Farming update

All known producers (and the odd unknown) gathered together in the Governor’s office to be given the good news. Not only that, but to keep them on sides each producer is also to be given, (presumably to be sold at the official bank rate which will make this equipment the world’s cheapest), two tractors and an electrity generating plant! This startling intervention must be a world first for any Reserve Bank whose mandate normally is limited to monetary policy. Whether this move is really designed to put milk in the supermarkets, or to rescue the Dairy Marketing Board whose supplies were shrinking alarmingly, is in question. There had been a number of survival methods introduced by producers which enabled them to sell their product not just at the producer price, but at the officially sanctioned retail price without incurring the normal costs of packaging and distribution. One of these was to instal refrigerated tanks at major retail outlets where consumers could collect milk decanted into the customers’ own containers. The other was to deliver in bulk to agents in the towns from whom consumers could then collect their orders. These marketing arrangements effectively increased the producers’ incomes by relieving the DMB of theirs. The tractors and generator carrot can easily be turned into a stick to tie recalcitrant producers from straying away from the DMB marketing route until this equipment has been paid for and ownership has definitely passed. The subsidy, unless increased at progressively shorter intervals, will quickly pale into insignificance, but expensive tractors and generators will keep their value for years. At least one producer was unable to extract his monetary subsidy from the Reserve Bank and we are so far unaware of any deliveries of tractors and generating plants. We hope that the Governor has dealt too with the problems of the stock feed industry which at present is largely unable to produce anything with which to feed dairy cattle. WHEAT PAYMENTS There are administrative delays in farmers opening FCA bank accounts in which to deposit the promised forex portion of their wheat payments. They have still not received the local currency portion either. POULTRY Day old chicks are unavailable, and broilers are no longer being produced for the local market as the selling prices allowed are way below cost. The last remaining producers continue with exports in an endeavour to beat the effects of hyper-inflation and bureaucratic interference. Eggs, if you can find them, have passed the million a dozen mark, (billion dollars if you add back the three noughts removed last year).