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• 4.2.1 Source of Income
• 4.2.2 Principal Operator
• 4.2.3 Assets and Debts
• 4.2.4 Farm Status
• 4.2.6 Farm ownership

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4.2 The Farm Business

4.2.1 Source of Income

On the majority of farms (78%), livestock provided the major source of income. Grain, seed and dairying accounted for a further 12%, while combinations of livestock, grain and seed provided the major source of income for the final 10% of the farm families in the study.

4.2.2 Principal Operator

The principal operator is the person who was considered to be responsible for running the farm. When asked who was the principal operator, over half of the retiring generation men (57%) identified themselves, compared to 80% in the Generations Alberta study. However, 50 % of the younger men also said they were the principal operator. Under 2% of the women of both generations named themselves as principal operators in comparison to the Generations Alberta study where 33 % of the women from both generations named themselves as principal operators.

It appears that in this study only men view themselves as principal operators. The fact that about half of retiring generation men and receiving generation men named themselves as principal operators, suggests that families on these farms view the headship as being in transition between father and son. In the Alberta study, retiring men and women were more likely to share the identity of principal operator.

4.2.3 Assets and Debts

Table 5 shows assets and debts of farms in the sample. The major classification (34%) held assets that ranged from $750,001 to $1,000,000. Against this 34% had debt levels that ranged from $100,000 to $250,000. Only 1 farm had a debt level of between $750,001 and $1,000,000. On the other hand seven farms (11%) were debt free. The New Zealand Meat and Wool Boards' Economic Service (1991, p 52) shows weighted average assets of $868,375 for a sample of 535 sheep and beef farms. This is in line with the asset levels listed by the farmers in this study. Neither was there any great variance between the weighted average liabilities of $190,008 in the Economic Service's sample and those debt levels accounted by the generational farmers. (The figures supplied by the farm families in this study were for the 1991-92 financial year.)

There are many ways of determining whether the figures in Table 5 identify which are viable farms. Since we were interested in how generations in farm families decide whether the farm will stay in the family, respondents were asked whether, under the current economic conditions, their farm was large enough to support both retiring and receiving generation families.

Table 5

Farm Assets and Debts¹

¹ According to the retiring generation male

The greater percentage of the women and men in both generations believed that the operation was large enough, but it was the men of both generations who were most optimistic about the farm operation being sufficient to support them and their families. However, a third of all the respondents qualified their agreement giving reasons why in their terms the farm operation was 'barely' able to support them. Thirteen percent of all the respondents believed the farm operation was not large enough to support both generations. Nevertheless all members of the receiving generation expected to remain on the farm.

4.2.4 Farm Status

We asked all the respondents to tell us how they gauge their involvement in the business by classifying themselves into one of several categories that ranged from full-time farmer to retiree. Table 6 shows how each family member classified his/her involvement on the farm. Traditional gender differences are evident. Most men classified themselves as full-time farmers, while the largest group of women (55%) in each generation described themselves as full-time homemakers. In the Generations Alberta study, 16% of retiring generation women and 11 % of receiving generation women classified themselves as full-time farmers or full-time farmers and homemakers. Fewer New Zealand women saw themselves as full-time farmers or full-time farmers and homemakers; 8 % and 4% respectively. No men in either study described themselves as full-time homemakers.

Table 6

Farm Status

	Retiring Generation				Receiving Generation
	Men		Women		Men		Women
	No.	%	No.	%	No.	%	No.	%
Full-time farmer	52	73	2	3	68	94	0	0
Part-time farmer	10	14	4	6	3	4	6	12
Full-time homemaker	0	0	36	55	0	0	28	55
Homemaker and full-time farmer	0	0	3	5	0	0	2	4
Homemaker and part-time farmer	0	0	20	30	0	0	15	29
Retired	3	4	0	0	0	0	0	0
Part-time farmer and retired	6	10	1	2	0	0	0	0

Fourteen percent of retiring generation men said they were retired or farming part time and retired. Only one retiring generation women described herself as retired. This is perhaps not surprising as 90% of the retiring generation women classified themselves as having a homemaker role and homemakers by necessity don't retire.

There is little indication from this data that major role changes are taking place. Fairweather (1992) has argued that during this time of structural change, some farm families had adjusted to financial pressure through taking off-farm jobs. Others moved to a greater sharing of male and female roles while others maintained their prior division of labour. Our findings suggest that for the families in this study the division of labour has been maintained.

In a study of North Island farm women Shaw (1993) found that 80% of the women in her survey described themselves as farmers. Of Shaw's women, 83% identified their on-farm work as a major reason for their farmer status. Shaw was especially interested in farm women's identities and asked a number of questions concerning why they saw themselves as farmers. One difference between her findings (that most women see themselves as farmers) and our findings (that most see themselves as homemakers) was that Shaw did not ask women to choose either a farmer or homemaker status. It seems likely that many farm women identify themselves with both roles.

