FARM MORTGAGES

New Zealand Herald, Volume LXXIII, Issue 22449, 19 June 1936, Page 15

FARM MORTGAGES

EFFECT OF REDUCTION "Reflex" writes: — In view of the Government's proposals to reduce the capital value of farm lands, it might be of interest to those who have no experience in farm land, to have n detailed account of what tlio cost of bringing unimproved land into cultivation is. I will base my calculations ut)on practical experience and presentday costs. Taking the land as being (it for ploughing, and only covered with a light growth of scrub and fern, and leaving out the initial cost of the land (which must, however, lie reckoned in the final iigures), .the amounts arc as follows: Initial Cost of 100 Acres of Land Clearing and burning (10s an acre), £SO; fencing (boundary and subdivision), £150; ploughing, sowing and cost of seed, £-100; manures (2.Jcwt. per acre and spreading), £75; cost of small house, £250; shed, concrete yard and fence, £75; separator and liftings, £35; one year's cost of living, £75; rates, taxes and insurance, £10; milkinj; machine and engine, £SO; 40 cows at £5 each, £200; total, £1370. This makes a, total of £l3 15s an acre, without any allowance for the farmer's time and work during the first year, if to this is added the initial cost of tho land at the price usually charged by the Lands Department for ploughablc land —anything from £5 up- ' ward —it will bring the cost of tho farm up to nearly £2O an acre. As few small farmers have £2OOO capital, they depend upon finance by means of a mortgage, either from the Government or from a private person. En pert farmers have told mo my figures are too low. As such a farm does not come into full bearing for at least three or four years, and, too often, requires a second ploughing and rosowing, to put it into permanent patv turc, at a cost of another £4 an acre, it will be easily seen that the owner cannot sell that farm and recuperate himself lor the work he has put into it under £25 v an acre. If the farm earns the interest and working expenses the first two or three years, without counting wages for the farmer, it does very well; the unfortunate farmer looks to the future to re pay him, or else, by selling at a suflicient price to do so, he takes a certain sum m cash, generally about the amount he originally had to start with, and accepts a second mortgage in payment of the balance. If the Government is going to reduce, or wipe out those mortgages, tho farmer will liavo put in years of hard work for nothing.