Sheep And Cattle Farming -A Question Of Faith?

Waimarino Bulletin, Volume 4, Issue 27, 2 December 1986, Page 2 (Supplement)

Sheep And Cattle Farming -A Question Of Faith?

This article was written for the Gazette's farming supplement by Taumarunui-based registered farm management consultant and registered valuer, Geoff Burton.

i am pieased to be mvolved with this agricultural news section - surely long overdue in a local publication. I will endeavour to present articles dealing with issues considered topical to the King Country farming community. That community, of course, is not restricted to farmers alone. My comments will relate mainly to hill country sheep and cattle farming, but I hope will be generally applicable. Readers will unavoidably be introduced to my good friend and advisor (everybody needs one) Shelby. Shelby and Mrs Wright farm a very tidy block about 35km west of Wayback. They knocked their place out of heavy bush in the early thirties and have steadily improved it to its present highly productive state. No strangers to hard work, they've done it all - from sowing bush burns by hand from a split sack apron to calculating GST by computer. Shelby doesn'f say much but every word is based on real experience and is well worth waiting for. 1 like to think that Shelby's words help keep the modern high tech world in its correct context. Farmers may be excused for appearing confused and uncertain of their future following the convolutions of the last 18 months. They have suffered wild variations and a nett substantial reduction in product prices. Property values have plummeted by approximately 40%. In many cases equity (nett worth) is now negligible. Some input costs have reduced but the total cost of running a farm continues to increase. The cost of replacing a dwelling or woolshed continues to rise. However, the farmer's ability firstly to borrow building funds and secondly to service the additional debt, is, in most cases, non existent. The powers that be seriously advised farmers that the good times were over and they must face reality. Farmers did this in the most appropriate businesslike manner - by reducing spending to essential productive inputs only. They are now chided by their parliamentary representative for not spending! It it any wonder they are confused? Farmers are working in a world where their livelihood is determined by matters outside their control. These include the international exchange rate, the rate of inflation and the level of government expenditure. All highly variable and ostensibly supervised by an extremely unmanageable animal known officially as the 'free market ecortomy'.

Staying with farming then becomes a matter of faith. Faith in politicians to be fair. Faith in our exporters to produce and market a desirable product and faith in the world to desire it. Asking a b'it much you may say? But I believe the New Zealand farmer can and should look ahead with cautious optimism on several counts: ★ The New Zealand farmer produces a high quality product relatively efficiently. ★ Useful restructuring is occurring in the agricultural industry. ★ The governments of our international competitors are making some noises of dissatisfaction over th^ir agricultural subsidisation and gross over production. ★ The present New Zealand government is showing signs of a more mature approach towards the consequences of neglecting the productive sector. I do not expect any genuine farming family will lose their farm unless they are farming poorly or have made very imprudent financial decisions. I suggest that farming will ultimately be rescued by direct and indirect government intervention and subsidisation. The first stage of this is the current Rural Bank discounting scheme which encourages total debt restructuring. Following stages may involve: ★ Increased Rural Bank refinancing of other debts. ★ Reintroduction of concessional Rural Bank lending. ★ Government control of interest rates and exchange rates. In the meantime the farmer should maintain his system as well as possible and farm for optimum production. The two key basics to concentrate on must be financial management and stockwork. Make sure the budgets are drawn up; don't spend it until you have it; make sure the stock work is done on time. Our problems are not about to disappear. Indeed I suspect the following 6-12 months may prove the most difficult. But we should look past the economic experimenting to the longer term future, cautiously but positively. As Shelby Wright says: "We must have respect for both our plumbers and our philosophers or neither our pipes nor our theories will hold water."