NZ Debt write off

[BLG]

Another couple of quiet points of difference between 1980s NZ and UK 40 years later:
Technology advancements!

Genetic advancements!

PRIOR WARNING - which NZ farmers didn't really have, other than by watching the annual budgets' decline- on the only TV channel on air at the time..

NZ had only had a relatively short period of specific and direct ag subsidies- which grew hugely over the course of the 70s- eg weed management sub, fert subs etc,,, not perhaps long enough to really become reliant on them?
1973 to 1984 isn't spanning generations.

But possibly the main contrast of all is simpler livestock systems here, and fresher soils, some had only the one dressing of lime+superphosphate by plane while the sub made it economic to do so. Much less adjustment was required to meet the lower cost production models that have always been 'the norm' here.

It really affected those who were spending money they hadn't made, or caught in an expansion phase - expansion that possibly wouldn't have happened without the SMP, due to falling wool prices etc?

But most of the farmers in our local area simply got the plane in and put on fert, helicopter sprayed the gorse, and bought a boat!!
There were 3 boats in our district called "S.M.P."

I remember seeing a boat with that name in our area as well!

Good point you made about ag subsidies been only around for 11yrs which meant it wasn't such an ingrained policy as it is in the rest of the world now.
Also something that is often underestimated is because NZ was/is a young country we don't have that inherit tradition and pressure to do what the previous generation did and thatsone reason so many sheep/beef diversified into dairy, grapes, deer, cropping, kiwifruit, etc, etc.

 

[Kiwi Pete]

I remember seeing a boat with that name in our area as well!

Good point you made about ag subsidies been only around for 11yrs which meant it wasn't such an ingrained policy as it is in the rest of the world now.
Also something that is often underestimated is because NZ was/is a young country we don't have that inherit tradition and pressure to do what the previous generation did and thatsone reason so many sheep/beef diversified into dairy, grapes, deer, cropping, kiwifruit, etc, etc.

Yes, most of my "knowledge" is purely anecdotal, of course.. I was born mid 1980!
However, my uncle and my Dad both filled me in aplenty on what it meant, to them and their neighbours. They hated it.

Horticulture is a great example- it simply wasn't profitable enough, when compared to subsidised sheep and beef!!
How does it compare now?

Dad always felt really sorry for the brits, as he said, it's such an ingrained part of their agriculture, along with regulation and feudal land systems etc etc etc. But he hated SMP and subsidies!!
Other than a couple of helicopter missions and building a fert bin at the end of the airstrip, he didn't change much at all- he knew it was just a temporary crutch to help survive the UK's new love affair with the EEC. And it proved to be so. Both the subs and the love affair

Which is partly why I've kept such a close eye on the rest of the world's ag industries since I've been able to. Far from an expert, but they change everything.
They make the uneconomic look sustainable, and facilitate/encourage unnecessary expenditure.
They promote using the wrong land for the wrong things.
Everyone benefits except the producers.

Look at the US method- it only serves the major players, an amazingly unfair "system".
If it didn't involve so many senators it would be corruption
But that's going way OT.

 

[FonterraFarmer]

Another couple of quiet points of difference between 1980s NZ and UK 40 years later:
Technology advancements!

Genetic advancements!

PRIOR WARNING - which NZ farmers didn't really have, other than by watching the annual budgets' decline- on the only TV channel on air at the time..

NZ had only had a relatively short period of specific and direct ag subsidies- which grew hugely over the course of the 70s- eg weed management sub, fert subs etc,,, not perhaps long enough to really become reliant on them?
1973 to 1984 isn't spanning generations.

But possibly the main contrast of all is simpler livestock systems here, and fresher soils, some had only the one dressing of lime+superphosphate by plane while the sub made it economic to do so. Much less adjustment was required to meet the lower cost production models that have always been 'the norm' here.

It really affected those who were spending money they hadn't made, or caught in an expansion phase - expansion that possibly wouldn't have happened without the SMP, due to falling wool prices etc?

