Priority For Finance For Development

Press, Volume CV, Issue 30977, 5 February 1966, Page 9

Priority For Finance For Development

Farm development had No. 1 priority for finance, Mr H. 0. Bradley, supervising valuer of the State Advances Corporation, Wellington, said in a recent address. He said that the corporation would lend to all farmers for development without limit as to the maximum size of their holding, and he suggested that farmers who believed that they could increase their production should see their local district appraiser. They would be assured of a courteous and sympathetic reception.

Of more than £2om authorised for lending to farmers last year, Mr Bradley said, £7m had been primarily for development. Responsible farmers agreed that the atmosphere had never before been so sympathetic to

farm improvement, and it was hoped that advantage would be taken of the opportunity to significantly increase development. The corporation, he said, was keen to play its part in assisting farmers to reach the target so vital to New Zealand.

The corporation had £Bom invested in about 15,000 of New Zealand’s 65,000 farms. Mr Bradley said that assistance could also be given to existing farmers to purchase additional land where it was necessary to make the present holding economic, and if it was in the national interest that additional land should be included in the applicant’s holding. It would also grant loans for the re-finance of existing liabilities where they were hampering an efficient farmer from continuing to develop his property and obtain worthwhile production increases, and where some re-finance was defined as any work which would increase the production of the farm. It included essential buildings, additional stock and plant as well as the more generally accepted development items such as grassing, fencing, capital fertiliser etc. Mr Bradley said that the corporation also was prepared to assist those entering farming, particularly in the younger age group, to acquire economic farms, including stock. Generally an applicant who had recently owned an ecomomic unit was not eligible for further “new purchase” assistance, but there were exceptions.

The maximum loan was normally limited to £16,000 for sheep or mixed farms, but it was exceeded in the case of high country or back country properties and also where worthwhile development was

involved or where the situation merited it. To a questioner he said that the corporation would not lend where it thought that the price for a property was excessive.

Loans, he said, did not normally exceed twothirds of the corporation’s value, including stock and plant and any improvements for which money was being provided. This was, however, not a hard and fast rule and was exceeded where there was merit, particularly in development cases.

Under the Stale -Advances Act of last year, he said, the corporation had the authority to accept what security it deemed fit and was accepting as security for development loans second and even later mortagaiges. Where necessary he said, the corporation had the power to postpone the charges on a loan. In development lending there was considerable flexibility so that essential development was met before charges. In all of the corporation’s lending, Mr Bradley said, it was the personal integrity and farming ability of the applicant that wag given particular attention. Mr Bradley told the meeting that many prospective purchasers signed up to buy a property, subject to State Advances finance being available. “They want to know the corporation’s idea of values,” he said.

“A lot of people think we should be right out of new farm finance altogether—that our lending leads to inflation. But we want to assist young farmers, because they are the men who get the increased production. We carried out a survey once and found some of the increases obtained by young farmers were staggering.”

Dr. K. F. O’Connor asked Mr Bradley if he could help to persuade the Inland Revenue Department to abolish the “ insidious burden” of tax on additional stock arising from development. This factor was holding back the Mackenzie Country, Dr. O’Connor said.

A farmer told the meeting that he was developing a block, and found that if he held back stock to raise flock numbers he reduced his income and raised his taxation. “Nothing stops a development programme more quickly,” he said.