He said farmers were also facing “an unprecedented level” of regulatory change that had heaped on costs, undermined profitability and created uncertainty.
“Unfortunately, all of these challenges have arrived at the same time, which just compounds the pressure farmers are feeling – it’s just not sustainable.
“We have real concerns about farmer wellbeing and what this might mean for farming families and rural communities.”
Langford said this could have a knock-on effect on the wider New Zealand economy.
“When farmers aren’t profitable or feeling confident, they stop spending money and try to cut any costs they can from their business, and the implications of that flow right through the economy.”
The survey found the four biggest concerns for farmers were debt, interest and banks, regulation and compliance costs, and climate change and Emissions Trading Scheme policy.
“This is the second successive farmer confidence survey to set a new record low, with a steep decline over the last six months – so we’re sounding the alarm,” Langford said.
Listen to Jamie Mackay interview Wayne Langford on The Country below:
“This should serve as a wake-up call for all political parties, banks and processors that something needs to urgently change.”
He said there needed to be “a real focus” on reducing the costs and the uncertainty farmers faced.
Federated Farmers recently released a roadmap for restoring farmer confidence with 12 policy priorities for the next Government.
“I’d suggest politicians may want to re-read it,” Langford said.
The survey’s findings
- 81 per cent of respondents considered the current economic situation to be bad. 1 per cent considered it to be good. This results in a net rating of negative 80 per cent. That’s 15 points worse than in the January 2023 survey, when a net negative 65 per cent score. This is the lowest level of confidence in economic conditions recorded in Federated Farmers surveys that have been conducted twice a year since 2009.
- 29 per cent of respondents reported making a profit, and 27 per cent reported making a loss, resulting in a net 1.8 per cent of respondents currently making a profit. This is a sharp decline from July 2022 when 72 per cent were making a profit and only 3.5 per cent were making a loss.
- Profit was lowest in the meat and wool sector.
- 3 per cent of respondents thought economic conditions would improve in the next 12 months compared to 73 per cent who thought they would worsen. This results in a net-confidence rating of negative 70 per cent. Federated Farmers said that, while this was a little better than January’s result, it was only because more people thought it would stay the same, rather than any pick-up in those thinking it would improve.
- A net 70 per cent of respondents expected their profitability to decline over the next 12 months (4 per cent expected it to increase, while 74 per cent expected it to reduce), 3 points worse than January.
- 22 per cent of respondents expected to reduce production in the next 12 months while only 14.5 per cent expected it to increase. This results in a net negative 7.5 per cent score for production expectations. It is the third survey in a row where production expectations have been negative.
- 45 per cent expected to reduce spending in the next 12 months compared to 35 per cent who expected to increase spending. This results in a net negative 11 per cent score for spending expectations.
Farmers’ greatest concerns
- Debt, interest and banks
- Regulation and compliance costs
- Climate change policy and the Emissions Trading Scheme
- Farmgate and commodity prices
Farmers’ top priorities for the government
- Economy and business environment
- Fiscal policy
- Disaster recovery
- Climate change policy and the Emissions Trading Scheme