But most of the farmers in our local area simply got the plane in and put on fert, helicopter sprayed the gorse, and bought a boat!!
There were 3 boats in our district called "S.M.P."

Funny that you bring up the subject of "boats", given the flow on effects of rogernomics and deregulation in the 80's and how had it was on rural and agricultural businesses, considering the nearest major town serviced agricultural businesses, was also dependent on large SOE's and had one of the highest rates of unempolyement, I served my apprenticeship at the local car/tractor/farm equipment and marine dealer, now you guess which part of the business probably was responsible for its survival through those years!!!!

 

[Kiwi Pete]

Funny that you bring up the subject of "boats", given the flow on effects of rogernomics and deregulation in the 80's and how had it was on rural and agricultural businesses, considering the nearest major town serviced agricultural businesses, was also dependent on large SOE's and had one of the highest rates of unempolyement, I served my apprenticeship at the local car/tractor/farm equipment and marine dealer, now you guess which part of the business probably was responsible for its survival through those years!!!!

EVERYONE had to have a boat in those days... trouble is, they couldn't afford the fuel to go in it before long
our one wasn't named SMP - "The Dodger" quite fitting really!!
Quite amazing what a decade brings, my sister's are ten years older and have a completely different fiscal policy to myself, possibly due to what they saw as young children?
I am as tight as a sinking swans' arse, whereas they are the ultimate consumers farming is a paid dream holiday to them we still butt heads as to why I'm so stingey.

 

[FonterraFarmer]

EVERYONE had to have a boat in those days... trouble is, they couldn't afford the fuel to go in it before long
our one wasn't named SMP - "The Dodger" quite fitting really!!
Quite amazing what a decade brings, my sister's are ten years older and have a completely different fiscal policy to myself, possibly due to what they saw as young children?
I am as tight as a sinking swans' arse, whereas they are the ultimate consumers farming is a paid dream holiday to them we still butt heads as to why I'm so stingey.

You just have to remember when you run out of petrol with a boat, that you do it near a petrol station
Yes I have, once going down the Waikato river!!!

 

[JD-Kid]

recall farmers getting payed out i think 50 000 to walk in the 1989 dry times govt took the farm and sole it to get some money back
know a few guys in the banking industry said banks could not do that again better t work deals of intrest only etc etc to try and keep some afloat then sell off farms in a controled sale not flooding the market crashing prices
that maybe what the OP is talking about
the 50 K walk deal was just that take yer dog and ute wife and kids and walk off leaveng stock plant etc etc places were in OD with high intrest rates ..

 

[Global ovine]

recall farmers getting payed out i think 50 000 to walk in the 1989 dry times govt took the farm and sole it to get some money back
know a few guys in the banking industry said banks could not do that again better t work deals of intrest only etc etc to try and keep some afloat then sell off farms in a controled sale not flooding the market crashing prices
that maybe what the OP is talking about
the 50 K walk deal was just that take yer dog and ute wife and kids and walk off leaveng stock plant etc etc places were in OD with high intrest rates ..

This occurred in a number of cases after the Rural Support Trust negotiated a deal with the banks and the Gov't to give families in a hopeless situation an "out" with some dignity and not bankruptcy. This was as much a result of severe regional drought in places such as North Otago/South Canterbury where many farms were down to less than 30% of their capital stock, total crop failures, no cash or collateral to get back to normal after the drought broke.
I know of farmers who remained broken after being forced out, but many who took this option rebuilt their lives with some re-entering farming as managers/share milkers to eventually buy their own farms again, or went out of farming and became very successful in other industries.
Timing was the major cause of individuals failure to survive. Far too many very skilled, new entrant young farmers were sacrificed. Those farmers who had been farming for 10-15 years usually had the equity to get through if they cut their expenditure to the bare bones and learn't to farm at the lowest cost, by sourcing their animal genetics that removed most of the variable costs.