In our previous research on farm succession in New Zealand (Keating & Little, 1991), we found that the farm son, regardless of his farm experience or his stake in the farm or his place in the process of succession, was always deemed to be a farmer. By contrast the farm woman only achieved farmer status after a series of apprenticeships through various levels of farm tasks and after successfully proving her farming ability. The difference is stark but simple - a woman must prove herself, a man need not, to deserve the title "farmer".

4.2.5 Off-farm Work.

While off-farm employment is one method of bringing income into a farm that cannot support all of its members, our findings show that few of the respondents had oft-farm jobs (Table 7). As might be expected, the number of retiring generation men and women working off farm was small; 18% of retiring generation men and 19% of retiring generation women having off-farm work. Receiving generation men (26%) were more likely than their parents to have an off-farm job. It was the receiving generation women (49%) who were most likely to have off-farm jobs. The number of women and men in this generation working off-farm is similar to the same generation identified in the Generations Alberta study (Keating & Munro, 1991). Here, 51% of the receiving generation women were working in either part-time or full-time jobs off the farm while 37% of the receiving generation men were similarly employed. Both studies found that a higher proportion of the women than the men in the receiving generation were employed off the farm.

Table 7

Off-Farm Employment Status

Le Heron et al (1990) identified the adverse farming situation in New Zealand in the 1980's as constituting conditions suitable for the appearance or upsurge in pluriactivity amongst farm families. The study cites Pomeroy (1988) who found that about 17% of the farm households she interviewed had a male household member engaged in off-farm work. A little under half (49%) of the sheep and beef farm households in the Le Heron study reported off-farm work activity. Our breakdown by family member shows diversity among family members in terms of who is likely to take off-farm work.

One of the assumptions concerning off-farm jobs is that they are taken to help support the farm business. However, when we asked respondents in this study to tell us the reasons for their off-farm jobs, few cited farm finances. The single reason for off-farm work most cited by receiving generation men was 'social'. They enjoyed off-farm employment and the people with whom they worked; they had skills that could best be used off the farm and they experienced work fulfilment. The greater percentage of receiving generation women, on the other hand, cited their reason for off-farm work as being, 'able to buy more things for the house, the family and myself'. Thirty one percent, the greatest proportion of retiring generation men, gave furthering their careers as their reason for off-farm work activity. Like their sons, retiring generation women sought off-farm work for social reasons. Although income from their jobs may have been beneficial to the farm, farm finances were not the major reason for taking or keeping their off-farm jobs.

Previous work by Keating and Munro (1989) shows that Canadian farm women work off farm because their jobs provide them with a source of identity and satisfaction separate from the farm. Rivers (1992) also suggests that those women who live on farms but work in a local settlement or town are not necessarily doing off-farm work to support the farm and family but perhaps are working in their chosen field of interest or career. This may account for the fact that many people remain in jobs that have low off-farm wages. From the Generations Alberta Study (Keating & Munro, 1991), it is apparent that off-farm jobs provide supplementary income only, as the majority of family members earned $CAN10,000 ($NZ13,240 approximately) per year or less. Similarly the findings from this research (Table 8) show that the majority of members of both the retiring and the receiving generation earned $NZ10,000 or less from off-farm employment.

Table 8

Annual Income from Off-Farm Employment

	Retiring Generation				Receiving Generation
	Men		Women		Men		Women
	No.	%	No.	%	No.	%	No.	%
No off-farm income	59	84	59	86	55	76	31	61
$10,000 or less	5	7	6	9	9	13	9	18
$10,001 - 20,000	3	4	2	3	4	6	5	10
$20,001 - 30,000	1	1	1	1	2	3	3	6
$30,001 - 40,000	2	3	1	1	0	0	3	6
$40,001 +	0	0	0	0	2	3	0	0

The off-farm work activities of New Zealand farm families are not well documented. A comprehensive study of off-farm work is currently being carried out amongst South Island farm families by Taylor and McCrostie Little (1994).

4.2.6 Farm ownership

Table 9 shows the type of ownership arrangement of farms in the study according to the retiring generation male. Most families were involved in partnerships that were either formal and written (60%) or informal and unwritten (25%). Only 16% of farms in this study were classified as sole proprietorships, (as were a similar percentage, 15%, of the farms in the Alberta study). However, this figure is low in comparison with the New Zealand national average of 47% in individual ownership (Fairweather, 1992). Private Registered Companies represented 7% of family business arrangements, close to the national average of 6.9%. The popularity of partnership arrangements, either written or unwritten, may represent farms where the business structure is poised to accommodate transfer. Forty-three percent of the partnerships within the business arrangements are between the retiring generation men and their son or sons and a further 38% are between retiring men and women and their children. These 'partnerships' may also represent more enduring business structures that are seen only in farms where family transfer is a goal.

