7 - The Issues
7.1 Productivity
The general conclusion from the reports and other sources is that overall productivity from the primary sector is likely to remain relatively stable in the foreseeable future. There will be changes in production from each sector as land use changes, for example, production from horticulture and forestry is likely to increase and from sheep, meat and wool to decrease. The impression given in the reports is that while there have been negative factors in relation to farm production, there have also been sufficient positive influences to maintain productivity. Landuse changes are trending towards more intensive production sectors and farmers are increasing their productivity. Farmers are basically price takers and often they see their best defence against falling margins or prices is to increase productivity. The high proportion of relatively fixed costs, and lower costs incurred directly per unit of production, means the marginal cost of additional production can be modest and achievable. Landuse and farmer behaviour (major indicators of productivity) are discussed separately.
Land Use
In 1994 which is about the time when many of the reports were prepared, the income from agriculture and forestry was about $12.8 billion; 64% of the total New Zealand exports of $20 billion.
The largest single category of exports was dairy products, $3.4 billion, followed by meat products $2.8 billion, and forestry $2.5 billion, horticulture exports $1.3 billion, and wool $1 billion. Combining some of the major export commodities and relating these to farmed areas, provides the table opposite
The ratio is income divided by the percentage of farmed land area and provides an indication of the export earning intensity or relative export income per unit of land area for each sector. This index is crude in that it makes no allowance for the effect of the maturity of the forestry estate and aggregates all meat and fibre into the largest group and land occupier. However, the higher earning intensity for dairy, forestry and especially horticulture is well illustrated by their higher ratios. The potential for expansion of those sectors without significantly reducing meat and fibre output is demonstrated by these ratios. For example, increasing horticultural export income threefold to about $4 billion would only increase the land use from 1% to 3% of farmed area.
Land use changes are of course greatly affected by the versatility of land for difference uses. Commonly only the most versatile land in limited climatic zones is suitable for the most intensive landuses. Similarly, modification to land to improve its suitability for a more intensive use can only make small scale changes such as contouring land to reduce slope.
Land use changes will often cause a temporary drop in production during the establishment phase. For example most perennial horticultural crops take 3-5 years to start producing and 7-10 years to reach full production. Increasing forestry will also cause this due to its long rotation times and ability to advance or defer harvest depending on market conditions near the forests' harvestable age.
Sector |
Export Earnings ($ Billion) |
Farm Area % |
Ratio Export Earnings to % Farmed Area |
Pastroral, sheep, beef & others |
5.2 | 73 | 72 |
Dairy |
3.4 | 11 | 312 |
Horticultural |
1.3 | 1 | 1295 |
Other |
0.4 | ||
Forestry |
2.5 | 12 | 204 |
Total |
12.8 | 97% |
Source: Statistics New Zealand Sonza
Other information which supports the contention that productivity, particularly from livestock industries, is likely to remain reasonably stable is obtained from Statistics New Zealand and MAF estimates and forecasts. Graph 1 on the following page is taken from a table showing trends in land use in millions of hectares from 1990 to 2002. It shows total land area used for grazing declining less than 2% from 8.97 million hectares to 8.83 million hectares, a drop of 0.14 million hectares. At the same time the area in forestry increases significantly by 0.68 million hectares (52%) from 1.3 million hectares to 1.98 million hectares. This suggests that at least some of the land recently planted in forestry is likely to have been converted from grazing which is consistent with field observation in recent years. The graph also suggests that many of the most significant landuse changes have already occurred, such as the main decline in sheep farming area, and that recent and projected changes are less marked.
Graph 2 below illustrates estimated and forecast livestock units from 1990 to 2002. It shows total livestock units declining 3% from about 99.2 million to 96.4 million. During this period there is a decline in sheep numbers, beef numbers remain relatively steady while dairy and deer numbers increase significantly.
Sources: Statistics NZ and MAF estimates and forecasts
Much of this change has already occurred, particularly the decline in sheep livestock units and most of the increase in the dairy units.
Sources: Statistics NZ and MAF estimates and forecasts
Graph 3, which illustrates apple and kiwifruit production from the period 1990 to 2002, shows apples estimated to increase significantly from just under 400,000 tonnes in 1992, to about 600,000 tonnes in the year 2002, roughly a 50% increase much of which will be due to maturity of existing plantings. Kiwifruit production on the other hand is estimated to remain relatively constant at around about 200,000 tonnes during the same period although some fluctuations will occur due to new variety establishment in the late 1990s.
Farm size is changing. A number of reports refer to increasing farm size and scale of operations (e.g., C, p34) whether through land purchase or lease. However, while average farm size is increasing, farm size is also polarising between larger operations and smaller, intensive use or part time holdings (Sandrey & Reynolds, 1990). Subdividing farm land into one or more smaller blocks for sale has been an important part of farmers' capital restructuring and of intensification of land use.
Sources: Statistics NZ and MAF estimates and forecasts
Farmer Behaviour
Farmers in the past have shown a capacity to adjust to change and continue to farm even when conditions have looked bleak for their sectors. They have usually done this by improving efficiency, reducing costs, reducing borrowing levels, diversification and obtaining off- farm work. Sometimes they have adjusted by changing their farm size, either a reduction by selling part of their operation, or increasing it through leasing or buying additional land. The net effect has been that productivity has not necessarily been affected when the situation has looked bad for their particular business. Adjustments have enabled most farmers to survive. According to Federated Farmers in 1995, only 800 farmers, which is 1% of the total number of farms, faced forced sales (S8, p7). Similarly, the change in ownership of kiwifruit orchards during difficult times in the late 1980s and early 1990s was much more orderly than predicted (R Underwood, pers comm) and most of the productive base was retained. Also, failed syndicate orchards in Central Otago continued in production after purchase by existing orchardists (C, p34). These orchards led to new variety development and in increase in total planted area in the region.
