PART 3.

PLAN FOR LIQUIDATION OF FARMERS' DEBTS RECOMMMENDED AND OBSERVATIONS THEREON.

In framing the Plan, an endeavour has been made in Part 1 of the Plan to allow creditors and debtors arrange their own affairs wherever that is possible.

In cases where this cannot be done, a method has been suggested in Part 2 of the Plan whereby those farmers who cannot arrange finance are to be carried on under supervision with finance provided by the aid of Government guarantee and the creation of a fund in manner therein appearing. The affairs of those farmers whose financial position is such that they cannot be brought under either Parts 1 or 2 of the Plan, must be administered under the provisions of the Farmers' Debt Adjustment Act, if they or their creditors so desire.

The Plan is limited to taking off the 31-32 harvest, and the putting in and taking off 32-33 crops. It seems little use at the present time attempting to solve the many problems which are confronting the State in the wool and wheat industries. Rather an attempt should be made to carry on if possible for two seasons and then take a survey of the position.

It is anticipated by April, 1933, all persons interested in the industries may be able to make the necessary adjustments, if they are required, as the worst or best may then be known.

The farmer under either part of the Plan is financed for the time being, provided with sustenance and receive five per cent of the gross returns from the farm, also five per cent of any bonus paid for wheat. This is much more than the rest of the community can expect for the next two years. True, in those cases which fall within Part 1 of the Plan, the farmer will be in the hands of his mortgagee and creditors, but he must recognise that it is in their interests to maintain him on the land, and that he will receive equitable treatment from them, and by arrangement his debts can be voluntarily adjusted. The farmer who falls within Part 2 of the Plan will, for the time being, work under the direction of the Trustees and a Receiver and, further, he will have a certain conditional adjustment of his debts.

The fund under Part 2 of the Plan will consist of:—

(a) All moneys received from time to time under the Flour Acquisition Act and paid to the Trustees. The amount of such moneys with a Flour Tax of £5 10s. per ton, would be approximately £242,000 per annum.

(b) All moneys which may be subscribed by the Government and/or private persons in augmentation of the Fund.

(c) Government or private guarantees.

It is anticipated that the moneys required under Part 2 will be financed by way of overdrafts at the Commonwealth and Associated Banks. The repayment of advances will be secured by— (a) The hypothecation to the banks of all securities over crops and stock taken by the Trustees.

(b) Government guarantee.

(c) Private guarantees (if any).

(d) Deposit with the banks of available cash in hand held by the Trustees.

On the determination of the Plan, presuming no moneys are owning to the banks, guarantees will be cancelled and any moneys held by the Trustees would be distributed as provided in the Plan.

If the Commonwealth Bank and/or the Associated Banks decline to make the moneys available or credit required, and the Government cannot find the money or credit, then the Plan recommended by your Commissioners or any other plan submitted to the Commissioners, cannot be carried into effect.

It will be noted that the proceeds received from the Flour Acquisition Act are to be appropriated to the Fund provided in Part 2 of the Plan.

It might be suggested that such proceeds should be divided equally among all producers of wheat, but as the present financial position is so acute, your Commissioners did not consider Part 2 could be financed without the above-mentioned proceeds being utilised to augment the "Fund."

It must be remembered the community are finding such proceeds by the increased price of bread, which increased price will be the resultant effect of the suggested tax of £5 10s. per ton of flour, and your Commissioners think it is in the best interests of the community that the greatest number of farmers be kept producing and the result will be arrived at by financing those farmers whose affairs will come under Part 2 of the Plan.

From inquiries made, the tax of £5 10d. per ton should not materially increase the cost of living.

For the purpose of ascertaining, approximately, the finance which will be required under the Plan, particulars of the bare cost of essentials for the putting in and taking off of 500 acres are given hereunder:—

Cost of Production—Bare Essentials.

Cropping 500 acres—Horse traction (12 to 16), 60 acres cut for feed, and 42 acres seed, grist, etc.; 102 acres held for market. (1) Basis—12 bushels average (no sheep)—

                                                                                                                   £      s.    d.

Superphosphate at £4 10s. per ton and freight 84lbs. to acre .. 90 0 0

Sustenance .. .. .. .. 120 0 0

Wages (including sustenance) .. 115 0 0

Spare parts .. .. .. .. 50 0 0

Insurance .. .. .. .. 30 0 0

Sacks, at 8s. 6d., including freight, for 440 acres, including new sacks for seed, old seed sacks used for oats, 150 dozen .. .. .. 64 0 0

Cartage, at 9d . per ton mile, average 10 miles for 400 acres, 12 bags to ton, 1,600 bags .. .. .. 50 0 0

Sundries (including pickling, grading, and grease) .. .. .. 25 0 0

                                                                                                                 £544     0     0

=27s. 4d. per acre of marketable area, or 21s. 9d. per acre of cropped area. (Above assumes that the farmer has sufficient seed, feed, etc., to put in the crop. No provision is made for rates, taxes, interest, renewals, and depreciation.)