EXPLOITING THE LAND

Otago Daily Times, Issue 27391, 17 May 1950, Page 4

EXPLOITING THE LAND

Effect Of Tenures Offering No Rea! Security Written for the Daily Tinfes by Consiliarius. 11. Within the short span of a hundred years New Zealand already has a "formidable, and still growing, list of derelict hill-country properties which have been robbed of productivity. The fertility of their soils has been recklessly squandered and their earning capacity transformed into an annual financial burden to the taxpayer. Molesworth and St. Helen’s Stations, once proud, far-flung sheep empires within themselves, have failed, and throughout the high country are many smaller properties, aggregating tens of thousands of acres, which are ceasing, or have already ceased, to produce.

In recent years the Department of Agriculture has done excellent work for farmers and for the land, but its efforts have been directed towards rectifying deterioration. The cause of deterioration in many cases lies beyond the scope of the department, and it can be eliminated only by the implementation of a progressive land policy by the Government.

The main factors contributing to the ruin of hill country are types of tenure, bad management, and tenants’ lack of capital. Tenure can have a definite bearing on both management and capital. The lease which does not give real security of tenure at a continued basic rental promotes bad management because of the general tendency to exploit the land for immediate gain at the expense of future production. Good farming necessitates the annual return to the soil of a fair share of the profits, but the terms of some leases give no incentive to adopt this practice. On the contrary, many runholders, in good times, prefer to invest their profits elsewhere because they feel that should they be forced to give up farming they would lose a large proportion of the amount they had returned to the property.

country block, with a capacity for 2500 dry sheep which was auctioned to a tenant for £450 a year rental, plus rates. Because of the terms of tenure, which limited borrowing capacity, this man bought old sheep at 30s, though the country was obviously suited only to young animals. Within two years the sheep were sold for as low as 6d a head, and the place was taken over by another man at a reduced rental of £l5O. He bought young sheep, but in order to make an immediate profit, increased the number to 3000, and rabbit-farmed as a side-line. Tenure Restricts Development Within a short time the place was again on the market, but this time it was taken over by a man with adequate capital and sound farming knowledge, who had another run as well. He reduced the stock by . 1000, cleared the run of rabbits, and was soon obtaining more wool from 2000 sheep than me previous occupier had been from 3000. He was shortly able to increase the stock to 2500, and with that number on it the property still continued to improve. But according to the present tenant, the property, except in times of high prices, is an uneconomic unit, and, because of the tenure under which it is held, he will not spend money on it in capital improvements. If he did so he would stand to lose too much if the rental were raised and he decided not to carry on with the lease. Another typical example which discloses the evil effects of overstocking and bad management is shown in a run which carried 3500 sheep and averaged an 80 to 85 per cent, lambing. An incoming tenant increased the stock by 1000. and within two years the carrying capacity had been reduced to under 3000, and lambing was below 30 per cent. There is always a big temptation to a tenant going on to a leasehold run that is in good heart to overstock in an effort to make money quickly, and this practice is also widely adopted when a lease is nearing the year of renewal. Security of tenure and the knowledge that the full value of improvements would be credited to him. and be recoverable when he wished to give up farming, would assist very materially in preventing despoliation of the land. The balance sheet showing the cash returns from any farm property is no true criterion of its value or condition. The crucial figures are those which show what has been reinvested in the soil each year, together with the la- bing percentages and the weights of fleeces shorn. Under the present system, few hill-country leasehold runs measure up. in this respect, to the standards of good husbandry. (To be continued.)

Handicap on Borrowing

This aspect can also seriously affect the credit of tenants of hill-country leaseholds. Farmers who do return as much as they can afford to the land every year, have found, in times of recession, that their borrowing capacity is limited to a relatively small part of the real value of the improvements they have effected, because of the terms of their leases. Shortage of working capital brought about in this manner can force even good farmers to exploit the land, and many men have bankrupted good runs in the endeavour to save facing bankruptcy themselves.

The present methods of assessing rentals is detrimental to good husbandry. When a tenant improves the carrying capacity and value of a run, it frequently happens that his rent is increased when the lease is renewed. Should wool and meat prices be high at this time valuers fix the rental in relation to returns from these, further bolstering the rent. If the tenant, who knows the property, realises that the rental is too high to be economic under normal circumstances, he has two alternatives; either to take the place at the increased rent'and then exploit it while prices remain high, or let someone else take over, thus losing any reward of previous good husbandry. In the latter case the incoming tenant will be forced, when prices recede, to “mine” the land.

Specific instances where the present system of tenure of hill-country results in abuse of the land are numerous. Not only the Crown is to blame, for in cases where land is vested in public organisations the rentals received generally appear to be the prime consideration. A typical example may be cited of a 1900-acre hill-