Tuesday, April 23, 2024

Farmers’ confidence on the rise

Concerns about high interest rates, poor commodity prices and excessive red tape are weighing heavily on farmers, but rural confidence has risen from last year’s record lows, the latest Federated Farmers’ latest Farm Confidence Survey has shown.

Federated Farmers national President, Wayne Langford says there’s been a positive shift in the rural mood since 2023, when confidence reached its lowest point in the survey’s 15-year history.

“It’s good to see the first improvement in farmer confidence for quite some time now,” said Mr Langford.

“I want to be clear that it’s only a slight improvement and it’s coming off a very low base. I wouldn’t say farmers are feeling more confident yet – they’re just feeling less unconfident.

“Confidence is no longer going backwards, but it’s still in the gutter.”

The survey identified farmers’ biggest concerns right now as: debt, interest and banks; farmgate and commodity prices; regulation and compliance costs; and climate change policy and the ETS.

Langford isn’t surprised to see interest rates came out as the top concern.

“I’ve spoken to a lot of farmers who are getting work off-farm just to make ends meet. It’s exactly why Federated Farmers have been calling for an independent inquiry into rural banking.

“Farmers need to know why interest rates for rural lending have gone up so much more than for residential. That margin between rural and residential has shifted significantly and it’s left farmers feeling confused and frustrated.

“An inquiry would provide that transparency and give farmers some confidence that they’re at least getting a fair deal from their bank.”

Compared to last July, the January 2024 survey shows more farmers expect their production and spending to increase, and fewer farmers expect their debt to increase, in the 12 months ahead.

Mr Langford says there are a number of drivers behind the confidence recovery.

“Inflation is slowing, interest rates are high but have hopefully peaked, and commodity prices – at least for dairy – seem to have stabilised,” he said.

“We’ve also seen a change of Government in the last six months, with a real commitment to roll back some of the more impractical and expensive regulation that’s undermined farmer confidence.”

He’s optimistic this is the start of a genuine, steady increase in confidence.

“I think we will see confidence continue to lift in the year ahead, helped by an easing of unnecessary regulatory pressure on farmers.

“Federated Farmers is working hard with the new Government to reduce that burden, like fixing unworkable freshwater rules.

“It’s all about cutting red tape, making compliance on-farm easier, and getting our primary sector humming again.”

He encourages any farmers who may be struggling to reach out for support.

“Even though we’re talking about a slight confidence lift, it’s still extremely tough for farmers out there, so please reach out to the likes of Federated Farmers and Rural Support Trust if you need help.”

Read the January 2024 Federated Farmers Farm Confidence Survey results at fedfarm.org.nz/FarmConfidence.

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