Table 9

Land Ownership Arrangement¹

¹According to retiring generation male

As indicated in Table 10, retiring generation men and women and receiving generation men were the primary owners of their farms. When women were included in ownership, it was always with a man (men). Virtually no women in the receiving generation were included in ownership of the farm When it comes to ownership of the family farm the daughter-in-law appears not to be counted as family. Only 4% of receiving men were primary owners. It is apparent that during the process of retirement, few receiving men are sole proprietors.

Table 10

Owners of the Farm'

	No.	%
Retiring man 2	5	7
Retiring woman	0	0
Retiring couple 3	13	18
Retiring man and son(s) 4	22	31
Retiring woman and son(s)	1	1
Retiring couple and children	5	7
Retiring couple and son(s) 5	19	27
Retiring couple and daughters(s)	0	0
Son(s)	3	4
Daughter(s)	0	0
Son and daughter-in-law	1	1
Family trust	3	4

¹ According to the retiring generation male

² Including one farm owned by PM and his brother and one by PM and a family trust

³ Including one farm owned by PM, PU and PM's brother and one farm by PM, PU and a family trust

⁴ Including one farm owned by PM, CM and a family trust

⁵ Including two farms owned by PM, PU, CM and a family trust

Table 11 shows that satisfaction with ownership arrangements was high among the majority of participants. However, retiring generation men were more likely to be highly satisfied with the arrangement than any other family members. In general, higher proportions of retiring generation women and men were very satisfied with ownership arrangements than were receiving generation women and men. Daughters-in-law were least satisfied. Nonetheless, few respondents were willing to state that the ownership arrangements were a disaster.

Table 11

How Well does the Ownership Arrangement Work?

				All right Most
	Very Well			of the Time		Not Very Well		It's a Disaster
	No.		%	No.	%	No.	%	No.	%
Retiring male	58		82	12	17	0	0	1	1
Retiring female	53		78	11	16	4	6	0	0
Receiving male	50		69	21	29	1	1	0	0
Receiving female	30		61	17	35	1	2	1	2

Table 12 provides a more detailed look at ownership of land, livestock and machinery of women and men in both generations. Few men in either generation are sole owners. However, slightly more receiving men own all of the assets, indicating that many of these families are still in the early stages of transfer. Only one women owned more than half of the business assets. The majority of receiving women owned no land, livestock or machinery, while most retiring women owned some land. It seems that women in the retiring generation have never been as fully integrated into the asset ownership as men.

Family members were asked whether they were currently expanding, reducing or maintaining the size of their farms. Approximately 20% of retiring generation men said they were expanding their farms, but the majority (80%) said that they were going to maintain their present farm size. Only 1% reported reducing their farms. These figures are in sharp contrast to those of the Generations Alberta study in which 40% of the farm families were planning to expand their farms. Changes in government policy with respect to support of agriculture may have made respondents more cautious about expanding than their Canadian counterparts. Among retiring generation men who were expanding their farms, buying land and livestock was the most popular choice. Receiving generation men were most likely to be leasing land.

Table 12

Ownership of Land. Machinery, Stock

Retiring Generation

	Men						Women
% Asset	Land		Livestock		Machinery		Land		Livestock		Machinery
Owned	No.	%	No.	%	No.	%	No.	%	No.	%	No.	%
0	8	11	12	19	9	13	22	41	25	49	27	55
1-49	38	54	28	45	22	31	25	46	17	33	15	31
50	12	17	17	27	21	29	6	11	6	12	7	14
51-99	9	13	1	2	13	18	0	0	1	2	0	0
100	3	4	4	6	6	8	1	2	2	4	0	0

Receiving Generation

	Men						Women
% Asset	Land		Livestock		Machinery		Land		Livestock		Machinery
Owned	No.	%	No.	%	No.	%	No.	%	No.	%	No.	%
0	15	23	10	19	14	20	33	89	32	70	33	72
1-49	28	44	28	54	31	45	3	8	1	2	1	2
50	12	19	2	4	16	23	1	2	3	7	2	4
51-99	2	3	3	6	0	0	0	0	0	0	0	0
100	7	11	9	17	8	12	0	0	0	0	0	0

Contact for Enquiries

Rural Affairs Coordinator
Sector Performance Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND

Phone: +64 4 894 0675
Fax: +64 4 4 894 0745
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