Transactions of RHASS Volume 1940 - Page 036
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| Year | 1940 |
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i i , I‘m), it ’1 ill‘ l i i i 60 SHORT—TERM AGRICULTURAL CREDIT. impracticability of utilising to any great extent the bill of exchange, which is the mechanism of short—term finance common in other spheres of industry and trade. THE NEED FOR CREDIT. Before we pass on to discuss the existing sources of short- term agricultural credit, and their inadequacy or otherwise, we may perhaps with advantage classify the principal purposes for which a farmer may conceivably require temporary financial accommodation. These are, mainly, to cover the financing of either— (a) Current day-to-day needs for wages, feeding-stuffs, seeds, and manures, &c., Where he has commenced farming on his own account with rather slender financial resources; or where, owing to market prices or other causes, he has to ‘carry’ either his stock or his saleable crops for a longer period than he had bargained for; or where he has suffered a setback owing to stock losses, poor yields of crops, unsatis- factory prices, or other causes ; or (b) The purchase of his seasonal requirements of store stock, which, on many farms, is a severe tax on the farmer’s financial resources; or (c) The purchase of some improvement in the equipment of the farm, costly enough to disturb the normal farm budget —e.g., a tractor and its complement of tractor-drawn imple- ments (which may possibly run away with £500 or more), the installation of electricity (the cost of which may be swollen by a heavy line charge), a new threshing-mill, bruiser, &c., &c.. r up-to-date milking plant, comprising a milking machine, steriliser, bottling plant, 810. On some types of farms the need for short-term credit facilities is more urgent than on others. The arable farmer, for instance, must wait until his crops are harvested and, assuming a favourable outlet, sold, and until his feeding cattle and sheep (purchased months before) are fat enough for the market. Meantime, his outlay on wages, feeding-stuffs, seeds and manures, and overhead charges (frequently an unex- pectedly heavy charge) continues to mount ; and the financing of the final stages of the productive process and the holding of stocks for sale causes an ever~increasing strain on the farmer’s cash resources; whilst his outlay is continuous, punctuated by marked seasonal ‘ peaks ’ caused, for instance, by the purchase of store stock, his income is slow, intermittent, and uncertain. Similarly, in the case of a hill sheep farmer although the wages and other expenses must be met month by month, all the sales for the whole year are usually com- SHORT-TERM AGRICULTURAL CREDIT. 61 pressed within a short space of time in the autumn, when the draft ewes, store lambs, and wool—the only saleable products—are disposed of. Furthermore, although, as the experience of the past few years has shown, the hill sheep farmer’s costs year by year remain singularly rigid, with a tendency for wages and overheads to rise, his income, on the other hand, shows violent annual fluctuations. Not until after the autumnsales can he hazard even a guess as to whether he is making or losing money. The large dairy farmer alone is in the happy position—if he manages to avoid the heavy in” of disease—of being able to budget on the expectation that his farm income will roughly keep pace with his farm expenditure month by month ; if he is retailing milk he can munt on his daily drawings from his customers; if he sells his milk through the Milk Marketing Board he is assured of his regular monthly milk cheque from them, which in many cases to-day is supplemented by one or more of the substantial bonuses for which milk producers may qualify. He is, at all events, fortunate in having available a steady cash return to meet his current farm and household expenditure. TIDING OVER DIFFICULTIES. it is worthy of note in passing that in the East of Scotland (and quite possibly elsewhere, too) certain practices have gained prevalence which enable an arable farmer to eke out financial resources which do not run to the full stocking, equipping, and working of his farm. For instance, to avoid laying out money on store cattle he may let his cattle-courts in “inter to a large grazier or auctioneer at so much per head per week. A common pre-War figure was 3s. 6d. to 4s. per week for turnips and straw—hardly a remunerative price— although much depended on the arrangement made with regard to the labour in attendance on the stock and on the nature and quantity of the concentrate ration fed by the owner of the cattle. In such cases, however, the Scottish farmer’s traditional pride in his livestock leads him to count the days to the time when he wins through to a status of financial emancipation and can stock up his courts with his own cattle; only occasionally does one find arable farmers resorting to the letting of their cattle-courts solely because they consider the court-feeding of cattle to be unremunerative. Similar ‘short-cuts ’ commonly practised are taking in cattle or scheep for summer grazing or letting turnips for sheep in W111 er. Again, instead of growing potatoes on his own account he may let his potato land to a potato merchant, engaging to do all the man, horse, and/or tractor work (up to but not |
| Title | Transactions of RHASS Volume 1940 - Page 036 |