The changed scale of production illustrates how farmers have adapted to a changing scene and continue to maintain overall production. Maintaining production often means increasing the intensity and complexity of production and requires a greater application of technology and managerial skills as described by farmers in the Tuatapere study (D, App8, p8-10). Evidence suggests that farmers have been able to adapt to the new requirements in the interests of maintaining productivity and their income levels.
A quote from the former New Zealand Herald Agricultural Editor sums up farmer behaviour as it relates to production "[Farmers'] strength is in dealing with adversity and that is something few if any sectors could better. A drop in international prices for their milk or meat acts as a spur for them to produce. Flood and drought only serve to make them resolve to be better prepared next time".... (Christian, 1999, copy in Appendix II)
In the East Coast study the majority of farmers considered that their farms were achieving between 60% and 80% of the gross potential income. Presumably this income estimate was related back to production. They also suggested that they could achieve 100% of their potential gross income production without damaging the environment (S6, p31).
There is no doubt that since 1985, profitability, particularly on sheep and beef farms, has declined and this is illustrated in an example showing a 69% decline in before tax profit in constant dollar terms on these farms from $61,000 in 1974 to 1984, to $18,800 in the period 1991 to 1992 (S8, p5). In spite of this massive drop, land use area did not decline and stock units only declined by about 9% which again illustrates the resilience and the capability of farm businesses to continue operating under adverse conditions.
The Clutha report highlights farmers' views on viability before and after 1986. Farmer responses to their viability prospects showed 32% considering prospects better, 26% considering prospects the same and 42% considering them to be worse (S9, p86).
The possibility of increased levels of organic farming may alter production patterns in New Zealand as production levels under increased organic farming are likely to be lower. However, incomes derived from organic production may be the same as or greater than previous levels. Yield fluctuations between seasons may increase with organic production as there are fewer tools to use. For example, organic kiwifruit appeared to be more affected by the poor budbreak in the spring of 1998 because organic growers do not use a budbreaking chemical.
7.2 Sector
The social and community issues discussed in the reports reviewed are quite closely related to land uses and to economic circumstances in the dominant land uses at the time around the study period. For example, the most negative study was the Rangitikei study which was dealing with farming families on land being used for sheep and beef farming that was also not very versatile for other land uses, apart from some forestry. There is an interaction between the land form and the sector which is described well for the local area of the Roxburgh Teviot Valley report. Those sectors with (generally pastoral) hill country land not well suited to other uses are more likely to suffer a decline in productivity because of the limited option for diversification. The communities with a more homogenous primary sector are more vulnerable to the fortunes of their dominant sector.
The farmer confidence graphs following (from MAF Farm Monitoring Reports) show fluctuations in confidence for each major sector on a scale from 1 to a maximum of 5. They do not record confidence levels for forestry, or deer nor for smaller horticultural crops like vegetables, grapes, avocados and stonefruit.
The graphs show the same pattern of confidence for both sheep and beef farmers of declining confidence since 1994. The sheep and beef sectors are both large and more readily interchangeable options for the same land, so have a significant effect on overall farmer confidence and when both sectors are low in confidence a compounding effect can be expected. On the other hand confidence levels for kiwifruit growers show increasing confidence since 1993.
7.3 Adoption of New Technology
Farmers have consistently adopted new methods including new technology to help them keep up with the cost price squeeze. These reports show a significant amount of new technology has been adopted by farmers.
For the farm, priorities were labour saving, cost saving and productivity enhancing technology. Sustainable technologies were most favoured where they helped solve a problem, such as increasing drench resistance, or resulted in lower production costs, or where adoption was supported by incentives or cost-sharing.
Very little comment is contained in any of the reports on market based impetus or incentives for introducing sustainable technologies.
Labour saving technology, which has proved very beneficial both for the farming enterprise and in the home. Farmers identified a variety of labour saving technologies. These ranged from traditional electric fences to farm bikes, new farm machinery, computers, and round hay bales to radio telephone systems and digital scales. The pursuit of labour saving techniques saw respondents fine tuning their farm practices, improving planning and time management, upgrading the design of their paddocks and access ways and changing their breed and stock types. One farmer stated that he was able to replace a labour unit by using a four wheeler bike (S4, p25).
In the home significant labour saving technology was also to be found. Respondents from many of the homes in one study reported on items of new technology. These included microwaves, dish washers and automatic washing machines, and added to the list were more unusual domestic items such as internal vacuum systems, bread makers and child monitors. These items were all noted as making a difference to the household labour and freeing up domestic time for farm, off-farm, alternative enterprise and community work (S3, p88). New technology in the home is assisting households, and particularly women, who still take most responsibility for domestic work, to cope with the multiple roles.
In recent times one of the most important areas of new technology has been information and communication technology such as faxes, cellphones, cordless phones, answer phones and computers. These facilities are being employed in administrative activities to complete such activities as banking, information searches and sourcing of agricultural inputs for both business and household purposes. Consequences of these developments include the further uncoupling of agricultural production from locally based services such as banks, advisory services and mercantile firms (C, p28).
Technology which relates to sustainable practices has also been used to a greater extent by farmers. One report cites a large increase in the use of synthetic pyrethroid chemicals with a corresponding drop in the use of the more toxic organophosphates (S6, p26). The same report showed a very significant uptake of pregnancy scanning and faecal egg counts by farmers in recent years. In relation to sustainable farming practices, one of the constraints listed was the additional work required in excess of available time (S5, p13). This suggests that although farm production may continue at expected or similar levels, the sustainability aspect of it is considered a low priority in tough times unless it also fulfills a production enhancing or cost-saving need, is cost-neutral, or provides a premium return.
Sheep farmers' experience of drench resistance problems provides an example of adopting a more sustainable technology. Nearly one-fifth of farmers reported a stock resistance problem with white drenches while only 6% of farmers faced a resistance problem with the clear drenches. The most common means of managing drench resistance was to alternate drench types between seasons, followed by: grazing management of spoilt pastures; increasing the proportion of cattle: and drenching on the basis of faecal egg counts (S5, p26).
