Federated Farmers’ latest Farm Confidence Survey shows why farmers are gloomier:
Climate change policy and the ETS has topped the list of farmers’ biggest concerns for the first time since 2010, according to Federated Farmers’ latest Farm Confidence Survey.
Nearly a quarter of the 1,432 farmers who responded to the July survey said it was their No 1 worry. The second greatest concern was regulation and compliance costs (19%), followed by debt, interest and banks (10%).
“That result is hardly surprising, given analysis coming through that significant numbers of dairy and sheep and beef farms will be uneconomic if the government continues to pursue methane reduction targets that are far more stringent than are necessary to ensure there is no additional global warming,” Federated Farmers economics spokesperson Andrew Hoggard says.
“That’s coupled with concern that the targets, and government incentives for forestry, is driving blanket planting of pines on productive farmland, with huge long-term detriment to rural communities.”
Pertinent to the concerns about production losses to meet climate change targets, and costs if agriculture is put in the ETS, is that only 55% of farmers said their businesses were currently making a profit (similar to the January survey, 56%). The proportion of farms making a loss increased slightly by 2 points to 11.3%. And looking ahead, slightly more farmers expect their profitability to worsen than improve.
The July survey, conducted by Research First, found that the proportion of farmers who consider current general economic conditions to be good (24.9%) has decreased slightly over the last six months. The proportion who consider conditions to be bad remains lower, but not by much (21.3%).
Looking forward, the survey found the lowest level of confidence in the economy since July 2009, in the wake of the Global Financial Crisis.
“On that front, we’re no different to the gloom being expressed by the wider business community,” Hoggard says. “For us there is particular concern about the global uncertainty and instability arising from fallout from Brexit and US-China tensions and how that will impact on our key markets and export returns.”
All regions expect farm production to increase over the coming 12 months but they are mostly less optimistic than six months ago, with large falls in expectations for Auckland-Northland and Taranaki-Manawatu. Slightly more farmers expect to increase their spending rather than reduce it over the coming 12 months but this is also down on January’s survey.
And farmers continue to find it hard, if not harder than ever, to find skilled and motivated staff.
Climate change policy in the Zero Carbon Bill is based on emotion and politics rather than science; ignores the Paris Accord’s stipulation that mitigation shouldn’t come at the expense of food production; and will come at a high economic, social and environmental cost.
Regulation and compliance costs are rising.
Interest rates are low but banks are putting a lot of pressure on farmers to reduce debt.
Dairy and arable farms, orchards and market gardens have been struggling for good staff for years, sheep and beef farms are also having problems now.
Add to that the concerns shared by the wider business community and farmers have good reason to be gloomier.
The full survey report is here.