NOT FAVOURABLY RECEIVED

Southland Times, Issue 24234, 18 September 1940, Page 4

NOT FAVOURABLY RECEIVED

Scheme To Finance Dairy Farmers .

PLAN TO INCREASE PRODUCTION

A number of dairy factory companies in Southland have not given favourable consideration to the scheme enabling suppliers to borrow money from their dairy companies in order to increase primary production. Inquiries made m the city yesterday revealed that some companies had rejected the proposal. It was pointed out that the companies were run on a co-operative basis and were not profit-making concerns, and that the risks involved did not warrant the adoption of the scheme. The Dairy Companies’ Loans Emergency Regulations enable dairy companies whose memoranda or articles of association do not provide borrowing powers to borrow from the State Advances Corporation to lend money to their suppliers for increasing production. Individual; applications for loans can be made by farmers, but a member of the dairy industry said yesterday that the conditions of lending did not seem to be sufficiently elastic to enable farmers to take full advantage of the scheme. “One of the questions in the application form,” he said, “asks whether the applicant has previously applied to some other firm for a similar loan which has been declined. This gives the impression that if the applicant can obtain the necessary loan from his banker, his commercial house or other landing institutions a loan is not available to him under the Farmers’ Loans Emergency Regulations. If such is the case, the low scale of interest will benefit very few farmers. “Most farmers can usually arrange the accommodation required from their financial houses, though naturally at a higher rate of interest. Those farmers who are unable to do so would probably, in most cases, be unable to offer the Government a security acceptable for the granting of a loan. In any case, the Government’s proposals for providing cheap money to encourage farmers to increase production do not, so far, seem to have the far-reaching benefit hoped for when the scheme was first announced.”