FARMERS’ FINANCE

Hokitika Guardian, 18 February 1931, Page 2

FARMERS’ FINANCE

A voluntary scheme approved at a conference, arranged by tdie 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, to enable farmers with restricted credit to remain on their farms and maintain their customary production. 1. 'l’he Mortgagor, Mortgagee, Lessor and Banker which include Stock and Station Agents, Dairy Companies, Merchants, Rural Credits Board etc., miint in each individual case he willing to carry out the scheme and sign an agreement to that effect for one farming year. 2. The “Banker’’ will agree to open a new account with a credit limit determined by him, ai t?r 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 speed 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 he required to net similarly to the mortgagee. 4, Advances payable under paragraph 2- above will with interest at an agreed ynto be a first charge on the following seasonV 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. Alter those have been cleared the Banker will pay Land Tax and local rates for the current year if the season s ieturns 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 tbe 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 purplus income be available it would be paid to the creditor or creditors entitled to ieceivc the same at law, or as specially provided for in tbe agreement. 7. The parties to each agreement may either determine the values of the land, stock etc., as provided for in paragraph o above by mutual agreement, or may leave the valuation to nn arbitrator or arbitrators to be appointed by them under the Arbitration Act 192.1 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 tTTe 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. Those two representatives would appoint the third member of a Board under the couJitb n- ot the Arbitrator Act, 192 b, which would recommend a oasis for settlement of all disputes, including valuation tor land and stock, Such valuations would usually he made without any personal inspection and he fixed under some system based on actual returns to be supplied bv 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 advanced 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 Ftmds are so invested. Note. Interest and rent usually paid at half-yearly intervals, an important consideration will be tbe question of paying interest at Bank Rate on the payments due in the fir£t half of the vear.