5. Methods
5.1 SURVEY OF FARMERS
After consultation with representatives of MAF and Federated Farmers, a survey questionnaire was developed to quantify the proportion of farmers facing particular compliance costs and the actual costs faced by them. The survey covered the costs farmers had incurred (both in dollars and time) for applying or objecting to a resource consent for their farm, making a submission on their regional or district plan, and complying with OSH, employment, and taxation requirements. The survey also asked farmers how concerned they were about the impacts of the relevant legislation on their farm business. The questionnaire used in the study is included in Appendix 10.1.
The sample consisted of the farmers in MAF's annual outlook survey. The survey covers a panel of 1000 pastoral farmers and 200 horticultural growers. Both samples are stratified by farm type and region. The market research firm AC Nielsen, under contract to MAF, conducts the survey of pastoral farmers in October and of growers in April of each year. Our survey of compliance costs was included in the October 1997 pastoral outlook survey and the April 1998 horticultural outlook survey. Responses were received from 825 pastoral farmers and 151 growers, a total of 976 respondents.
Appendix 10.2 shows the number of respondents by farm type and region for all farmers surveyed.
The cost of time spent on compliance was calculated by multiplying the time spent on compliance (hours per year) by $20 per hour and by totalling the dollar amounts from the survey responses. The figure of $20 per hour was calculated on the basis of the amount a farmer would have to pay to employ a farm manager, while the farmer spent the time on compliance. This is what we calculated a farm manager's time was worth, as distinct from a farm owner's time. It represents an opportunity cost of work on the farm, rather than work off the farm. We chose this approach because farmers would vary in the amount they could charge for their skills off the farm, but the cost of employing a farm manager would vary much less. Because taxation is the highest compliance cost, and a cost met by all farmers, we report total compliance costs (less taxation) as well as total compliance costs (including taxation).
5.2 CASE STUDIES
From the survey responses, the cost of compliance was calculated for all compliance costs other than taxation, and for taxation separately. We then selected the forty farmers who had the highest level of compliance costs (other than taxation) and who were in any of the following regions: North Waikato, South Waikato, Bay of Plenty, King Country-Taupo, North Canterbury, South Canterbury, Otago, Southland. The selection was limited by region because we needed to ensure that it was geographically feasible to visit each of the selected farms within the budget for the research. These regions contained more than half the sample.
AC Nielsen were then asked to provide the names and contact details of 20 pastoral farmers and 4 growers who would be willing to be contacted by Landcare Research for the purposes of the case studies. By this means it was hoped that the case studies would comprise those farmers who had the highest compliance costs and where the process of compliance had caused the most difficulty. This would allow us to verify the highest compliance costs that were reported by farmers.
Because of privacy obligations we were unable to approach all the survey farmers who had high compliance costs. AC Nielsen approached each of the farmers we wished to interview to determine whether they were prepared to participate in the case studies. Several farmers with very high compliance costs were unwilling to be contacted further. We responded in two ways. First, we asked AC Nielsen to provide names of farmers with lesser compliance costs, but who were willing to be contacted further. We also obtained the names of farmers who had faced significant compliance costs, from regional MAF Policy agents, Federated Farmers, selected farm consultants, and other professionals. This enabled us to canvass a wider group of farmers than the AC Nielsen sample alone.
This inability to contact all survey farmers with high compliance costs, means we were unable to ascertain why they had high costs and whether the nature of their costs was any different from those of the farmers we were able to interview. Therefore, we cannot claim to have covered all aspects of compliance cost problems for farmers.
Median statistics are reported, rather than means, because medians are not affected by a skewed response pattern caused by a small number of particularly high, or low, responses. This is particularly important for reporting aggregated compliance costs for the RMA. Some farmers incurred very high costs (mainly capital costs associated with complying with environmental standards) and the inclusion of these high figures would significantly bias the mean. More than half of the farmers would have to report unusually high costs for the median figure to be affected by this bias.
For most compliance costs, we report the median result for the time involved in compliance, the median dollars spent on compliance, and the sum of both. It is unlikely that the median of the aggregation of time and money will equal the sum of the two individual medians. The aggregated figure is a new variable and it is unlikely that the mid-ranked farmer for any one variable will also be the median farmer for the other two variables.
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