FARMERS’ DIFFICULTIES

Otago Daily Times, Issue 18424, 9 December 1921, Page 7

FARMERS’ DIFFICULTIES

PROPOSALS FOR RELIEF. ' ADJUSTMENT OF MORTGAGES. (Fkom Ouh Own Cobeespondent.) , WELLINGTON, December 8. Far-reaching' financial proposals to meet the case of the farmer struggling ■under a burden of mortgage liability in the face of falling prices and land values, amounting virtually to an arrangement for a reduction in the amount of mortgages, consonant with the fall in values, were placed before tbe Prime Minister to-day by a deputation representing the Dairy Farmers’ Union of South -Auckland and the Bay of Plenty. Mr J. A. Young (Waikato) and Mr F. F. Hockly (Rotorua) attended the deputation, which consisted of Mr A. O. Feat; or Te Awamutu, and Mr T. C. Grace, of Pirongia. An apology, for absence was received from Mr R. F. Bollard (Raglan), Mr Fear said that the proposals were discussed, at a meeting of the union on Saturday night. Many farmers were leaving the" land possibly on account of speculation. It Was felt that something should bo done to keep up production. Many mortgagees ftuwi offered tb reduce the amount of mortgages in order to keep the farmers on the land. They felt they must do something to .'help remedy matters, and made proposals accordingly. They had two proposals to make, which were alternative. {Scores of farmers were leaving their farms. Mr Massey said these statements were Of a very serious nature. He represented an agricultural community, and he knew none of those cases. These statements did great harm if not correct. • Mr Fear then read a statement in which it was set out that a large percentage of tlje' farmers were in difficulties ;at the present time, . and in scores of cases had left their farms. For these men to oease producing, and the land to fall back into the hands of the mortgagee, who would not farm it, would.be detrimental both to the individual and the"'State. To obviate this trouble the Dairy Farmers’ Union roodminenaod that'a commission should be set up representing the Government, mortgagee and mortgagor, and arrangements made where the mortgage was unusually high, through land speculation, and in many cases unpaid principal or purchase money, that the mortgagee should reduce the amount of the mortgage and the ■ rate of interest to a level, such that the farmer could reasonably be expected to pay. Where- a farmer was holding more land than he could farm/, after the mortgaged were, adjusted, he should divide tne far.rn in two or more parts, and lease with a compulsory' purchasing clause to the incoming tenant, the mortgagee to divide the mortgage in equal parts, and thus relieve the tanner of half the liability. The next suggestion was that there should, be legislation passed at once so' as to give, ttto Government power, as the third party, to settle any dispute that might arise between the parties concerned, the necessarysurveys in connection with sub-division, and the legal expenses in connection with thetransfer should be conducted by the ■ Stated Departments at the lowest' possible cost/ seeing that in many instances the incoming men would possess only limited capital. It, was suggested that moans should be devised whereby the State Advances, or some other such Department should advance an amount up to say £3OO, on a, pound for pound basis, at current rates, of interest. By this means, it was claimed, the production of the dominion would ho increased, the burden of the farther* lightened, the. finances of the country stabilised, the mortgagee placed on a sound; footing, and thus confidence be placed in the farmer, who was anxious to carry on and face the present critical position. : Mr Grace read the alternative scheme. The' object, he said, was to speed up matters and increase production. The details were that a commission should be Appointed to investigate ■ all post-war, second and subsequent mortgages, with a view to advising the .Government to enact special legislation, so that in all cases where the total value of all existing mortgages oh the property exceeded, 90 per cent; of the average cash selling values during the year 1919, the commission might request all the parties concerned to attend and show reason why the amount should not be reduced to that level. Second, ■ there was suggested an amendment to the Valuation ' Act, permitting a special"valuatibn of;-all agricultural, land In the dominion; the new cpmputa-, tion to be on the basis of productive capa.bility and proximity to commercial facilities. The next suggestion was that where a genuine farmer found it impossible to farm the whole of his property, and had found a tenant, he might apply to the Lands Department to be relieved of part of this property, this to be leased on the o.r.p. tenure, a special bond to be issued to tho vendors for 10.. years without interest, to cover the value of the purchase,- the tenant to pay all transfer and survey cost. Finally, it was suggested that there should be a regulation of thej sale and purchase of all agricultural land to positive productive value, - based on; the farm returns for. the year previous to the special valuation, the price per acre not to exceed a sum equal to 5 per cent, of the gross earnings of the farm, for the year previous to /he special valuation. Mr Massey, said that ho was anxious to. increase production, as it was the only way that the oounti-y oduid carry its burden.; Ho could quite understand the difficulties with which many farmers were faced on account of their having come in when values were high. The law provided a way out, and many good men had had to take it. They, had recovered their position after perhaps . years of industry. There was one point which the deputation appeared to have missed. They wanted a commission to come along now 'and fix the values of land nominally owned by these farmers, reduce the amount of mortgage, and the rate of interest, and give the man a fresh start. That appeared very fine to commence with, but what would be done five years hence when values had gone back to normal? The country we may assume would be, prosperous, and the value of land would have risen; then the mortgagee would ask what was to be done? Would they go; over the matter /igam and increase the values in the interests of the mortgagee. If he could see that the commission would do any good (he was-, not sura it would not), he would be glad to let them have it. He would consult the Waikato members and his colleagues and if there was i anything that could bo done to assist an industrious people it would bo done. With regard to mortgages he wished to remind them of one thing. A measure was introduced last year giving small, mortgagors exemption from land tax, up.to a certain amount. He asked the commissioner the other day how many were exempt from taxation under- this arrangement, and lie was told that over 5000 small farmers had been exempted under that law. A number of them who had wished to obtain the rebate of the laud tax had written' in complaining that they lib d not received their taxation papers, not realising that they were exempt. He mentioned this to show that the sympathies of the Government were with the strugglers. The deputation had come with a difficult problem,, which he would' have to think over. He would consult with his colleagues, and if any satisfactory conclusion could be reached he would let them know. Mr Fear said that jf the commission was set up they would bring tho farmers along, and in some cases the mortgagees who had said thhy were willing to reduce the amount of their mortgages. There were mortgagees who'were willing to come down. Mr Massey: Well, if they are willing, where is the difficulty? Mr Fear said they wanted the Government present as the third party. He quoted the case of one mortgagee who said that ho was willing to- reduce the amount due to him if tho man. to whom he stood in the - relation of mortgagor would do the same thing.. Mr Massey said that if he could send a good officer, a good reliable man, who could bring the parties together and make a satisfactory arrangement, ho would bo glad to do so.