FINANCING THE FARMER.

New Zealand Herald, Volume LVIII, Issue 17754, 13 April 1921, Page 6

FINANCING THE FARMER.

That farmers who are wheatgrowers should have any difficulty in obtaining financial accommodation on the security of their harvest, yields is one of the surprising results of prevailing conditions. Yet the telegrams from Christchurch published to-day suggest that the wheatgrowers are actually embarrassed, and already appealing to the universal refuge for assistance. The paradoxical character of the matter appears in the fact that the value of milling wheat has been guaranteed by the Government, so that the farmer in tho ordinary course, requires advances against his crop pending its ultimate sale is able to present gilt-edged securities for the accommodation. If it is true that, such securities aro to any extent unsaleable, the only possible explanation is that the financial institutions upon which the grower has relied in previous years are being forced by the financial stringency to place extraordinary restrictions on their operations. 'It is not surprising that the wheat farmers should turn to the Government for relief; obviously they have a stronger claim than the woolgrowers, for instance, since the Government is under a specific con-. 0 <

tract to purchase the whole production of milling wheat, and since the market for wheat is not in any way doubtful. But tho Government's contract provides for payment only upon delivery in the terms of actual purchases, and whatever the moral obligations may bo, the resources of the Government are not unlimited. It may indeed be observed that since the Government's guarantee protects the wheat farmers from the effects of economic forces that arc clearly bringing down the price of wheat, they cannot expect at the same time payment in advance for their whole harvest. The control system fixes maximum prices to be paid'when delivery is taken; there ft probably nothing in it to prevent the farmer from negotiating with brokers and millers for sales on a cash basis, if other resources of financial assistance are unable to make him advarfces on the basis of the full guarantee prices.