DEVELOPING PRIMARY INDUSTRIES

Pukekohe & Waiuku Times, Volume 9, Issue 534, 25 May 1920, Page 2

DEVELOPING PRIMARY INDUSTRIES

ENCUMBRANCES ON LAND.

BUGG EST E1) FAR- It EAC 111NG

REFORMS

(By T. 11. Tidd, Rangiriri)

Now that the-, embargo has been 1 taken eft' hides and the producer of 1 these products given the right to avail himself of the open market, why should not the producers of butter and all farm produce be given the same .privelege also, or otherwise given a substantial increase in price*' At the present prices of butter, it was stated some time ago by the highest Government claify authorities, that the dairy farmers of the Dominion were, as a whole, producing at, ;i s lcss. Since then the many and varied expenses connected with all farm* productions have almost daily advanced in price v Throughout the world food supplies are short of requirements. and millions of people threatened with starvation,- therefore both from a humanitarian and economic viewpoint our farming industry should be afforded every opportunity of expansion.; It is "true the farmer has been graciously allowed s"Jne 315 per cent, increase on his produce compared with pre-war prices, but what is this in proportion to his increased expenditure'.' Almost everything he requhes lias advanced in cost varying to !oo per cent, and more. Take for instance, the increased cost of manuies, so essential in successful farming. The cheapest quotation for slag is about U4 per ton. as against the pre-war price of K)i 7s (id. Bonedust is i:2() per.ton, and so on. Fencing materials, another very important iteyn, have advanced about 500 per cent! Labour, implements, machinery, building materials, seeds, saddlery, tinware, hardware, rates and taxes, together with a continual rise in the purchase cost of land rates of interest, etc. to say nothing of usual household requirements - must also lie reckoned with. It is significant to contrast the small increase allowed tjie primary producer compared with Values obtained by secondary producers: The farmer is given an average of Is ,!ld per lb for his wool, but'has to pay anything from U to KG per lb on manufactured' woollen goods,, clothing, etc. He is perhaps getting'a riso of nearly 100 per cent, on raw hides,

but this represents not more than 2s to 3s on the cost of a pair of boots, for which he and the general, public pay an increase from 10s to 30s per pair. He gets something less than 4d per lb (deducting for the value of the hide) for a beast suitable for canning purposes, and pays 3s for a 21b tin of "bully beef." It would be well for all interested in the success of our primary industry if they realised the real danger of this all-important industry being sacrificed to commercial, financial, and professional interests, secondary industries, etc. It is useless disguising the fact that in spite of supposed prosperity and higher prices, our primary industry is not developing as it should do, nor anything like in proportion to the growth of commercial and secondary concerns. "This point is proved not only by the official returns,, but by the rapid growth of town and city populations. At the present time .it is practically impossible to obtain house accommodation in any centre? .of population in the Dominion. It is-an 'alarming fact that not more rthan - about 20 per cent, orf our population are engaged in agricultural and pastoral pursuits." Probably few countries in the world a smaller proportion of their upon the land than New Zealand, and our proportion is growing less alihost every year. According to apparently reliable figures even America, with its enormous manufacturing output and industrial development in every department, can boast of having onethird (or more than thirty milions) of its people living on farms. Surely in this country—possessed of a beautiful climate, and every natural facility for agricultural development, shoud sustain at least as good a proportion as America on [he land. Given a free and open market, and land* And money for development purposes, at reasonably cheap rates, there is no apparent reason why the dairy industry in particular should not expand enormously and thus relieve the congestion of population in the cities, and also do much to rectify the financial and social disorders that threaten our destruction as a free people. Unfortunately, increased prices for produce invariably means the futher inflation'of farm land values, therefore. how to encourage the one without suffering the ill-effects of the other, is a difficult problem. Under the present so-called freehold tenure every year has witnessed an alarming increase in the number, and particularly the amount, of mortgages registered on tha land. Indeed, enormous as the war expendi: ture has been, it is of small magnitude compared with the stupendous aggregate that has accumulated upon the land in the way of mortgages. I have not the exact official figures to date but calculate they have reached' something like £170,000.000. and are increasing daily at an unprecedented rate. What the ultimate end of fictitious land values will be, and how the farmers of the n*t-far-distant future are going to succeed, especially if products cease to rise in price, is more easily imagined than realised. And further, how the masses of the people are going to pay for food grown upon the land so heavily encumbered with mortgages and heavy burdens of war—taxation, national debts, municipal debts, etc.'— is ever a perplexing thought to those who take any interest in the future welfare of the Dominion. However, seeing that most of these encumbrances have been placed upon the land during recent years, and as all alike have enjoyed more or less prosperity through the circulating of vast sums, the outcome from inflated land values, little thanks is due to us if we endeavour to find a solution whereby the present system of reckless speculation and extravagance can be checked, and the land eventually freed of its encumbrances. Several suggestions come to my mind, but the following may recommend itself as an effective, and not too drastic, remedy: That the Government take control of the situation with the object of doing away with the present short-dated loan and high interest #ystem, and substitute to every farmer and individual aiixious to take up land a more secure and satisfactory tenure by:— 1. That all existing mortgages registered on the land be taken over by the Government and paid for by Government debentures. 2. That the Government substitute long-dated mortgages to all mortgagors, and provide a sinking fund so that all mortgages shall be paid off.\within a given period. 3. That all future mortgages registered on the land shall be to the State with a sinking fund provided.. 4. That all Jand, sales in the future be »anction#i£§)|Jgr the Government, especially where such transactions increase encumbrances upon the land. 5. That where the seller has been in possession for a short period only, or is making undue profit, the Government shall have 'the right to share in such profit, and devote the same towards strengthening the general land and mortgage profit and loss account. Many advantages resulting from such a system, and the alteration in the present system of land tenure, are apparent, namely: Whereas now the landholder is compelled to be continually renewing his mortgages under terms generally more favourable to the mortgagee than to himself, and involving much expense and loss of time, he would be free to settle down and produce and improve his holding feeling that his tenure was secure. It would give the Government an opportunity of obtaining adequate control, and of preventing aggregation in cases where the land could- be more profitably worked under close -settlement. Future generations would be profited by the accumulation of sinking funds, which would in the course of time free the land of its present encumbrances, and thus food supplies would eventually be cheapened. The presenit mortgagee would also benefit in many ways. He would have first-class State security and no loss of interest through moneys lying idle awaiting investment.

As a further suggestion, it would give the Government an admirable opportunity of developing a State Bank for the purpose of assisting settlers and granting loans where necessary for developmental purposes. The various amounts now secured upon the land could thus be transferred by the Government to their own bank, and made payable on demand, while fixed deposits remaining would be paid ordinary bank interest. - Supposing the State charged landowners a flat rate of 5 per cent, interest on their mortgage and 1 per cent, sinking fund, while depositors received 4> 2 p?r cent, interest on their fixed deposits, it would leave a good margin of profit to the State, and ample security against loss on profit end loss account. Estimating the aggregate amount at present secured upon the land at £175.000.000, this amount at C per cent, interest, received from landowners. would bring in an annual return of £lO,500.000. Deducting 4».j per cent, payable to present mortgagees—£7.B7s,000 it would leave £2.625.000 working profit and sinking fund. As considerable amounts would be withdrawn by depositors in the course of time, the State's liability to present mortgagees would soon be considerably reduced, while, on the other hand, they would eventually receive large sums annually in the shape of interest on moneys readvanced as loans to settlers, public works, etc.