4. Promoting Industry and Community Performance Category
4.1 ICP 551
|
Programme Title: |
Impact of E-Government on the Rural Sector |
Programme Leader: |
Chris Nixon |
Institution: |
NZIER |
Summary
- This paper is designed to inform MAF, the E-government Unit, rural people, and other interested parties of the opinions of rural people on issues related to e-government.
- The State Services Commission’s (SSC’s) E-government Unit has developed a strategy to make the internet the dominant form of communication between government and its citizens by 2004.
Background
The State Services Commission’s (SSC’s) E-government Unit has developed a strategy to make the internet the dominant form of communication between government and its citizens by 2004.
MAF is aware that e-government strategies will impact on rural people and want to ensure that government has the views of rural people in relation to the development of e-government. It also recognises that an appropriately designed e-government strategy could provide better services to rural people and improve cost effectiveness and efficiency of government agencies.
APPROACH AND OUTCOMES
Interviews were carried out with rural people (forums in Balclutha and Taihape), interest groups (Federated Farmers and Rural Women), the E-government Unit, MAF (E-cert staff), foresters, and horticultural and vegetable grower representatives.
With the current e-government service, there is a high degree of dissatisfaction. The main sources of this dissatisfaction revolve around:
- The patchy and poor access to e-government services by rural people
- The poor design, lack of standardisation, and lack of appreciation of what rural people require.
Despite this, rural people do see that a well-designed e-government service could have major benefits for both government and rural people. Therefore they fully support the attempts of the E-government Unit to design and more coherent e-government strategy, while at the same remaining sceptical of what they are able to achieve given past experience with government.
The E-government Unit faces a number of hurdles before they can deliver an effective e-government service. Unfortunately, these problems are beyond their direct control.
The most pressing problem is that there is no co-ordinated access plan for rural people to obtain e-government services. While the government, notably through its bandwidth programme run by MED, is progressing its plans to improve access the actual shape of this programme and its coverage have not yet been fully identified.
Of equal importance is the attitude of government departments to the e-government strategy. While heads of departments have all signed on to implementing the e-government strategy, there are doubts whether they can carry this through. The rural people interviewed were particularly concerned about the department that they deal with most often, IRD.
The withdrawal of Government’s physical presence from rural districts may have created externalities. There is now heavy pressure being put on various agencies to "fill the gap" in service provision and bridge technology training and access gaps. E-government may mitigate the loss of services, to some extent, however employing other organisations to provide a "fuller" service may also be cost effective.
The cost-benefit analysis, although mainly descriptive, does point to the benefits of a well-designed e-government system. It shows that, if implemented properly, business, citizens, and government can benefit.
PUBLICATIONS
Report entitled “E-Government and the Rural Sector”.
4.2 ICP 552
|
Programme Title: |
Farm adjustment and restructuring |
Programme Leader: |
Tony Rhodes |
Institution: |
Agriculture New Zealand |
Summary
The report examines farm adjustment and restructuring in the North Island hill country. It builds on earlier research, which suggested that many hill country farmers are not economically viable, yet the pace of structural change appeared to be slow.
The methodology used was that of extensive interviews with current farmers, including farm leaders, and with farmers who have exited the land. In addition, extensive interviews were carried-out with a wide range of community members in three case-study areas: Wairoa/Gisborne, Ruapehu and Tararua. Statistical data were obtained from Statistics New Zealand and a number of other sources.
The report concludes that there is indeed a substantial level of restructuring underway in the hill country, but that the processes operating are complex and involve both economically successful and unsuccessful farmers. These processes are explained in terms of a wide array of personal, family, community and financial factors. The timing of restructuring is viewed as dependent on the joint role of farms as business units and as a life-style. Low prices alone are shown to be insufficient to trigger restructuring. Individual circumstances rather than community factors are identified as the prime determinant of change. At the same time the report also identifies the health of the rural community as a whole, and in particular access to good quality education, as important determinants of the sustainability of farms.
Background
To assess how North Island Hill Country farmers are restructuring their businesses, and how this response is influenced by economic and social environmental factors, how these responses impact on sector performance, and the implications of these changes for agricultural sustainability and the sustainability of rural communities.
A previous study, Impediments To Optimising The Economic And Environmental Performance Of Agriculture, (MAF, Technical Paper 2000/17) by Rhodes, Smith and Willis, indicated that many hill country farms were not economically viable. This raised the issue of how quickly the sector is able to restructure and respond to change and shift farm resources to more optimal, economic and sustainable use, and why such structural change appears to be so slow.
This current study looks at firstly how much change is occurring, and the impediments and supportive conditions contributing to change. Secondly, it examines whether such change is generating better outcomes such as more effective economic use of resources, and stronger more sustainable rural communities and service sectors.