Climatic factors is also an important issue for farming, and any ways in which the impact of climate or the adverse impact of climate can be mitigated are likely to be positive for farmers. Irrigation was described as being responsible for a changed outlook on farming for farmers in the Canterbury area (S4, p24). The adoption of irrigation in dairy farming reduces fluctuations in production caused by climate. Use of budbreak-enhancing chemicals, widespread since 1990, has been significant for kiwifruit growers.
Exposure to new technology is most strongly influenced by written information, especially farming journals (S5, p27; S6, p4,34; S10, p12-15). Focus or monitor farms and discussion groups are also an important influence on adoption of farming technologies. However, farmers and growers do report difficulty accessing research, market and production information at a reasonable time and cost (S10, p24; C, p29; S5, p20 ).
Maintaining or improving soil fertility was given strong support by farmers in one report. They basically suggested that they intended to apply the same, or more, basic elemental fertiliser in the future. Overall 80% indicated that they would do soil test s before deciding on their fertiliser programme. They were conscious of using and funding fertiliser wisely. Fertiliser is a major investment for most farmers (S6, p27 & 28). Historically, dropping fertiliser inputs has been an early response to poor profitability but these reports (S5, p21) suggest retaining near maintenance fertiliser inputs is a priority to maintain production. Fertiliser industry representatives back up this change in behaviour. They consider farmers are now more likely to reduce or delay fertiliser application rather than omit it due to the long time it took to recover production levels following skipped fertiliser applications in the mid 1980s (Dave Hurst, pers comm).
Adoption of organic farming presents some interesting examples of development in clusters and the significant influence of localised support during the adoption process. For example, the two biggest organic production sectors are organic process vegetables and organically grown kiwifruit. Organic vegetable production is centred in Canterbury and is very closely associated with Heinz-Watties, and the area's physical attributes (S10, p5,6). Development of organic kiwifruit in the Bay of Plenty is strongly associated with a handful of local packhouses. For example, 75% of growers in one packhouse produce organically (BOP Times, 11/3/99) but only about 2% of total kiwifruit produced in New Zealand is grown organically.
Lack of a domestic market and difficulty accessing export meat markets are also problems idenified as barriers to adoption of organic production. (S10, p20-24; BOP Times, 21.1.99). Organic growers who have a philosophical basis to their growing methods also have an issue with "pragmatic" organic growers inspired by price premiums (S10, p10).
7.4 Off-farm Employment
Off-farm employment has played an important part in maintaining farming business viability and living standards of farming families over recent years in New Zealand. Many references to off-farm employment or other business enterprises are made in the reports. Off-farm income is now an entrenched part of farm family incomes and work patterns. The extent of off-farm work is discussed in many of the reports and its occurrence ranges from about 33% to 73% of the farms surveyed (D, p5; S1, p56; S3, p61; S4, p5; S5, p28). There seems to be no doubt that the viability of farms in the future will be as reliant on off-farm employment as they have been in the recent past.
Farm size and farming sector also has an influence with more smaller farms and particular sectors earning off-farm income.
Farmers considered off-farm employment to be part of the household requirement to meet mortgage obligations, provide cash flow for farming activities and provide for family living expenses and education costs (S5, summ. + others).
In 1995 MAF Policy published a survey of off-farm income for the 1992/93 financial year and found that working off-farm is common for all farm types. Kiwifruit orchards had the highest occurrence with 65% of kiwifruit orchards reporting some off-farm income. For the other farm types this was 53% for cropping farms, 51% for pipfruit orchards, 45% for dairy farms and 41% for Sheep and beef farms. Most of these farms considered their off-farm income important or essential for the household and/or for their farm business. (Rhodes and Journeaux, 1995, pl; and in S8, p10).
The MAF survey was at a time of low profitability in the kiwifruit industry. Now kiwifruit profitability is much improved, off-farm income is less significant for the orchard survival but is a continuing strategy (R Underwood, pers comm).
Farm size has an influence on off-farm work with smaller farms being significantly more likely to report off-farm income (Rhodes and Journeaux, 1995, p1). This is consistent with the findings in the reviewed study S5. In this study, even though the percentage of farmers on smaller farms working off the properties were higher, 54% of those on larger units and 39% of dairy farmers had at least one member working off the farm. The contribution of off-farm employment in the surveyed households was lowest for dairy farms at $28,652, then $33,792 for large units, $54,312 for smaller units and highest at $60,400 for hobby farms (S5, p28). Other studies report a wide range of income earned from off-farm work which was reported as between $10,000 and $25,000 (S1, p56), and up to $44,000 (S4, p5).
The approximate mean number of hours of off-farm work for those involved was 24 hours per week (D, p5). Farm work was maintained by working very long hours in total and skipping some of the small jobs as evidenced by references to the "squeaking gate" (S3, p96). Previous research by Taylor and Little in 1995 has shown that off-farm employment does not exclude women from working on their farms.
Farmers' off-farm income does not necessarily "diversify" their income source away from the primary industries. This is because the largest off-farm employment categories are still in the primary industries (D, App 8, p17; Rhodes/Journeaux, p12)).
There are indications of gender differences for off-farm work. Men are more likely to be doing seasonal work off the farm as agricultural contractors, casual labourers, factory hands, truck drivers, tourism workers (D, App. 8, p17) and, as one person put it, as a "locum farmer" (A, p27). For women, regular work is more common (D, App. 8, p16), and employment in the nursing and teaching professions dominated.
Some studies found more women doing off-farm work than men. For example, D (App 8, p15) found 43% of women compared to 33% of men doing off-farm work. One report stated that only two respondents out of 49 male farmers were involved in off-farm work (S6, p10) but in the same report, once spouses were included, 20 people were being employed off-farm in 1996 (S6, p18). Likely reasons for this are the women's qualifications, particularly for teaching and nursing, their history of "urban" work as single young adults prior to beginning farming, and the male partner most often having the primary farm management role.
