TO HELP FARMERS STAY ON THE LAND.

Star (Christchurch), Volume XLIV, Issue 43, 20 February 1931, Page 4

TO HELP FARMERS STAY ON THE LAND.

SCHEME SUBMITTED TO PRIME MINISTER. A voluntary scheme for assisting farmers with restricted credit to remain on their farms and maintain their customary production has been approved at a conference, arranged by the Canterbury Chamber of Commerce, of - Christchurch solicitors, bankers, stock and station agents, dairy company managers, representatives of the local farmers’ organisations and the Chamber of Commerce and others interested, and has been submitted to the Prime Minister as a suggested basis for general adoption throughout the Dominion. The full scheme is 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 farming year. Provision For Living Expenses. (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. Note.—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, be a first charge on the following season’s products. The maintenance of the live stock to be included in the first charge on income, together with an agreed allowance to cover depreciation on rapidly depreciating articles such as tractors, reapers and threshing machines. 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, then to be available for division between the mortgagee and the banker proportionately to the value of the land and the value of the stock which will be fixed at the time the agreement is made; the mortgagee’s payment to be limited to the interest normally due under the mortgage. (6) Should any surplus income be available it would be paid to the creditor or creditors entitled to receive the same at law, or as specially provided for in the agreement. Basis of Agreement. (7) The parties to each agreement may either determine the values of the land, stock, etc., as provided for in paragraph 5 above by mutual agreement, or may 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 suggsted 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 recommend a basis for settlement of all disputes, including valuations for 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 the 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 passible 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. Note. —Interest and rent are usually paid at half-yearly intervals; an important consideration will be the question of pajdng interest at bank rate on the payments due in the first half of the year.