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1931. NEW ZEALAND.

RURAL INTERMEDIATE CREDIT BOARD (REPORT OF THE), FOR THE YEAR ENDED 30th JUNE, 1931.

Presented to both Houses of the General Assembly in accordance with Section 76 of the Rural Intermediate Credit Act, 1927.

Sir,— Wellington, 21st October, 1931. In accordance with the provisions of section 76 of the Kural Intermediate Credit Act, 1927, I have the honour, on behalf of the Rural Intermediate Credit Board, to submit a report on its operations for the year ended 30th June, 1931. 1. During the year under review the Board's operations have steadily extended, and the result of the year's working must be deemed very satisfactory having regard to the difficult conditions which have ruled in the farming industry during the period. Previous reports have dealt fully with the establishment and development of the system, and it may now be stated that the Board's policy on all major matters has been defined and that the system is firmly established and is operating successfully. The Board has continued its efforts to extend the range of operations so that the advantages of the system may be made available to the maximum number of farmers throughout the Dominion. 2. An outstanding feature of the year's operations has been the increasing popularity of the method of obtaining loans through the medium of rural intermediate credit associations. As will be seen from the figures published in Appendix I to this report, the amount owing in respect of loans granted through associations greatly exceeds the amount owing in respect of loans granted direct to farmers. 3. The total business through associations, under Part 111 of the Act, and by the discounting of promissory notes dealt with or under consideration at the 30th June, 1931, amounted to £840,301, as compared with £590,246 as at the 30th June,l93o— an increase of £250,055. 4. The year now past has proved a difficult one for farmers owing to the reduced prices received for primary produce and to the unfavourable season experienced in many districts. It is therefore all the more gratifying to record that the great majority of the Board's borrowers have met their commitments in full, and that with but comparatively few exceptions the Board's loans are in a satisfactory position. Although it has been necessary in certain cases to grant relief by suspending principal repayments or postponing interest, these cases have been few in number, and with a reasonable recovery of prices the majority of those to whom concessions have been granted will be able to overtake their arrears in succeeding years. Even if, as appears probable, the prices of produce do not reach the level to which they have attained in recent years, the borrowers should be able to carry on successfully if reasonable prices rule, and if production costs are adjusted in accordance with those prices. Since its inception the Board has insisted upon adequate security for its loans, and has also required that applicants shall demonstrate to the satisfaction of the Board that under reasonably favourable conditions they will be able to make a success of their farming operations and meet their outgoings. It is evident that no

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