Sharechat Logo

NZ farmer confidence falls to weakest level in 6 years due to government policies

Wednesday 1st August 2018

Text too small?

New Zealand farmer confidence has fallen to the lowest level in six years amid uncertainty over government policies.

A net 39 percent of farmers surveyed were pessimistic about general economic conditions over the next 12 months, a deterioration from a net 34 percent who were pessimistic six months ago, and a net 16 percent who were optimistic a year ago, according to the latest Federated Farmers July Farm Confidence Survey. The latest reading is the lowest level of confidence recorded in the survey since July 2012 and a five-fold increase in pessimism in the last 12 months.

Weakening farmer confidence echoes business sentiment surveys showing growing pessimism about the country's economic fortunes under a new administration. Yesterday's ANZ business outlook survey showed New Zealand business confidence reached a 10-year low in July, with headline confidence and firm's views of their own prospects dropping.

"There seems to be a fear factor at play here," said Federated Farmers vice-president Andrew Hoggard. "Farmers are feeling very uncertain about what the coalition government will do next on key issues such as water regulations, climate change and industrial relations."

Still, Hoggard noted that pessimism about the economic outlook is a sour note among the otherwise generally positive indicators in the latest survey, with farmer optimism increasing in all areas except their continuing negative perceptions of the economy.

"We should take heart that perceptions of farm profitability, production and spending have become more positive, and that farm debt levels have dropped slightly since the January survey," he said.

Expectations for farm profitability over the next 12 months are up slightly, with 30 percent anticipating an improvement and 48 percent expecting profits to remain stable.

Dairy and arable farmers are noticeably more optimistic about profitability than they were in the January survey. However, meat and wool farmers are noticeably less optimistic, perhaps reflecting a concern that the past season’s excellent farmgate prices might not be sustained this season, he said.

In a ranking of their greatest concerns, regulation and compliance costs remains the top issue, and the survey noted heightened concern about pests, diseases and biosecurity, thought to be driven by the stress and uncertainty caused by the campaign to eradicate the cattle disease Mycoplasma bovis.

Climate change policy and the emissions trading scheme was the third biggest concern, reflecting farmer uncertainty over the government’s more ambitious approach to reducing greenhouse gas emissions, and concern that agriculture biological emissions may be included in the ETS even though there are - as yet - no significant mitigating actions farmers can put in place, Hoggard said.

The July online survey received 1113 responses from farmers in four industry groups over 24 provinces.

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Auckland houses sales jump from 2017 lull in November
RBNZ expects house prices to rise
CBL Insurance placed in liquidation
NZX spring cleans its rule book, market structure
NZME pulls plug on Stuff merger
Net migration falls as growing number of migrants pack their bags
Stuff the laggard among Fairfax businesses
NZX challenges Elevation to call special meeting
Govt announces $27.4M PGF spend for Rotorua
Building activity falls short of expectations in June quarter

IRG See IRG research reports