LAND FOR REHABILITATION

Evening Star, Issue 24917, 15 July 1943, Page 3

LAND FOR REHABILITATION

VIEWS OF FARMERS' PRESIDENT In his address at Wellington, opening the annual conference of the .New Zealand Farmers' Union, Ihe president, llr \V. W. Mulholland, devoted some time to discussing the use of the land for rehabilitation. Here are some of his most pertinent points:— Small Holdings In looking at the possibility of further sub-division of lands, whether for rehabilitation or otherwise, certain facts need to be clearly realised. " Small holdings," as that term is properly used, must be limited to situations where soil, climate, and available markets make successful intensive cultivation possible. Market gardening is one of our best-known forms, of farming " small holdings," and obviously any considerable extension of this would-.result in a larger supply of such produce than the available market could possibly absorb, with disastrous results to the settlers. The possibility of developing markets for the produce of " small holdings " should be explored very fully, but the greatest caution must be exercised, and optimism not allowed to displace common sense. Evaporation, which is being more largely used every day under war conditions, may influence the position very considerably in peace time, but one should not gamble the capital, happiness, and welfare of prospective settlers on unproved possibilities. Service To Tyro Farmers. I do not favour settling iuexperienced, or partly-experienced, men under the direction of a supervisor. This is a very expensive and slow way of learning farming. But I do think that something in the way of. a " farm management service," where the youn" settler can go voluntarily and discuss his farming problems and receive advice, would be advantageous. This need not. be on a professional basis. Local farmers with long experience would give the best service, and, no doubt, suitable men would willingly give their services Problem of Values.

It is not possible to pay a reasonable price for land from the point, of view of -its productive value, and subdivide it, and put the necessary improvements on it, and make it a ready-made farm without having the total capital value, including 'improvements, far too high to give the prospective settlor hope of success. Costs of erecting the necessary buildings, fencing, and providing tile necessary amenities are so high to-day that they make the total capital outlay altogether too great. Consequently, one of the major problems in using subdivision in rehabilitation is that of providing farms at values offering reasonable prospects of being farmed successfully. If this is not faced' at the beginning severe revaluations and reductions in rentals or interest charges in a few years' time will be inevitable. Mortgage Restriction. Any system of valuation is too liable to error' to be used to fix an absolute value lor land over a period of years, but I suggest that a method of limiting values by restricting the amount of mortgage that could bo registered on the basis of the productive value, would be reasonably effective without having the objections of serious inequity and hardship which would apply to a rigid'fixation of the price. Past experience has shown two things —that unlimited mortgages become a very powerful influence in infjatinq land values, and that too high mortgages, not too high prices of land, have been the cause of most of the troubles where over-capitalisation was involved.

Repayment Scheme. I would suggest that, when the mortgage indebtedness is a high percentage of the capital investment the basis for the first 10 years, at least, should be one of shared risk between settler and financier, whether the financier is the State or a private individual, on the following lines:—After paying all the working expenses for the year, and leaving the settler a living wage, the financier should take all the remaining income up to the full amount of the interest owincr to him in the terms of the mortgage. In years that the returns are good, and there is more than enough to meet the amount of interest, owing, half the excess should be placed to an interest reserve account to assist make up the interest in low income rears, and the balance should be at the disposal of the settler who could use it for the reduction of his mortgage or the development and improvement of his farm. At the end of the period the position should be reviewed, and if the conditions then warrant it a regular long-term mortgage loan should be granted to the settler,

and if his equity then were sufficient he could be freed of any further control except as required by ordinary mortgage terms.