Women in general had worked off the farm for longer, with most beginning in the 1980s (S3, p61). This presents a picture of women starting off-farm work as farm finances deteriorate and as allowed by family stage and previous qualifications and experience.
Farmers are often in competition for scarce employment positions with those living in rural towns. In rural Southland employment declined from 1986 to 1991 in the rural areas. The greatest changes were a decline in male employment (20% from 1976 to 1991) and a decline in full time positions. These declines would have been even greater without the expansion of dairying which started in the late 1980's (B, p45&46). Off-farm employment figures do not necessarily take into consideration work locations of employees. Thus figures may make a specific locality appear more buoyant than expected since a significant number of local residents may be employed outside the area (C, p42).
Distance to off-farm work differed with farm type, with the one-way trip being highest for large sheep and beef units at 45 km and lowest for dairy farmers at 18 km (S5, p72). Horticultural properties are not reported separately but these are likely to be similar to dairy farms. Despite their longer travelling distance for off-farm work, the large sheep and beef farms in this national survey reported 50% of households had at least one member employed off-farm. Their relatively remote location makes off-farm work more difficult to access for the sheep and beef sector, which arguably is in most need of additional income. Taylor and McCrostie Little (1995, p201) found travel time of less than 1 hour was important to make off-farm employment feasible. The Tuatapere farmers lived close to the town with 64% living within a 15 minute drive and 97% within a 30 minute drive (D, Appendix 8, p3).
The Southland study concludes that land use and associated activities remain a major influence for employment in rural Southland. New development of forest activity is identified as an employment base for the future (B, p3). Similarly the Wairoa report states that the establishment of local wood processing plants could increase employment and household income by a further 87% (S1, p82). The same report shows a table of potential employees relating to household income and forestry employment assuming sawmilling and medium density fibreboard production processing in the Wairoa district. The report estimates the total full time equivalents employed in this programme could increase significantly from 40 in 1995 to 11,080 people in 2029 (S1, p85).
New enterprises were also an important source of additional income. These tended to be activities associated with farming such as tourism ventures or importing farm equipment or expanding a hobby such as handcrafts. Some were physically located on the farm, but they need not be. These enterprises were often done in conjunction with off-farm employment (S3, p109). Ventures were often small scale and begun once children were at school with modest start-up costs, often sharing farm or home buildings, land or equipment (S3, p78). Enterprise size may be deliberately contained to help retain quality of life by restricting demands on time, management complexity and to reduce labour needs (S3, p112).
Diversification had also been widely practiced (S8, p11-27). However, farmers saw truth in the saying "if you can afford to diversity you don't need to, and if you need to, you can't afford to" (A, p35)
Financing new enterprises can also be an important issue for farmers. Generally banks have a conservative policy towards lending for new initiatives. Banks will assess lending for a new enterprise based on a track record, assessment of future cash flows and equity. The National Bank of New Zealand has a large share in the rural market and reviews a new industry before lending money. However, if a client has enough equity the bank bears little risk and will lend money without reviewing the industry (S8, p9). The recent expansion of dairying and areas in crops such as grapes and avocados are financed by a variety of means.
7.5 Labour
Farmers have, over time, employed permanent, casual and contracted people and this has been an important element of maintaining their farming operations. The situation in relation to labour and its availability has changed (and is continuing to change) and remains one of the critical factors for the future of the farming industry. The most observable change has been the reduction in permanent staff and replacement by personal, non paid family, casual or contract workers.
The following table shows changes in agricultural employment from 1986 to 1996 which backs up comments in these reports. Most of the changes in paid workers are due to more horticultural work being available as production has increased.
The Clutha report (S9) refers to the amount of weekly work done on the farm by men and women and records a median amount of work done by men of 51 to 60 hours and 21 to 30 hours for women. In addition most children were working 5 hours a week on the farm and other family members contributed up to 10 hours per week on the farm (D, p5).
Employment in Agriculture |
|||
1986 |
1996 |
% Change |
|
Rural Population |
481,000 | 527,000 | +10 |
Agricultural labour force |
104,900 | 95,400 | -10 |
People invoved in sheep farming |
41,200 | 28,000 | -32 |
Rural male workforce |
141,200 | 134,500 | -5 |
Rural female workforce |
73,600 | 100,800 | +36 |
Working owners (full-time) |
86,653 | 58,560 | -32 |
Paid Workers |
|||
|
20,650 | 27,590 | +33 |
|
6,411 | 19,800 | +209 |
Source: Statistics NZ
A long term trend has seen the increasing use of contract labour units at the expense of permanent agricultural labour positions (C, p26). Another aspect of contracting which is changing is the provision of contract labour from outside areas. Many self- employed farmers are sourcing their specialist labour needs from outside the local area (C, p29).
The Wairoa report also indicates that a significant number of farmers had difficulty finding experienced farm contractors in the district, e.g., fencers. The decline in the availability of work during the 1980's and the early 1990s appears to have resulted in the loss of local experienced agricultural labourers who are now difficult to replace (S1,p57).
Intensive production units, such as horticultural units, require large inputs of labour, and labour costs associated with fruit production represent the largest productive input in the horticultural economy (C, p32). Horticulture is also responsible for most of the increase in paid workers in agriculture.
The seasonal labour demands on fruit production means that horticultural shapes a significant economic relationship with wider communities in the Roxburgh/Teviot area through generation of casual worker populations, and through the subsequent stimulation they provide for the local economy. Patterns of employment have changed in horticulture too, with a declining use of permanent and casual labour and an increased reliance on family and contracted services (C, p37).
The characteristics described in one report relate well to the current labour input into New Zealand farms. The farm household is a primary source of labour on family farms. The household is an economic unit, it is involved in the production and nurturing of the farm family, farm production, other income generating activities including off-farm employment and additional enterprises, and community work. There are now few full- and part-time paid, non family employees. There is increasing employment of contract and casual labour. There is an increasing emphasis on experienced, mature workers due to the health and safety requirements of OSH.
