FARM FINANCE

Waikato Times, Volume 127, Issue 21183, 5 August 1940, Page 6

FARM FINANCE

PLANS FOR LOANS INCREASED PRODUCTION ASSISTANCE BY STATE ADVANCES SCHEME EXPLAINED An explanation of the Government’s emergency plans to finance the increase of primary production throughout the Dominion was given | to a combined meeting of the Wai- | kato Primary Production Council and the South Auckland executive of the Farmers’ Union in Hamilton to- i day. when an address was delivered by Mr H. M. Caselberg. supervising valuer of the State Advances Cor- ; poration. Many phases of the drive to increase production, as part of the Dominion’s war effort, were dealt with by Mr Caselberg, who ! also answered questions. Mr Caselberg said the National : Council wished to give district councils all the information it could, and had set out details of production required. There was nothing which would hold up the Dominion’s production. except those difficulties which the nation as a whole could expect in wartime, such as shipping and like matters. The speaker briefly ran through the 14-point programme for the furtherance of primary production, and stated that the job had been planned as a farmers’ job, the State Advances Corporation coming into it only for administrative work. Not For Rehabilitation “Within the plan,” said Mr Caselberg, “there is money available if the district council feels that the work of primary production in its area is being held up through lack of money.. It is not a rehabilitation scheme, although in some districts that impression has been gained. I am not suggesting that nothing should be done in the direction of rehabilitation, but I am suggesting that it would be wrong to graft it on to the war emergency regulations.” The loans came under three classes:— Loans to farmers. Loans to dairy companies. Loans to agricultural contractors. As an illustration of the manner in which a loan to a farmer would operate, Mr Caselberg took a hypothical case of a man, with a £IOOO mortgage on his property, who wanted £IOO for a pig lay-out.

He would obtain a form and lodge it with the corporation branch in his district, and the executive finance committee would decide whether the work came within the scope of the plans.

The reporting officer would then meet the farmer, make his report, and arrange repayments and other details, after which the application would reach the branch office in the district, which had powers which obviate the necessity of the matter going to Wellington. When it was satisfied that the matter was in order it would send out a simple form of offer and acceptance, stating that a loan of £IOO at £4 2s fid per cent was available for a certain period with certain repayments. With regard to the question of whether a loan should be charged to stock or manure, the speaker said that difficulties might arise, and it was in that direction that the farmer himself could be of great assistance. It was also hoped that the collaboration of the mortgagee would be forthcoming. “Incidentally,” said Mr Caselberg, “the stock firms had taken an interest in the need for increased production and actually had a scheme ready in some districts by which they could make advances to farmers. The helpful co-operation of financial firms and banks will be necessary to bring the scheme to a successful conclusion. The executive financial committee can be of great assistance as regards repayments of loans. There can be no set rule in the matter and each case must be treated on its merits. Let us get the money back as soon as possible, but at the same time let us do nothing to hamper production. We do not want to do anything through big repayments that will impede anyone’s efficiency on the farm.” No Set Amount The speaker also stated that there was no set amount for a loan, but the National Council was keen that no loan should be above £2OO, although nothing to that effect was included in the provisions. In reply to Mr J. H. Furniss, Mr Caselberg said it was not essential to have the mortgagee’s consent before the loan was taken up. The mortgagee could repay the loan at any time. In answer to another questioner who asked if the type of lending proposed under the scheme would not be risky, Mr Caselberg said that it was envisaged under the plan that the man who applied for a loan could not receive the money from the usual financial house. Thus, there might be some element of risk. It was explained by Mr Caselberg that the State Advances Corporation would have priority over an existing first mortgage. Mr R. A. Candy expressed the opinion that this was the chief objection to the scheme. Mr Caselberg, m reply to a question, said he had insufficient information at present to say how the moratorium regulations would affect the scheme. Help for Dairy Companies Mr Caselberg also explained the scheme for making finance available : to dairy companies, which, however, would be expected to secure finance through normal channels when possible. That point would be viewed with elasticity by the State Advances Corporation. As far as dairy companies were eoncerned there would be no regulations governing priority of mortgage, but the dairy company would take full responsibility for repayment.

Finance would be lent to companies for two purposes.. The first

was for extending or altering plant for the purposes of increased production. For this the interest rate would be 3 per cent. Secondly, money would be made available to companies for the purpose of re-lending to suppliers who required assistance to increase production. The dairy company would, in these cases, pay £3 12s 6d per cent interest and would re-lend at not more than £4 12s 6d per cent. Provision was also made for assisting agricultural contractors at £4 2s 6d rate of interest. Loans wouk. be made in specially-selected cases. If no contractor exsited in a district, Mr Caselberg considered, an application for finance from a contracting organisation set up by farmers on a co-operative basis would be viewed favourably.

Negotiations are proceeding for increasing sales to the United States and Japan. The people of Trinidad have subscribed a further £IO,OOO for the purchase of aeroplanes, bringing the total to £52,000.