Transactions of RHASS Volume 1940 - Page 039
Image details
| Year | 1940 |
|---|---|
| Transcription |
|
| OCR Text |
' mu lIIIIl 66 SHORT-TERM AGRICULTURAL CREDIT. agriculture, and possessing a good knowledge of both the business ability and farming skill of his customers, he probably errs very seldom in his judgments, and acts as a useful sieve with regard to applications made to him for short-term credit. There is, no doubt, a danger attached to these auctioneers’ agreements in that, quite unconsciously, they may enable a farmer to obtain, all told, too much credit from the various sources open to him—La, his banker, his merchants, and his auctioneers; if, for instance, a farm is fully stocked with cattle belonging, in effect, to an auctioneer, a firm of seedsmen or manure merchants seeing these beasts in the farmer’s fields, may, under the impression that they were the farmer’s own cattle, easily over-estimate the soundness of his position and grant him too generous credit facilities. In such cases the merchant has every right to feel aggrieved; but this con- tingency is sometimes avoided by the voluntary interchange of information amongst merchants, &c., regarding their customers’ obligations. If we bear in mind that in addition to calling on the above sources of credit as the need arises the farmer may also be granted a temporary respite by his laird with regard to his half-yearly rent in bad times, there appear to be ample grounds for stating that, taken altogether, our short-term agricultural credit facilities are adequate for the industry; and that although on theoretical grounds they may be open to certain objections, yet on the whole they work reasonably well. Hence, recalling the utter failure of attempts to deal with the problem by legislation in recent years, it is clear that there is no urgent or widespread demand from farmers in this country for the introduction of any elaborate new short-term credit system, or the setting up of imposing credit structures like those in existence in many overseas countries. Moreover, there is always something to be said for the argu- ment that things should never be made too easy for a man taking or running a farm, for “A further qualification for success is to have learnt the value of thrift. A man who has himself saved his money, earned it by the sweat of his brow and made sacrifices to accumulate it, realises its value and makes the best use of it; whereas the man who has it lent, or given, or left him, is more likely to take it for granted.” 1 INTERMEDIATE CREDIT FACILITIES. If there is any major defect in our existing credit facilities it is to be found not in connection with either long-term or short—term credit, but rather with what may be termed intermediate credit, and this therefore merits special con- sideration. For many years, through the Lands Improvement 1 A. G. Ruston quoted by Astor & Rowntree, ‘British Agriculture’ (p. 352). SHORT-TERM AGRICULTURAL CREDIT. 67 Company (incorporated under special Acts of Parliament in 1849), landowners have been able to obtamdoans for the purpose of effecting certain scheduled types of improvements, including :— 1. The erection of farmhouses and buildings (including dairies, Dutch barns, silos, &c.), and structural alterations and additions thereto. The erection of farm-workers’ cottages, or alterations and additions thereto. The installation of electricity, or of a water supply, with the construction of pumps, windmills, wells, reservoirs, &c. . 4. The drainage, or fencing, or warping, or enclosmg of land. 5. The erection of a threshing-mill, or the construction of an engine-house. 6. Afforestation or the making of fruit orchards. 7. The redemption of tithe. to $13 The Company advertises regularly in farming journals and enjoys a good reputation amongst the agricultural community. Its loans must be approved by representatives of the Mimstry (or Department) of Agriculture, after detailed plans and proposals have been received, and the property has been inspected on their behalf. Secured on the rental value of the property concerned, and repayable by equal half-yearly instalments of capital and interest spread over a period not exceeding forty years, the loans have, since 1936, been made at 3} per cent net interest, as against 4% per cent to 4% per cent formerly. For example, Farmer A. (an owner-occupier) takes advantage of the facilities offered by the Company to assist him in financing the installation of a threshing-mill and trusser, which cost him £278, 10s.; it is agreed that he shall repay the loan over a period of twenty years. The Company, after referring to their actuarial tables and com- puting the total amount of interest chargeable before the loan is finally extinguished, assess his yearly contributlon to them at £19, ls. (making £381 in all). By making a half- yearly payment of £9, 10s. 6d. for the next twenty years he wipes out both the capital and interest of the loan w1thout hardly disturbing his normal farm budget at all. All told, the Lands Improvement Company, catering for such specified improvements, has loaned to agriculturists over £15,250,000 during the ninety years of its existence; yet when one thinks of the many thousands of acres of good agricultural land lying undrained, uncultivated, unproductive —as derelict as the scuttled hulk of the Gmf Spec—of the countless farmsteads Where the accommodation and lay—out of the premises are totally unsuitable for modern requirements, and of the many farms Where capital expended on some |
| Title | Transactions of RHASS Volume 1940 - Page 039 |
