot be ovcrstrcssed that.-, there are no short cuts. The pi'imo essential is tho slow liquidation of tho over-valuation and ovor-inortgag-ing of land, painful and unacceptable as ihis ''may be. This readjustment will occur partly throughl re-transfers at more economic levels; partly through more efficient methods of farming, which toII raise the economic value of land. :;i.n improvement in efficiency will be "facilitated by improved credit and a reduction in the price q£ requisites. . ■'.-.. . In respect of rural credit, a beginning has been made by the Government; in establishing machinery for tho provision of long-period and intermediate credit.' "This process of deflation and stabilisation is now slowly proceeding, and when it has been completed farmers' finances;.^hould rest on a much sounder basis thafn has existed for a number, of years pa^t. Now that we arc recovering our'previous position, it is to bo hoped that the speculation in landvalues will not bo repeated, and that those concerned will realise that the price of farm lands must be principally governed- by the average prices which the products of those lands will yield over a period of years, remembering always the' inevitable cycle of boom and depression." • .'■'_ . ■'.