OFF-FARM INVESTMENT
Question 9: Off-farm Investments or Business Activities
Respondents were asked if during the 1992/93 financial year, any members of their household had any off-farm investments or business activities. Figure 7 shows the percentage of farms which had such off-farm investments.
Figure 7
While similar percentages of sheep and beef, pipfruit and kiwifruit properties had some form of off-farm investment (at just over half), cropping farms stand out with 70% having off-farm investment. On the other hand, only just over a third of dairy farmers had such investments (excluding shares in dairy companies, which are not directly income earning).
Table 20 provides information on the type of off-farm investments held, and their average value for each farm type. Again there is considerable variability, so both mean and median averages are provided. Not only do a higher percentage of cropping farms have off-farm investments, they also have a noticeably higher value of investment. Similarly dairy farms show both the lowest incidence of investment and also the lowest average investment value.
Table 20 also gives the relative popularity of various forms of investment for each farm type. For example, over one-fifth of dairy farmers with off-farm investment have term deposits. For cropping farmers, the most popular (at 43%) type of off-farm investment is shares.
| Table 20 : Average Earnings from, and Percent of Farms with Various Off-farm Investments | |||||||||||
| Dairy | Sheep & Beef | Pipfruit | Kiwifruit | Cropping | |||||||
| $ | % | $ | % | $ | % | $ | % | $ | % | ||
| Term Deposits | Mean | 5,542 | 20.8 | 8,111 | 24.1 | 5,135 | 27.7 | 7,152 | 29.6 | 10,921 | 20.0 |
| Median | 3,000 | 3,250 | 3,000 | 3,881 | 4,151 | ||||||
| Shares | Mean | 867 | 15.8 | 3,155 | 25.5 | 1,750 | 26.5 | 5,229 | 27.2 | 7,579 | 43.3 |
| Median | 443 | 600 | 420 | 1,521 | 1,723 | ||||||
| Off-farm Business | Mean | 1,111 | 2.0 | 19,294 | 2.4 | 4,400 | 6.0 | 25,421 | 13.6 | 20,678 | 11.7 |
| Median | 1,111 | 13,000 | 2,000 | 21,000 | 5,867 | ||||||
| Other Farming Activities | Mean | 18,000 | 5.9 | 19,833 | 2.0 | 3,500 | 4.8 | 9,652 | 9.9 | 28,333 | 5.0 |
| Median | 9,000 | 16,500 | 0 | 607 | 30,000 | ||||||
| Property | Mean | 6,206 | 9.9 | 5,841 | 9.9 | 16,222 | 16.9 | 7,410 | 9.9 | 17,543 | 6.7 |
| Median | 5,350 | 3,120 | 7,150 | 5,000 | 17,150 | ||||||
| Other Investment | Mean | 0 | 0 | 26,500 | 1.4 | 1,500 | 2.4 | 15,950 | 4.9 | 27,000 | 6.7 |
| Median | 0 | 19,000 | 1,500 | 17,300 | 33,000 | ||||||
| Total From All Sources | Mean | 11,290 | 12,338 | 13,023 | 18,793 | 17,893 | |||||
| Median | 6,400 | 5,500 | 8,500 | 14,500 | 7,407 | ||||||
Table 21 gives some indication of how widely spread these off-farm investments are.
| Table 21 : Number of Off-farm Investment Sources | |||||
| No. of Off-farm Investment Sources | Dairy | Sheep & Beef |
Pipfruit |
Kiwifruit |
Cropping |
| 0 | 64 | 145 | 39 | 36 | 18 |
| 1 | 17 | 78 | 20 | 21 | 23 |
| 2 | 17 | 54 | 13 | 14 | 14 |
| 3 | 3 | 15 | 8 | 5 | 4 |
| 4 | 0 | 2 | 3 | 3 | 1 |
| 5 | 0 | 0 | 0 | 2 | 0 |
For example, 145 sheep and beef farms had no off-farm investments, while 15 had three sources of such investment. Among all farm types, the number of farms with more than two investment sources drops off sharply.
Table 22 divides the total gross income from each form of investment by the number of people in the household holding that form of investment, for each farm type. This gives an indication of the gross investment income on a per person basis. Only those properties holding off-farm investments are included.
| Table 22 : Mean Gross Income per Person from Off-farm Investments | |||||
| Dairy | Sheep & Beef |
Pipfruit |
Kiwifruit |
Cropping |
|
| Term Deposits | 3,590 | 5,802 | 3,064 | 4,196 | 7,772 |
| Shares | 673 | 2,222 | 950 | 2,845 | 8,267 |
| Off-farm Business | 1,111 | 19,294 | 3,067 | 19,390 | 14,621 |
| Other Farming | 12,167 | 17,500 | 1,750 | 9,013 | 15,833 |
| Off-farm Property | 3,988 | 4,489 | 10,044 | 7,035 | 17,434 |
Table 23 provides additional information on the number of people in each household holding off-farm investments or other business income. For example, 64 dairy farms (just under two-thirds of the sample) have no investments, 17 have one member with off-farm investment, 17 have two members with off-farm investment, and 3 have three members with off-farm investment.
| Table 23 : Incidence of investment or other business income | ||||||||||||||||||||
| No. of People with Investment | Dairy | Sheep & Beef | Pipfruit | Kiwifruit | Cropping | |||||||||||||||
| No. of farms | % | No. of farms | % | No. of farms | % | No. of farms | % | No. of farms | % | |||||||||||
| 0 | 64 | 63.3 | 145 | 49.3 | 39 | 47.0 | 36 | 44.4 | 18 | 30.0 | ||||||||||
| 1 | 17 | 16.8 | 78 | 26.5 | 20 | 24.1 | 21 | 25.9 | 23 | 38.3 | ||||||||||
| 2 | 17 | 16.8 | 54 | 18.4 | 13 | 15.7 | 14 | 17.3 | 14 | 23.3 | ||||||||||
| 3 | 3 | 3.0 | 15 | 5.1 | 8 | 9.6 | 5 | 6.2 | 4 | 6.7 | ||||||||||
| 4 | 0 | 0.0 | 2 | 0.7 | 3 | 3.6 | 3 | 3.7 | 1 | 1.7 | ||||||||||
| Over 4 | 0 | 0.0 | 0 | 0.0 | 0 | 0.0 | 2 | 2.5 | 0 | 0.0 | ||||||||||
| Total | 101 | 100.0 | 294 | 100.0 | 83 | 100.0 | 81 | 100.0 | 60 | 100.0 | ||||||||||
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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