Issues and Trends
Higher levels of profit than in previous seasons, combined with tax rate increases to 39%, have farmers concerned about managing their taxation. More trusts have been created.
Farmers are concerned over policies being implemented by the Labour Government. These include the Employment Relations Bill, changes to ACC, higher tax rates, and the increased `green' emphasis. Farmers are concerned about the impact the Employment Relations Bill will have on increased processing costs that will eventually be passed on to them.
Farmer confidence, morale, and optimism are high. This is mainly due to a favourable grass season and high livestock prices.
A successful 1999/2000 year has enabled revitalisation across the farm business. Deferred maintenance items are being addressed, including upgrading or replacing cattle yards. Family holidays are being taken, or are being planned.
Continued increases in bank interest rates are not causing too much concern. This is due to 50% of lending being at fixed interest rates, and the low borrowing requirement in the normally high interest rate current account.
Many farmers are using the present economic environment to upgrade their four-wheel-drive bikes. These are now a key tool for the future operation of the farm.
Surplus revenue is going into increased fertiliser, repairs and maintenance, rebuilding stock numbers and debt repayment. Fencing still ranks as a priority investment.
Farmers appreciate that the present favourable pasture and stock price scenario will not last. This is encouraging investments to strengthen the farm business for the future rather than expansion of farm area.
The top quartile of farmers recovered quickly from the 1998 drought and 1999 facial eczema years. The bottom quartile are still recovering, and have been unable to take full advantage of the favourable trading conditions existing at present.
At least 12 farms in this model have been on the market for quite a while, with little interest. However, sales have been made on up to five of these recently. The properties are all selling at close to government valuation.
There is a lack of skilled farm labour at all levels, from manager to casual staff. Many believe it stems from the poor image of farming perceived by young people.
Many of the properties in this model are located a distance away from the towns of Gisborne and Wairoa. Therefore, it is difficult to find off-farm employment.
There is general concern about the high level of rates in the Gisborne district. The cost of rates, at $1.56/su, is high compared to other districts in New Zealand.
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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
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