At the beginning of the 1980s one-third of farms employed permanent non family labour, but by 1989 only one tenth of them had permanent employees. While total inputs of labour to farm production decreased during this period, there was still a shortfall which was supplemented by increased family labour (S4, p57). Two reports hint at the hassles of employing labour (A, p28 & S3) and a reduction in the need to provide workers' accommodation. Having workers living with the farming family is shown to be attractive.
About 21% of farms, excluding smaller units, have faced problems with availability of skilled farm workers (S5,p18). Those areas which are remote or lack services may have increasing difficulty in attracting the required labour to operate the systems effectively. Specialist farm labour is more difficult to access where it is further from the farm location.
The continual problem of obtaining staff is illustrated in a passage which says there are difficulties in getting trained staff, affording staff and attracting staff to some districts due to the lack of medical and educational services (D, p34).
Government and other organisations have an impact on employment situations. This is exemplified in the quote which says "policies of the New Zealand Employment Service (NZES) that emphasise permanent employment rather than employment per se have created difficulties for enterprises dependent on seasonal workers such as fruit, flower or vegetable pickers."(S3, p87). The growth in casual, contract and part-time work also has implications for training policies and delivery agencies.
The Wairoa report (S1) also makes some useful comments on employment in relation to land use changes. It says the loss of on-farm employment resulting from land use change to forestry has the greatest single impact. Losses of local employment from the meat processing and farm servicing sectors are smaller and are most likely to be urban employees. On-farm employment losses have a greater impact on rural districts and communities through the migration of people to other districts or regions in search of work or other investment opportunities. However, if land use change concentrates on particular districts, local effects will be greater, e.g., rural schools close because of falling rolls, and district services may cease for reasons of viability.
Employment of labour was seen by many entrepreneurs as another hassle to be avoided. By avoiding the possibility of having to employ labour they could be limiting the growth potential of their enterprises. If they decide to expand the capacity of their enterprise, then a number of adjustments have to be made to accommodate the growth. As a more attractive alternative, labour might be employed on the farm or in the house to release time for the farmers to continue to be responsible for the enterprise (S3,p112). Farmers are therefore looking for ways to overcome hassles they have in their business, including the employment of labour. For example, there were sophisticated systems of reciprocal exchange of labour for machinery between farmer networks (S4,p18). Deer are reported to required less labour (S8,p12), which enables a deer farmer to increase production without putting on a significant amount of extra labour.
7.6 Succession
The passing of farms from one generation to the next has been an important feature of agriculture in New Zealand. A reason for farmers to continue to farm and develop their farming business is so that they can pass it on - usually to their son. As the next generation usually has little equity, their entry into farming can be difficult, particularly if it occurs at a time of poor product prices or high interest rates. In most cases the successor couples put long hours of work onto their property and are also likely to have one or more sources of off-farm employment between them (S2, p3).
There is now more emphasis on treating off-spring fairly and on identifying any children who want to go farming rather than being "foisted with the family farm" (A, p31).
Many farmers encourage their children to gain tertiary training or live outside the area before deciding on a farming career. Only 48% of farm households expect one of their children to take over the family farm. Farming is not seen as a desirable career choice (S9, p60&61). While 48% may seem low, it is probably still a sufficient number to maintain farming businesses. Also, about one third of adult children of farm families in one study, while not working on the farm, had careers in various off-farm facets of the primary industries (S3, p61). This career choice suggests that taking over the family farm at a later age would still be a feasible option in terms of skills and industry knowledge.
The problem of passing a farm to the next generation is illustrated in the Farm Succession Viability and Retirement Report which suggests that four out of the ten farms studied are likely to have a viability problem after succession. It also suggests that none of the successors could hope to take on the farm on market terms but required assistance in the form of gifts, nil or low interest loans and eventually bequests (S2A, p78).
Some reports made reference to taking on farming as a future career, or the desirability of their children pursuing farming as a career. Forty percent of dairy, as well as hobby, farmers expressed neutrality to the statement. Thus there is quite a high level of uncertainty or ambiguity amongst farmers about the feasibility or desirability of intergenerational transfer of the farm property (S5, p19).
One report on succession found that retiring farmers were aged around 59 on average and the successor farmers were aged about 32. Interestingly, the retiring farmers began farming aged 16.5 years but the successors had started farming at age nearly 21 (S2, p27-29). The findings on education level suggest that some of this difference between the generations has allowed the successor farmers to undertake more formal education or young adult activities, like "OE", than their parents' generation did, and that they had been encouraged to do this by their parents. (S9, p60).
Succession has an influence on adoption of new technology. The adoption and use of new farming techniques have traditionally been the preoccupation of each new farming generation. The adoption of new technology on the farm and the reluctance of the retiring generation to learn new skills often hastens retirement (S2, p18). However, farms passed on to other than family members does not necessarily mean reduced technology or production as other new entrants to farming also adopt new technology.
7.7 Age
No strongly age-related issues were identified, including concern at increasing farmer age. In one report the average age of the 266 farmers surveyed was 44 years with little variation across farm types (S5, p16,41). Older farmers were found more on smaller farms and younger farmers more on larger farms which tended not to be owner operators (S1, p54). However, on all farm sizes, 58% of farmers were under 50 and only 13% over 60 years old - of whom three-quarters were on smaller farms. This could reflect a desire to remain rurally based in retirement on a small farm after moving from a larger farm. Very few farmers surveyed were in their 20s, but as the surveys were of farm owners or managers, it is not surprising as most farm owners are in an older age bracket.
Maori farmers surveyed had greater representation of older ages, with 35% of respondents over 60 years. But as 42% of Maori respondents were either owners, trustees or committee members rather than farm managers or supervisors, this mainly reflects management/ownership structure of these farms (S6, p11).
