RURAL CREDITS SCHEME

Otago Daily Times, Issue 20875, 15 November 1929, Page 10

RURAL CREDITS SCHEME

RAISING OF LOAN LIMIT. HELP FOR SHEEP AND GRAIN FARMERS. (Special to Daily Times.) WELLINGTON, November 14. The Commissioner of Rural Intermediate Credits (Mr J. W. Macdonald) announces that importnut developments ■in the working of the rural intermediate credit system are anticipated as a of the passing of the Rural Intermediate Credit Amendment Act during the session of Parliament just closed. As is well , known, the scheme has already been utilised to a very considerable extent by dairy farmers iu the dairying districts of the Dominion, the use by them of the provisions of the Act having been facilitated through the assistance of those dairy companies which have undertaken to guarantee loans under Part 111 of the Act. The system hitherto adopted of granting a loan of a fixed amount, which is liquidated over a period of five years by deductions from the. milk cheques, has proved specially suitable to the needs of the dairying industry, and, moreover, the maximum of £IOOO hitherto operating for any one loan has been sufficient to meet the needs of the average dairy fanner. In the cose of those farmers, however, who are engaged in sheep-farming or in grain-growing the maximum of £IOOO has been carccly sufficient to meet their financial requirements during that portion of the .year when expenditure has to be incurred in connection with their farming operations and no revenue Is being received. Moreover, in contrast with the case of the dairy farmer, the cheep-farmer and graingrower receives the greater portion of his withjn a few months during the production season when his indebtedness is rapidly liquidated cither in whole or in part.

The principal alteration effected by the amending Act is the raising of the limit of loans from £IOOO to £2OOO in the case of any one borrower, this limit being more commensurate with the needs of the sheep-farmer and grain-grower. In order, also, to make the scheme more suitable to the needs of these classes of farmers the board has decided to introduce a system for the fixing of limits up to which these farmers will bo able to draw for their seasonal requirements, the amounts being reduced or liquidated from the proceeds of the next season’s produce. The limits will be fixed with reference to the amounts the hoard would be prepared to lend on the usual margin on the proffered security; and the charge on stock, crops, etc.* will be registered against the security to cover present and future advances. Interest will be charged only on the amount owing by the borrower from time to time, and the position of each borrower will be reviewed annually by the board, when it will be decided whether the limit should be varied. In view of the fact that sheep-farmers and grain-growers have, generally speaking, found a difficulty in securing suitable guarantors for loans under Part 111 of the Act, it is probable that the major portion of the lending under the new sys-, tem now introduced will be effected through -rural intermediate credit associations, thus rendering it necessary toobtain guarantors. Several associations are now operating in cheep-farming districts, some of them having been formed expressly in anticipation of the new system being introduced, and It is expected that the announcement of the raising of the limit of loans and the special provisions now being made to meet the nceids of other than dairy-farmers will stimulate the formation of such associations in other sheep-fanning districts. In the meantime, it will be of interest to farmers to know that the hoard is in a position to receive applications either under the direct provjsons of the Act or through rural intermediate credit associations up to a limit of £2OOO in each case.