ASSISTING FARMERS

Timaru Herald, Volume CXXXIV, Issue 18797, 9 February 1931, Page 11

ASSISTING FARMERS

CHAMBER OF COMMERCE PROPOSAL). MEETING AT FAIRLIE. With the object of assisting farmers during the present economic stress, the Canterbury Chamber of Commerce have drafted up proposals, which were discussed at a meeting of farmers held at Fairlie on Wednesday night. There was a good attendance, over which Mr J. Trotter presided. The chairman read the statement issued by the Chamber, this being as follows: (1) The mortgagor, mortgagee, lessor and banker, which include stock and station agents, dairy companies, merchants, Rural Credits Board, etc., must in each individual case be willing to carry out the scheme, and sign an agreement to that effect, for one year. (2) The banker will agree to open a new account with a credit limit determined by him, after an examination of a detailed budget compiled by the mortgagor, and subsequently approved by the mortgagee, which will provide the working and living expenses and additional live stock required to maintain average production on the property under consideration. This scheme is not applicable without special arrangement where the working and living expenses will exceed anticipated receipts. (3) Where part or the whole of any property is held on lease, the landlord would be required to act similarly to the mortgagee. (4) Advances payable under paragraph 2 above, will, with interest at an agreed rate, and an approved allowance to cover depreciation of the stock and plant, be a first charge on the following season’s products, and, after these have been cleared, the banker will pay land tax and local rates for the current year, if the season’s returns permit. (5) The balance of the year’s income, if any, would then be available for division between the mortgagee and the banker for the agreed interest in proportion to the value of the farm capitalised on a production basis or the amount of the mortgages whichever is the smaller and to the Value of the stock and plant. (6) Should any surplus income be available, which, as a general rule, appears unlikely in the coming year, it would be paid to the creditor or creditors entitled to receive the same at law, or as specially provided for in the agreement. (7) The parties to each agreement will either determine the values of the land, stock, etc., as provided for in paragraph 5, by mutual agreement, or leave the valuation to an arbitrator or arbitrators to be appointed by them under the Arbitration Act, 1925. To serve those parties who prefer the services of an independent Board, it is suggested. that the owners of farm mortgages in each district who are prepared to adopt the scheme should appoint at a meeting called for the purpose, someone—preferably a solicitor with a large mortgage business—to represent them, and the bankers should similarly appoint a representative—preferably a stock and station agent in sheep and crop growing districts and someone with an extensive knowledge of the dairy industry where dairying is the chief interest. These two representatives would appoint the third member of a Board under the conditions of the Arbitration Act, 1925, which would have definite powers to settle all disputes in addition to fixing the valuation of the land and stock. Such valuations would usually be made without any personal inspection and be fixed under some system based on actual returns to be supplied by the mortgagor and confirmed by the banker or mortgagor’s accountant. The expense incurred by the work of such Boards might be met by a fixed fee for each valuation.

(8) Some facilities would be necessary to enable mortgagees, who are dependent on their interest for living expenses, to obtain small advances against the accrued interest, which cannot be paid before the season’s returns are in. This should be possible provided the mortgagee can pledge the mortgage security for this purpose, but legislation for this concession would presumably be necessary where trust funds are so invested.

Interest and rent are usually paid at half-yearly intervals; an important consideration will be the question of paying interest at bank rate on the payments due in the first half of the year. After discussion, a motion favourable to the scheme was passed, and a committee was appointed to deal with any further matters which might call for their attention.