Farmers who sold land were often doing so for reasons of aging or poor health, and usually (in 80% of sales) the farms sold were small or moderate sized, under 800 hectares (S1, p59).
Stage of life was generally more influential on farming family activities and attitudes. Many families reported this had a big effect on their activities. For example, few families with preschool children undertook alternative enterprises because of the demands of parenting (S3 p54, 63).
More farm work was undertaken by those with young children (S4, p11) because caring for young children kept them home-based. Sometimes grandparents were able to provide casual childcare. Once children commenced schooling, time spent ferrying children to the school bus and other activities or off-farm work reduced the time that women especially could regularly spend doing farm work (S4, p12). Life stage was also very influential on community activities work with children being a major driver of their farming parents involvement with Plunket, schools, sports and groups like Guides and Scouts.
Within rural communities trends of reducing youth population, particularly leaving the district for education and employment, were identified (C, p6). The Clutha study found only 20% of youth expected to be in the district in 5 years time (S9, p4) and all those intending further study would be leaving the district (S9, p58). They also undertook most of their activities in the nearest larger centre.
Older people are more tied to a place and less likely to move elsewhere but are concerned about availability of services like healthcare (C, p6; S9, p21; B, p47).
7.8 Gender
A number of the reports consider gender in their survey data and interpretation. Several gender related issues emerged in the reports reviewed.
Issues relating to women:
- Women may restrict the size of alternative enterprises in order to control their time inputs to the enterprise (S3, p8).
- More women see themselves as farmers (rather than farmers' wives) due to ownership structures (partnerships have increased) and to their perception of their farm role and work (S4, p49,50).
- It is becoming increasingly difficult to distinguish gender difference in terms of farm labour and equipment use (S4, p33).
- Women appear to have a particularly active role on dairy farms (S4, p40; S5, p16 & 41).
- Women are described as "unpaid' in one study which sources several references (S4, p45). However, because of the rise in partnership business structures, "drawings" (which may be more under the woman's than the man's control) are being taken in place of wages, but are being pressured by low farm profits.
Women are undertaking more leadership roles in the community through organisations like Plunket, parents centre, and increasingly school boards of trustees and local government (S9, various refs, D, p33).They often access leadership training through these organisations or their off-farm work.
Issues relating to men:
- Men were still the most likely successor to the farm, but there has been a change from the first-born son taking over the farm to any of the sons being the most likely successor. "Patriarchy prevails but not primogeniture"(S2,p6).
- Mens' opportunities for leadership roles and training have reduced due to the demise of Young Farmers clubs and increasing time spent running the farm (S9, p117). Male farmers are becoming increasingly isolated and this, together with their despondency about farming prospects, raises some concerns. For example, 17% of men report only one social interaction per week with people from outside their household (S9, p66,67). Other reports refer to the loneliness of farm work (S2, p19,20) and the difficulty of working on your own (S3, p90). The rise in off-farm work, which particularly represents women (S9, p61), is increasing the isolation of the male farmer. Concern about this was increased as a result of women working off-farm with increasing stress on the farming partner (usually male) and concern about their safety (S9, p92)
7.9 Stress
Most studies report increased stress and significant stress levels (e.g., S9, p54,90). An example comment was "How much leaner can we go before we snap?" (C, p78), and the level of stress encountered clearly concerned the researchers (e.g., A, p28).
Lack of time is a cause of stress which is related to low profit and inability to afford paid labour (S4, p27) and is reportedly turning farmers' children away from farming as a career.
Farmers are experiencing low morale in comparison to other professions (S5, p14). Lack of financial return from farming is directly related to reduced enjoyment of farming (S3a, p76). Financial success is a key stress reliever (S2,p20).
Spouses are a major source of motivation and support - which emphasises the family farm values at the core of New Zealand agricultural production, (S4, p20).
Sometimes undertaking other enterprises increases farming satisfaction as the farm was "on display" for tourism and retail ventures (S3, p96).
7.10 Access to Services/Population Decline
Population decline is a key factor in the reduction of services. Whilst some services, such as postage/courier, telecommunications (S3, p71) have improved, others are seen to have declined. Schools are seen as having a key part in the local community and are discussed separately in Section 7.11. Modern business methods and easier travel have decoupled the farm from the local community which has hastened the decline in services (C, p28, 29, 48; S3, p69; S9, p72). For example, bank branches have been replaced by telephone banking, or retracted to larger centres which in turn has attracted more trade there. Off-farm work may occur some distance from the local area which also shifts use of other services from the local centre. The farming community is very aware of their wish to retain local services and many deliberately support local business for day to day retail purchases such as groceries (C, p48; S9, p111). Population decline has had other effects - the breadth of local communities has changed with more low income families (possibly on income support) moving to the area for cheap housing, and professional workers moving elsewhere. Reports comment that the loss of the professional occupation grouping such as local accountants and lawyers, has implications for servicing the local community, in terms of their skills not being as available for community roles such as school boards of trustees (A, p25; C, p40).
Provision of services to rural communities also provides significant off-farm work (Taylor & McCrostie Little, p233) such as teaching and nursing jobs. As services centralise at a greater distance then such off-farm work is less available, which in turn affects the flexibility of the farming families' ability to undertake off-farm work.
Population decline is a continuing trend but can be altered by changes in land use. For example, in Southland, the decline has been slowed by the expansion of dairy farming which has brought new people into the area (B, p46).
The rate of future population decline is not predicted in the reports. One report suggests that in the more isolated areas, maximum depopulation has already occurred. The same report, (B, p47) expects small towns to continue to decline in population following changes in agricultural practices (B, p47).
Changing land use to forestry was seen as a major accelerator of decline in services in the Wairoa district, although the trend was already seen to be occurring with other community changes (S1, p46, 68).