Approach & Outcomes
The approach adopted involved an extensive literature review, the use of a wide range of published and unpublished data and 39 interviews with farmers, ex-farmers, officials of Rural Support Trusts, and other agricultural experts. In addition, extensive interviews were conducted with teachers, local government officials, retailers and community workers to develop three case studies of Taumaranui (Ruapehu); Wairoa/Gisborne and Dannevirke (Tararua). Data used were obtained from Statistics New Zealand, Quotable Value New Zealand and a range of other sources.
The report documents a substantial level of on-going restructuring in the hill country, with between one-quarter and one-third of all land involved in some form of transaction in the previous six years. However, the report finds that the process of restructuring is not simple and takes many different forms that involve both economically “successful” and “unsuccessful” producers.
The approach of individual farmers and farm households to restructuring is shaped by a wide array of personal, family, community, and financial factors. The report argues that whilst the decisions of farmers can be understood within a narrow economic framework, the timing of change is intimately connected to the inseparable link between farms as business units and the family security associated with farms. In this sense the report maintains that rather than being pushed off the land, farmers can be seen as being pulled off the land by a diversity of forces. This link can explain the persistence of cash flow poor farmers on the land, where it might have been expected that they would decide to exit or restructure. More broadly, this finding leads the report to suggest that the market assumption that low demand for agricultural products, signalled by low prices, as a trigger for restructuring needs to be reconsidered. In comparing the decisions, and actions, of farmers across the three study regions the report concluded that differences in decision-making could be attributed more to the individual circumstances for farmers, rather than the community milieu in which they were embedded.
In looking to the future the report maintains that whilst there is a significant link between the health of the farming sector and the concomitant health of rural communities, an emerging issue relates to role of education in maintaining the vibrancy of rural communities. In particular access to good quality compulsory education up to Year 13 was identified as being a key element in keeping school leavers in rural communities.
4.3 ICP 553
Summary
There are significant numbers of Maori owned farms throughout Northland, especially in the Far North District, but there are relatively few horticultural enterprises. While some figures indicate that the large scale farms are operating at a moderately high level, there is no current research identifying this or comparing their production with European owned farms. It is also not known how the small to medium size farms are operating. There are a considerable number of small Maori owned farms being leased to adjacent Maori or European owned businesses. Exactly how many and the terms and conditions of these leases is unknown. There is no known recent research covering details of any constraints to current production in Maori owned businesses.
Goal:
Through analysis and discussion with owners, identify the level of physical and financial performance of Maori owned pastoral and horticultural businesses. To compare them with European owned businesses of similar scale.
Approach & Outcomes
Data covering the number, location and size of Maori owned farms in Northland was supplied by AgriQuality using their in-depth knowledge linked to the database of the Far North District Council. A case study approach was carried out with Agriculture NZ and AgriQuality staff gathering information and analysing it and discussing it with owners of small to medium beef farms, dairy farms and large scale, Maori owned sheep and beef farms. The topics discussed included financial returns, physical production, constraints to production and factors contributing to current production. Comparison was made between Maori owned and similar sized European owned properties.
This study identified 127 Maori owned dairy farms, 698 beef farms greater than 10 hectares in size for a total of 825 Maori owned pastoral farms. The distribution of these Maori owned farming enterprises is heavily skewed to the Far North district with 76% of all dairy farms and 88% of beef farms located in the Far North District. Maori owned dairy farms tend to be small in size. 65% are less than 100 hectares and 31% are below 50 hectares. Because of the small size, it is expected that many of these dairy farms will become uneconomic at some future date and will either be amalgamated or leased out to adjoining farmers or converted to gazing beef cattle. The majority of the Maori owned beef farms are small to very small: for farms above 10 hectare in size, 83% are below 100 hectares and 64% are below 50 hectares in size.
Financial analysis of the large scale sheep and beef farms indicates that gross farm incomes for Maori owned farms is 30% lower than the typical Northland farm. A major reason for this is the selection of conservative and moderately performing stock policies that are limiting farm income. For Maori owned farms, their physical and financial returns are similar to European owned farms that have similar stock policies. Farm expenses such as labour, fertiliser, repairs and maintenance are at similar levels between Maori and European owned sheep and beef farms. This is seen as a positive feature for ongoing sustainability of these farms.
Maori owned dairy farms operate under a lower financial return than a typical Northland dairy farm; eg: economic farm surplus is just 67% of the result for the typical Northland farm. A major reason for this is the lower level of development or intensification of most Maori owned farms. While farm intensification requires higher farm costs, under high product prices, the net financial returns are considerably higher too. Investment returns are seen to be very positive for Maori owned Dairy farms with return on equity at 19.8% for owner operated Maori farms in 2000/2001 year. This compares very favourably by being 4% higher than the typical Northland farm and being 33% higher than the typical New Zealand owner operator.
