Issues and Trends
Trends in farm physical activities include: more cattle; more trading stock, and fewer breeding stock; less cereal crop; and a greater focus on nutrition and feed quality.
The last two mild winters have been appreciated by farmers, but they realise that another good winter is unlikely.
Farmers are aware of biosecurity issues, e.g., the varroa bee mite.
The role of biotechnology in agriculture, what biotechnology really is and what it has to offer, is not well understood.
Farmers are confused about the apparent popularity of organics. They are sceptical about price premiums claimed, especially the feasibility of organic livestock systems on hill country.
Farmers are awareness of greenhouse gas issues and the large contribution to methane emissions caused by ruminants. They are concerned that this could lead to restrictions on livestock operations in the future if Kyoto targets are to be met.
The improved season has given the rural community a much-needed confidence boost. It has confirmed better maintained and better managed properties are more responsive to an improved season and an improved trading environment. Importantly, the top 20% of performers are receiving a "payback" for the effort they have put in over the last five years.
The improved trading conditions have probably delayed the inevitable exit from the industry of the bottom percentage of business performers. However, it has improved their equity in the meantime.
Farming families are concerned about the continued erosion of services in the rural community, in particular power reticulation, telecommunications and roading. Telecom has indicated it wants to withdraw from servicing rural communities.
The gap between land values and earning capacity is growing larger again. It is both difficult to realise capital gain, and to expand the business. As a result, there is a greater reliance on leasing to expand the farming operation.
There is a lack of semi-trained and trained staff coming into the industry, which demonstrated by a chronic shortage of staff in the 18-25 age group. The number of young people entering the industry is still declining.
The ratio of labour units to stock units is decreasing. Fewer people are managing more stock and maintaining properties. This is placing more pressure on owner/operators.
Greater dependence on off-farm income is being experienced because of poor economies of scale.
Farmers have real concerns with the policy changes being implemented by the Government. Of particular concern are the Employment Relations Bill, Accident Compensation reverting back to the public sector, higher tax rates, and higher interest rates.
Farm businesses desire a "tax-averaging" system that will take the lows and highs out of the tax payment system for primary producers.
While the lower exchange rate has boosted export receipts, farmers are concerned about the low value of the New Zealand dollar and flow-on inflationary effects through increased prices of imported farm inputs.
Farm businesses envisage higher wage costs, fuel costs and related services, together with increased interest rates. Concern is expressed that the Government is focused on supporting the bottom end of society and funding this by taxing businesses. Farmers feel that government should be concentrating more on "making the cake bigger", and providing encouragement for businesses to grow.
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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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