One report asked whether people expect to remain in the district. Thirteen per cent of people were expecting to leave the district in the next 5 years, but 40% within the next 10 years (C, p50). Reasons to leave were availability of services and employment opportunities. As already mentioned, all youth intending further training were planning to leave the Clutha area (S9, p58).
Access to services was the second highest concern, after farm profitability, in one report (S5, p31). However, in another, both roading and health services were seen to have improved in quality in the past 10 years and isolation was less of an issue.(S6, p17).
There are few specifics of what constitutes adequate provision of services. The Clutha study identified key indicators of acceptable travel time of under 30 minutes to a General Practitioner Doctor, and primary schools less than a one hour bus trip each way (S9, p4).
People are frustrated by fragmentation of government services (A, p52). The transition between different means of delivering services is also an issue and the travel component of delivering services to rural people and their different needs such as difficulty getting to shops if sick or hurt.
How land use changes are approached also affects population and provision of services. For example, the Wairoa project found that although forestry still required servicing, and locally based services were appropriate for many activities, the lack of services aimed at forestry in the local area could entrench provision of services from more distant centres and hasten decline (S1, p123). Also, when forests are established and the homestead and a small farm subdivided and sold, the pasture is kept as a small hobby or retirement farm which helps retain the rural population (S1, p94).
7.11 Importance of Local Schools
Schools, particularly primary schools, play an important part in the local community which fosters communication, self reliance and community activities.
Education is an issue in several of the studies. In the Rangitikei report (A, p40-43) a section on education raises a number of issues:
- changes in school rolls and the effect on resourcing;
- school decile ranking not reflecting reality;
- travel time and cost for teaching staff travelling into the area;
- cost of teachers' professional development;
- school bus cost and safety;
- availability of suitable schooling as a factor in staff accepting farm employment;
- the effect of schooling on farm attractiveness for sale and thus on land values;
- accessibilty of special needs resources;
- restricted catchment and skills base for boards of trustees in rural schools.
Location of school services is also an important issue. The Clutha Study (S9, p22) shows that children travelling to their nearest primary school are spending an hour on the school bus each way, making a total travelling time of 2 hours each school day. This school was established in the 1960s from an amalgamation of about 10 smaller schools and the roll has declined since the school was established. Amalgamation could solve some problems of education quality in smaller communities identified in the reports (e.g., A, p40-42) by providing for professional clustering of teachers, and more optimal use of facilities, etc. However, in addition to the difficulties of the transition period during amalgamation, such moves increase the travel time for children. The Clutha study specified an upper limit of the acceptable travel time to primary school of 1 hour each way. Their school is at the upper level.
Secondary students generally have to travel further to their nearest school. In the Clutha study (S9, p22) this adds an additional 20 minutes each way making 2 hours 40 minutes travel time each school day. Extracurricular activities increase the parental input required to provide travel and contributes a significant additional time requirement. Farmer parents say they would spend more time on farm work and leisure (S9, p47) if they were not committed to this extra time demand.
Interestingly, while the Clutha study says the school roll has declined, the data provided for the 4 years 1994-97 clearly shows a fluctuating roll. The teacher numbers shown for the same years show that the students per teacher have basically increased and that in 1996, the school had both one less pupil and one less teacher! Thus, teacher numbers may not be closely related to the roll number. Whether this is due to the age structure of the children attending the school or to a lag between acting on teacher/student ratios is not stated in the report. Other reports do not give both teacher and student numbers through time so generalising this observation is not possible. The Wairoa study (S1, Appendix 5.1) identifies a number of schools and their rolls through the period from 1981 to 1994. These figures show school rolls have fluctuated but generally declined, and that larger schools and urban schools have more children for each teacher. Adults surveyed in one study (S6, p17) showed a difference between Maori and European farmers, with Maori considering education quality has not changed over the last 10 years, whereas Europeans considered it had declined. School rolls are expected to continue to decline (S6, p3).
Boarding School
Some families (about 1/3 of those surveyed in Clutha, as indicated by spending more than $3,000 annually on school fees (S9, p46)) have chosen boarding school for a variety of reasons, including avoiding daily travel demands. These families, if they did not spend the money on school fees, would increase their spending on off-farm investment/retirement savings, debt reduction and farm expenses (S9, p47). This suggests a commitment to education spending is constraining farmers' ability to secure their financial future through alternative investments.
Parental input required for education is significant in smaller schools due to the smaller pool of parents available for assistance and the travel time to get to school activities. School newsletters are important throughout the community even to families with no school age children (D, p29).
Boarding school for secondary education is a traditional recurring theme in the rural areas (C, p25; A, p42). The key change is the affordability of boarding fees with lower farm incomes. In some instances this means parents have sent their children to the local school because of the lower cash cost (A, p42). There is also a circular issue which the current farming downturn may help address. Historically, farming parents unhappy with the quality of the local secondary school sent their children elsewhere, thereby reducing the potential of the local school as it became smaller, with a narrower range of students than the surrounding community catchment. In one instance, reported in the Rangitikei study (A, p62), a Wairarapa school and community deliberately turned this situation around over a 10 year period.
7.12 Volunteer Services
The overall impression from these studies is that farmers are disproportionately high contributors to voluntary community work, contributing both time and money. This is done because of a commitment to maintaining local services, and is also historically part of their personal value system. Increasing demands and a reducing population combined with an economic need for more personal attention to their farming businesses are contributing to community fatigue approaching "burnout", with volunteers considering they are at about maximum sustainable levels of voluntary input. The fragility of maintaining services is apparent from these studies and from other information
Volunteer services are having difficulty attracting and retaining volunteers such as ambulance staff and volunteer firefighters (A, p47). The reasons cited are increasing off-farm work and employer reluctance to allow employees time off work for such activities. In Taylor and McCrostie Little's study (1995) reduced participation in voluntary services was not associated with an increase in off-farm work (p229) but was a "regular and historical responsibility"(p228) particularly for "generational" farming families. Combining continued voluntary work with increased off-farm work commitments is an additional and considerable stress (S4, p34).
