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The challenges of farming in Mid-Canterbury

An interview with Ron and Judith Armstrong

Part 3

Improvements well established, but problems insuperable - expensive electricity and labour costs and sudden government policy changes

Dorothy - 13/10/03

The dry conditions in the land between Rakaia and the sea made farming very difficult. The light topsoil would be blown away in the strong winds. However, talking about the need did not result in rapid action. Proposals for border dyking were not accepted and low-interest loans for irrigation from the Rural Bank did not last.

In the mid-fifties a Government scheme was proposed to bring water from the Rakaia River near Barrhill to just west of the Rakaia township. Border dyking was the proposed method to irrigate farmers' land from Rakaia to the sea. If the farmers had voted for the scheme every farmer would have had to develop his own layout and border dyking. Only landholders had a vote and the scheme was voted out.

In later years the Rural Bank lent money to farmers at low interest for installing irrigation. The Armstrongs first used a Big Gun and then installed three Rotorainers on their farm and one on their son's farm.

Water for the irrigation came from underground wells. Twelve inch pipes had to driven 180 feet into the ground. Where the farms were in close proximity to the sea the water table was higher than further inland where the farmers had to drill down to 500 feet. They needed 600 gallons of water a minute to be of worthwhile benefit. The twelve inch pipe formed a casing to carry the pump.

Pipe being driven for installation of the pump
Pipe being driven for installation of the pump
Four drillings produced three wells. In the search for water farmers used water diviners.

Impact of irrigation
Irrigation made the greatest impact on change to the policy of farming. The Rotorainers had to be shifted every twenty four hours and each shift took two hours. In this aspect farming was more labour intensive. However the irrigation meant that there was more green feed which is better for the stock than too much dry feed. This meant a reduction in labour as there was less feeding out and hay making.

A Rotorainer in action
A Rotorainer in action
Effect of rising electricity costs
In an average year the power bill for the irrigation would be $40,000; in a dry year $60,000. There was a subsidy to assist farmers, but with the rising cost of electricity this expense was still a major burden. The returns from meat and wool were not sufficient to meet the costs. Because the bills for irrigation were so high more and more of the land was used for cropping. More cropping meant more farm machinery. It was a vicious circle financially.

Financial pressures
By 1985 the land, machinery and stock were valued at a capital value of around $2,000,000. For a project of the same size in the city there would have been several staff, but on the farm finance didn't allow for more than Ron and one staff member to do all the varied facets of the work.

The Armstrongs' farm from the air
The Armstrongs' farm from the air
Production by squeeze
Especially once irrigation was installed in 1972 theirs was a high cost form of farming. The government policy was such that it was 'production by squeeze'. Everyone was being asked to produce more just to stand still. They tried to maintain their income by increased production. Over the years the number of sheep had been increased from 500 to 3000. At the same time the costs were constantly increasing, especially in an economy where inflation was at 18%. It wasn't possible to overtake the costs with production. There is a limit to what can be produced on one piece of land. They were just standing still in terms of money.

Farm subsidies
The Rt. Hon Robert Muldoon, Prime Minister in the National Government from 1975 to 1984, introduced subsidies for farmers to enable them to compete pricewise with the British farmers who were heavily government-subsidised on their meat and wool. This was possible in the United Kingdom because there was a large industrial structure.

In New Zealand one year farmers got a one-off payment on lamb and cattle, $1.00 per lamb and $6.00 per cattle beast. Subsidies were given on sprays and fertilisers. In Ron's view subsidies should be accompanied by price fixing of the product being subsidised. As subsidies were applied to sprays and fertilisers the price went up so steeply that the farmers were little better off.

New Zealand subsidies did not compare with the subsidies in the United Kingdom which applied to calves, lambs, machinery and farm buildings, and even on land left out of production, under the law which required that a fixed percentage of the farm was to be left fallow.

Changes in government policy
Three months before the Labour government was elected in 1984 the Armstrongs bought a second farm for their son. The home farm provided part security for the purchase.

After the Labour Government was elected mortgage interest rates went from 11% on first mortgages and 14% on second mortgages to 22% at one jump. The subsidies for farmers were considered to be too great a burden on the New Zealand taxpayer and in 1984 Roger Douglas abruptly removed them at short notice. Gradual phasing out of subsidies and gradual changes in mortgage rates would have give the farmers a chance to adjust and change their plans. Sudden changes left no choices.

The Rural Bank
The Rural Bank was the Government lending agency and had lent freely, perhaps too freely, at low interest rates. With the change of Government policy their interest rates rose dramatically in keeping with the bank rates of the time.

Distressing impact on the Armstrongs and many other farmers
The result of the changes in Government policy was that the Armstrongs had to sell both of the farms and retire to the town. Their sons had to find work elsewhere and the family's connection with the land to which they had devoted so much effort was over. They emphasised that they were just one family of many hit by the Government's abrupt change of policy. Because of the financial pressures on farmers sales were forced throughout the country. One third of the Dorie farmers had to leave their farms.

Ron and Judith's view
As Ron and Judith expressed it, "The land is always more important than the people who use it. It will always be there, but we are just the temporary tenants."

Visit the rest of the articles in this series:
Part 1: An interview with Ron and Judith Armstrong - Farm training, farm purchase, and marriage
Part 2: An interview with Ron and Judith Armstrong - Problems developing a neglected property - too little money and too much work
Part 4: Farming changes in Dorie since 1990 - problems with water, new dairy farms

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