 

[glasshouse]

The levying of 22% interest is criminal and was totally unnecessary both in nz and uk

 

[glasshouse]

Uk is still printing money, what happens when that stops?

 

[Global ovine]

The levying of 22% interest is criminal and was totally unnecessary both in nz and uk

No, it was the normal reaction following a period of heavy regulation in a tightly controlled economy by the financiers in a totally free and global market created overnight. It was just unexpected by those who had borrowed and for the length of time it took to correct itself. The sheep industry was the worst affected because it had then been mainly reliant on one market (UK) that was in the process of change (joining the EEC) leaving much production without a viable market.

Quantitative Easing (printing money) has 3 main effects; keeps money moving through the economy, mainly ends up restoring finance houses security and adds to inflationary pressure.
Primary producers enjoy the first effect, are usually oblivious to the wealth of banks, but are the main sector that has to absorb inflation because they are the only link in the supply chain that cannot pass on costs, being price takers. Nations' Central Banks are yet to pay for the cost of all this money printing. Somebody will be wearing this cost in the future unless total financial collapse comes first.

 

[Ysgythan]

Can you find a link for were or who wrote that? Not from somewhere in south west Wales by any chance?

Coincidentally lots of South West Walians are keen rugby fans...

 

[Ysgythan]

No, it was the normal reaction following a period of heavy regulation in a tightly controlled economy by the financiers in a totally free and global market created overnight. It was just unexpected by those who had borrowed and for the length of time it took to correct itself. The sheep industry was the worst affected because it had then been mainly reliant on one market (UK) that was in the process of change (joining the EEC) leaving much production without a viable market.

Quantitative Easing (printing money) has 3 main effects; keeps money moving through the economy, mainly ends up restoring finance houses security and adds to inflationary pressure.
Primary producers enjoy the first effect, are usually oblivious to the wealth of banks, but are the main sector that has to absorb inflation because they are the only link in the supply chain that cannot pass on costs, being price takers. Nations' Central Banks are yet to pay for the cost of all this money printing. Somebody will be wearing this cost in the future unless total financial collapse comes first.

Primary producers and pension funds.

 

[Ysgythan]

Uk is still printing money, what happens when that stops?

An "adjustment".

 

[FonterraFarmer]

Coincidentally lots of South West Walians are keen rugby fans...

Walians much like there rugby, need a Waikato bloke to tell them what to do.

 

[Ysgythan]

Walians much like there rugby, need a Waikato bloke to tell them what to do.

It's a two way street. He's learning. We taught your current coach a lot as well. He had to use a Lyn Jones Neath RFC line out move to win the 2011 World Cup and get the monkey off your back.

 

[FonterraFarmer]

It's a two way street. He's learning. We taught your current coach a lot as well. He had to use a Lyn Jones Neath RFC line out move to win the 2011 World Cup and get the monkey off your back.

I never watch any rugby anyway

 

[glasshouse]

No, it was the normal reaction following a period of heavy regulation in a tightly controlled economy by the financiers in a totally free and global market created overnight. It was just unexpected by those who had borrowed and for the length of time it took to correct itself. The sheep industry was the worst affected because it had then been mainly reliant on one market (UK) that was in the process of change (joining the EEC) leaving much production without a viable market.

Quantitative Easing (printing money) has 3 main effects; keeps money moving through the economy, mainly ends up restoring finance houses security and adds to inflationary pressure.
Primary producers enjoy the first effect, are usually oblivious to the wealth of banks, but are the main sector that has to absorb inflation because they are the only link in the supply chain that cannot pass on costs, being price takers. Nations' Central Banks are yet to pay for the cost of all this money printing. Somebody will be wearing this cost in the future unless total financial collapse comes first.

Both the 22% interest and the qe are specifically put in place by the rich elite tp make themselves richer.
22% interest rates made a lot of the into the super wealthy., and refuced many borrowers to penury
Qe is the same