The Roxburgh/Teviot, Tuatapere and Clutha studies (C,D and S9) show farmers will go to great lengths to sustain their rural communities in cash, time, and support of local services. In particular, the Tuatapere Voluntary work project (study D) shows that farmers are disproportionately high contributors to voluntary work in their areas when compared to non-farmers. The Roxburgh/Teviot study found that pastoral farmers are more able than horticultural producers to contribute to voluntary work, due to horticulturists seasonally intensive work schedules, but that both were important contributors (C, p85). Local businesses also contributed to the community (C, p43)
Self-employment which provides flexibility of working hours is an important feature. Several of the reports record fatigue from the demands of community work from a reducing pool of volunteers (C, p86; A, p47) and the difficulty of fitting voluntary work in with increased pressure of farming work due to less hired labour and poor farm returns.
A reduced population reduces the pool of people available for such work. Those remaining are prepared to contribute greatly to maintain or sustain services. The Tuatapere study shows people are happy with the level of community work but would not like an increase or decrease. The implication is that a decrease would mean loss of services which they didn't want, but they feel at their maximum contribution maintaining services they feel are important (D, p6).
One study (S4, p29) associates greater turnover of farming properties with difficulty sustaining informal support through neighbour networks. This ties in with their finding that voluntary community work is more important to so called "generational" farmers than to newer entrants to farming (S4, p34). Thus, reduced succession could be associated with a reduced commitment to voluntary community work.
Those undertaking voluntary work gain personal benefits from it. The Unpaid Work Scoping Study (S4, p22) describes committee work providing new skills and confidence that can benefit the farm management and a similar comment is made in the Entrepreneurship Study (S3, p104).
Increasing requirements under OSH, requirements of funding agencies, and the resource demands of community governance are also referred to in several reports as a constraint to provision of volunteer services. For example, meeting the safety requirements for funded playgroups (C, p74) and perceived beuracracy for community activities such as working bees to build a shed(A, p51).
The significance of the contribution made by a few key people is humbling and the authors wonder what will happen if these people withdraw their social contribution. For example - a community newsletter put out to 1,100 households by the local pharmacist (D, p29, p36 copy in Appendix II); the individual who delivers prescriptions on her way home from off-farm work (A, p40); a legacy made some years ago which means the Mangaweka Plunket is in a strong financial position (A, p29 footnote). There are numerous examples of the significant impacts of a few key people. These include the Taihape Medical Centre One Stop Shop in the Rangitikei, which is seen as very positive and significant, and driven by a few key people (A, p45,46); the local shop in Millers Flat which was purchased by community shareholders largely from farming families again led by a small number of key people (C, p79). Also in Roxburgh, a local group is facilitating tourism and services to migrant or short term workers in the district. In Tautapere the impacts of a small number of community workers is significant and ongoing (D, p28).
A recent example of the fragility of services is the Te Aroha volunteer ambulance which came to media attention as being seriously short of volunteers (NZ Herald, 4 March 1999, copy attached). This arose when one farming family, who included a volunteer ambulance officer, left the district, and their farm was bought by a neighbour (R Underwood, pers comm). The Tuatapere study reports organisations that have had no new members for 5 years and who expect to face a membership crisis in about 5 years (D, p27). The Roxburgh/Teviot study community also expects problems within 5 years and considers the community is at a "watershed"; but people still strongly oppose accepting a future based on `decline"(C, pp70-71). Maintaining services, through voluntary work or otherwise, is seen by farmers and residents as a necessity to help slow depopulation of the local areas, which, if it occurred, would accelerate degradation of services.
There are a great number of voluntary groups in the communities studied (D, p104; S9, p63). It raises the question of whether the groups can work together to reduce the overall workload and resources needed by working more closely.
7.13 Democracy
Farmers feel their voice is not being heard and that their role in the economy is not being recognised. Several comments to this issue were made in the reports. In fact, the role of these reports in providing a voice for the rural community was often a motivation to participate in the research programmes. An example of this is the foreword to the Clutha report (S9, p3).
The important role of the community board in increasing the sense of democracy in the community was stated for Tuatapere (D, p36). An interesting interview with P J O'Rourke, about his book "Eat the Rich" which contrasts different countries around the world, found law and order, property rights and democracy to be the key attributes of a rich country - not the economic freedom he had expected (NZ Herald, attached in Appendix II). An earlier study by an international economist found participation in "social glue" community activities, or "the knitting circle" effect, is a key component of successful societies (P J O'Rourke).
Farmers perceive impracticalities in implementing recent legislation such as the RMA and OSH (A, p50-53). With OSH it is as if the farmers have received a message of "shape up on safety or we'll take you to the cleaners" when a message interpreted as "you, your family and farm workers are important and vulnerable, and getting hurt in preventable circumstances - let's work together using a range of tools to protect our human capital for the benefit of all of us", would engender more voluntary support and possibly more compliance.
This contrasts to implementation of some farming technologies - e.g., Kiwigreen - which was initially voluntary and supported/incentivised then made compulsory at a specified future date. By the time it was made compulsory, adoption was sufficiently high and so the compulsory nature was less of a threat, as progressively most people had adopted and developed a level of comfort with the technology. This was a shift in approach from regular spraying based on time since the last spray to spraying based on monitored pest levels (Wright and Underwood, 1992; R Underwood, pers comm).
The timing of the introduction of OSH and RMA legislation coincided with a period of poor farm profits, which limited farmers' ability to implement the required changes as they did not see them as a priority. This has contributed to farmers feeling that policy makers do not understand their circumstances and they feel as if they are being "kicked when they are down". It is also contributing to some hostility and poor communication within the community between local and central government, as described in the Rangitikei Report (A, p50-53).
Several of the studies expressed concern over future leadership of their communities and farmer representation organisations (e.g., S4, S9,C). This is consistent with other comments about changing gender roles, the demands of community governance and population decline.
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