Small to medium sized Maori owned beef farms show positive physical ad financial results with cattle sales being just 19% lower than the typical Northland farm. The medium term sustainability looks positive with farm re-investment being at a high level: 75% of all farm apply fertiliser and across all farms, fertiliser averages $122 per hectare compared to $107 per hectare for a typical Northland farm. Substantial off farm income was recorded on 50% of small farms, averaging $42,600. But it is concluded that at least 80% of all small to medium farms have significant off farm income.
Identified constraints to production were labour, lack of education and training in new technologies, physical resource constraints on farm, land tenure and the struggle to source development finances. This inability to raise capital for investment into farms is seen as one of the largest limitations to improving physical productivity.
Publications
The only publication covering this research is the Report document itself: A study into the Physical and Financial production Status of Maori owned Farm and Horticultural Businesses within Northland and comparing them to European owned Businesses.
4.4 ICP 506
|
Programme Title: |
Farm Performance Variations |
Programme Leader: |
Peter Livingston |
Institution: |
AgFirst Consultants |
Summary
The study was undertaken to provide MAF with information to develop a better understanding of current farm performance (1998-2000) variation between Maori owned and non-Maori owned dairy farming businesses.
An existing financial database of Central North Island dairy farms was analysed to establish trends and variances over the years from 1998-2000. This was split into Maori and non-Maori operations to establish differences between the two groups.
The physical comparison between the two sample groups showed them to be very similar. Maori units were predominantly in 50:50 Sharemilker situations thereby limiting the return to the landowner in times of strong commodity prices and production. Non-Maori owned properties have traditionally put more funds back into items such as fertiliser, weed and pest and R&M however as the Maori owned farms intensify they too are focusing on these areas. Average EFS/ha over from 1998-2000 was $285 for Maori and $490 for non-Maori. Maori properties have predominantly conducted expansion improvement out of cashflow/other reserves where as non-Maori farms have borrowed this funding from financial institutions resulting in much higher liabilities.
Goal:
To provide MAF with information to develop a better understanding of current farm performance (1998-2000) variation between Maori owned and Non Maori owned dairy farming businesses.
Background
This project had been undertaken due to the lack of information available to Government surrounding Maori farming. Surveys of agriculture in New Zealand to date have not distinguished between Maori and non-Maori businesses or between Maori owned and general land. It is apparent through the limited analysis that has been completed to date, that there are distinct differences in both structure and farming focus.
Approach & Outcomes
AgFirst consultants had a client base of economic dairy covering the greater Waikato, King Country and Bay of Plenty/Rotorua areas. This consisted of a mix of both Maori and non Maori properties.
These two sample groups were split to form sample sizes of 20 non-Maori owned (23 in 2000) and 12 Maori owned properties (15 in 2000). Financial accounts for the relevant years were then analysed using AgFirst Developed software to establish averages for each sample. Further interpretation of the data was undertaken to fully explain the reasons for significant differences.
Adjustments were made to each sample to take into account the variations which occur through milking arrangements in place i.e. Owner/operator vs. 50:50 vs. Lower order.
There appears to be no significant difference between the groups in terms of physical performance. Average farm size, stocking rate, and productivity are similar, over the 3 years. There was a larger percentage decline in milk solids production per hectare in 1998/1999 and lower percentage decline in milk solids production per hectare in 1999/2000 that can be in part attributed to the stage of development associated with some large Maori owned units.
There is a large variance in milking arrangements between the samples. Most Maori owned units (83%) employ a 50:50 Sharemilker compared with (20%) in the non-Maori sample group. The milking arrangement has the largest impact on the return to the landowners in both groups, during this 3-year period. Under the 50:50 Sharemilking arrangement, the profit is shared between Herd owner and Land Owner compared to Owner:Operator or Owner: Lower Order Sharemilker where the profit largely remains with the Land Owner.
Maori owned dairy units appear to have expanded and intensified out of income or other available capital compared with non Maori operations where a higher proportion have borrowed such capital.
The average effective farm surplus after depreciation and management is approximately $285/ha for Maori and $490/ha for non-Maori businesses. Major differences lie in the share of profit due to the milking arrangement and significantly higher administration costs associated with Maori owned operations. The non-Maori owned units have traditionally put more back into fertiliser, R & M and pastures, although as the Maori-owned units intensify, it is apparent they have reinvested heavily in items directly affecting productivity. This was most apparent in the 2000 accounts analysed.
Non-Maori owned farms tend to have a much higher level of indebtedness, ($7,856/ha) c.f with Maori owned ($1,557/ha). Maori owned dairy farms have very high equity, (90%) compared with non-Maori (55%) operations and Non Maori business have a slightly higher return on capital (2.5% c.f. 1.8%).
Contact for Enquiries
Farm Monitoring Programme Manager
Monitoring and Evaluation
MAF Policy
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0623
Fax: +64 4 894 0741
Contact this person
