Cost of Production—Bare Essentials.

500 acres, average 12 bushels; power traction; 42 acres reserved for seed, grist, etc.; no sheep.

(2)—Fuel and oil, at 1s. 8d. and 6s. 9d. per gallon—.

                                                               £       s.     d. 

Ploughing, one cultivation and seeding. £135 0s. 0d. Harvesting. £35 0s. 0d. Carting 10 miles. £22 0s. 0d. Superphosphates (including freight), 84 lbs. to acre. £90 0s. 0d. Sacks 8s. 6d. dozen (including freight), 167 dozen. £71 0s. 0d. Insurance. £30 0s. 0d. Sustenance £120 0s. 0d. Wages (including sustenance). £115 0s. 0d. Parts. £75 0s. 0d. Sundries (including pickling, grading and grease). £25 0s. 0d. £718 0s. 0d.

— 31s. 4d. per acre of marketable area, or 28s. 9d. per acre cropped.

(The above assumes that the farmer has sufficient seed, etc., to put the crop in. No provision is made for rates taxes, interest, renewals, and depreciation.)

The position of the Agricultural Bank as mortgagee of the lands of those farmers whose affairs will not come within either Part (1) or (2) of the Plan must be considered. In these cases, the bank will have to recognise the fact that the carrying on of such farmers has been considered and refused by two bodies firstly, by the creditors; and secondly, by the trustees under Part (2). If both these bodies consider the financial position of these farmers so bad that such farmers have no chance of winning through, then it is suggested that the taxpayer shall not be asked to incur certain loss by carrying them on. Until times improve and properties and saleable, it might be advisable for the bank to keep the present occupants in possession of the properties, giving them sufficient sustenance. This, however, is a matter for determination by Parliament and the Agricultural Bank.

PLAN RECOMMENDED BY ROYAL COMMISSION.

In formulating this plan for recommendation to Your Excellency, your Commissioners have taken into account the following considerations:—

1. The lack of funds at the disposal of your Government.

2. The relief of deserving settlers by the adjustment of their liabilities where these are onerous, whilst preserving as far as possible the contractual rights of all parties.

3. The protection of settlers' assets from the demands of importunate creditors.

4. The desirability of maintaining and securing to the community with the least possible disturbance the usages of trade and commerce.

5. That artificial aids shall not assume a permanency to the prejudice of a sound re-establishment of the industry.

THE PLAN.

The plan recommended by your Commissioners is constructed from elements contained in proposals submitted to the Commission, and is divided into two parts. The first part sets out the conditions to be applied in cases where settlers whose financial position is sufficiently sound to warrant further credit but experience difficulty in arranging finance for their seasonal requirements. The second part makes provision for settlers who may be unable to obtain the required assistance under the first part.

DEFINITIONS.

"Secured creditor" includes a creditor secured by mortgage and/or lien. "Controlling creditor" means secured or unsecured creditor taking security for the benefit of all creditors, and/or such other person as may be nominated by him or them. "Current supplies" means any goods, services or advances necessary for the cropping, harvesting, and marketing of a settler's crop and/or wool clip and every other commodity or service of whatsoever nature or kind which, in the opinion of the controlling creditor or trustees, is essential for the due performance of the aforesaid objects.

PART 1.

1. A settler unable to arrange finance in the usual manner to enable him to continue farming operations, shall apply to his principal secured creditor for the necessary assistance. If unsuccessful, he may apply to the Director Farmers' Debts Adjustment Act for a Stay Order and a meeting of creditors under that Act, provided that the Director may in his discretion appoint a Receiver.

2. The creditor in any of the above circumstances shall, upon receiving from a settler a statement of his financial position, deal with the application on its merits, and if approved arrange where necessary with the other creditors interested, to voluntarily provide between themselves the required assistance, whereupon the settler shall give, and the controlling creditor shall, with the consent of the mortgagee or stock lien holder (if any) take for the benefit of all creditors entitled, a priority lien in the prescribed form over the ensuing crop, clip or stock, as the case may be, including any bonus which may be granted on wheat by the State or Federal Governments, and a statutory charge in the prescribed form over the lands of the settler to secure the repayment of moneys advanced or to be advanced to him for the farming operations mentioned in paragraph one (1) together with interest thereon at the rate therein mentioned, such statutory charge to be subject to existing encumbrances.

The holder of the priority lien and charge shall only be liable to account for the actual moneys received by him under the lien and charge, and he shall not be liable for the defaults or misfeasance of the settler or any agent. The moneys collected by the controlling creditor in respect of such security shall be distributed in the following order of priority.