TE AWAMUTU COURIER. Printed on Mondays, Wednesdays, and Fridays. FRIDAY, MAY 22nd, 1936. A NEW FARMING OUTLOOK.

Te Awamutu Courier, Volume 25, Issue 3759, 22 May 1936, Page 6

TE AWAMUTU COURIER. Printed on Mondays, Wednesdays, and Fridays. FRIDAY, MAY 22nd, 1936. A NEW FARMING OUTLOOK.

MANY farmers are apprehensive of what may be described as the new economy in agriculture which has its genesis in present legislative policy. The'promise of guaranteed prices was at first alluring even if only it offered a semblance of security in a Ley enterprise that had drifted steadily into a parlous plight If that was the complete story there could be a ready acceptance without qualification of any kind; even if the return over a series of years yielded no more or no less to the farmer the benefit of stability, with an evenly spread return, would have placed the enterprise on a sound footing. But guaranteed prices is one strand only in the web of changing conditions which the Government is weaving to influence costs as well as returns. It is, of course, apparent that industrial and associated standards which aim to increase spending power in the community generally must be reflected in the farmers’ costs. But even if this be true it is by no means conclusive that agriculture will suffer. If spending power is retained in New Zealand, if the people into whose hands more money is passing can be prevailed upon to accept a purely insular outlook, it matters little what the level may be. There would be speed and equality in the exchanges, the money values would not matter very much, and all sections—including the farmers—would participate in the circulation. But, in actual fact, no such equality can te assured. With more money and more leisure, spending is likely to pass into channels which will divert the money into the exchange of imported commodities, and this will develop an unsound trade balance and a condition of instability. Theoretically there is every justification for the high idealism which has its expression in Government policy, but there is a _ human factor which cannot be ignored. So much depends on the manner in which each individual applies the new-found advantages that success or failure will rest more with the people who share the new order than with the Government that plans it and makes it possible.

For the farmer, however, there is a particular importance in the new economy. On the one hand the guaranteed price scheme has promise of a higher return. But on the other fide of the accounts the naw industrial code will have a direct influence on costs. But there is another consideration which must enter before the accounts may be balanced—the tenure and pledged charges against the land itself. After a quarter of a century of experience of an optional tenure, it is certain that the freehold lias not been as firmly established as might have been hoped for. In the interval of years the ration between capital value and mortgage-hold has outdistanced itself; for every increase of £1 in capital values, mortgages have increased by £3. Simply, then, this implies that for every £1 of assets, the land has been loaded with £3 of private debt—not to mention the public and local body debt which is also a first charge on the land. Moreover, past legislation has assumed that every fanner is a landholder and, conversely, that every landholder is a farmer. The ration between valuation and mortgage figures indicates at once how erroneous this assumption is. But the effect of the policy which aimed to aid the farmers has been that greater benefits, accrued to the landholders, because of the successive increase in the interest of rental charges which agriculture had to bear. Evidently the Government is not unmindful of this, as there ia constant reference to the incidence of benefits—notably the direct reference and the adjustment of mortgage liabilities. Whether, however, the follies of the speculative era which followed in. the wake of the Great War can be so arbitrarily adjusted without destroying security and the credit of agriculture is the problem the Government faces, but as affects .the farmer it would appear that a readjustment of finance may, in the new farm economy, more than offset the rising costs of the Government’s industrial standards. After all, in the questions of tenure and financing there repose the foundations of most farming problems—they are capitalised in the land itself, and beyond them it remains only to establish a balanced ratio between income and outgo—a matter of spending power, and, of equal importance, spending value. And that, if attendant policies of the Government are wisely preserved by the people, should present no insuperable difficulty.