Covid 19 coronavirus: Tractor sales down 60pc: Sector says jobs at risk

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The Tractor and Farm Machinery Association is calling on the Government to take urgent measures to help its sector in the face of plummeting sales.

Association president John Tulloch said he had written to the Minister of Agriculture Damien O'Connor requesting action to encourage farmers and contractors to invest in farm productivity this year.

Specifically, they want the Government to review its low value asset write-off limit to bring it up to at least the same level as Australia.

The New Zealand Government has temporarily increased the threshold to $5000 because of Covid-19, however the new Australian limit is $150,000.

"Five thousand dollars is far too low to assist the primary sector, where a new tractor can cost upwards of $100,000," said Tulloch.

The Minister recently stated that the Government was looking to the primary industries to help the economy recover from the pandemic fallout.

• Covid19.govt.nz: The Government's official Covid-19 advisory website

"However, our sector, despite literally keeping the primary industries moving, is facing job losses and business losses. We could see a repeat of the GFC crash that took us years to recover from" said Tulloch.

Covid-19 was negatively affecting contractors' and farmers' incomes, many of whom were also dealing with drought impacts.

This in turn was affecting their ability to invest in farm machinery and equipment. April tractor sales were down more than 60 per cent from April 2019 and without intervention this could be the sector's "new normal", he said.

"We will see flow-on effects such as the loss of competition within our sector plus barriers to farmers maintaining and obtaining tractors and machinery."

The New Zealand tractor and farm machinery sector is worth about $1.3 billion annually and provides 2500 jobs.

In 2018 and 2019 sales were finally back to the 2005 and 2006 annual tractor sales of more than 4000. The GFC crisis saw sales plummet by 45 per cent. It took the sector eight years to recover.

"If our sector declines by 45 per cent again it means the potential for the loss of 1200 jobs, within the primary industry that already needs 50,000 more workers. We are already facing a severe financial pinch through the postponement of the June face-to-face Fieldays where we receive a bulk of our orders" said Tulloch.

"We need urgent action from the Government now to enable our primary industry to keep investing in its future. Otherwise the country will feel more pain later."