Feds make case for rural bank lending probe
Bankers have been making record profits in the last few years, but those aren’t the only records they’ve been breaking, says Federated Farmers vice president Richard McIntyre.
Of over 1,100 responses from farm businesses across New Zealand, 65.2% considered current economic conditions to be bad.
It marks a 17.4% rise in the number of farmers who believe the economy is in a bad state than the July 2022 survey.
It also marks the lowest level of farmer confidence in the 27 biannual Farm Confidence surveys Federated Farmers has conducted since 2009.
81.8% of farmers expected economic conditions to deteriorate over the next 12 months, 0.9 points down on the July 2022 survey.
"It’s not just inflation and rising farm input costs," says Federated Farmers president and economic spokesman Andrew Hoggard.
Asked to list their top three concerns, those who took part in the survey put climate change policy and the Emissions Trade Scheme at No 1. Debt, interest costs and bank pressure leapt to second place and at No 3 is regulation and compliance costs - a catch-all for the wave of reform, regulation, red tape and costs swamping the sector.
"Just one example - proposed replacement resource management legislation. It took 30 years for the existing RMA and amendments to swell to a bloated and tortuous 800-plus pages. The call was for something simpler, less cumbersome and costly but the proposed new legislation is just as lengthy," Hoggard says.
The survey found the four highest priorities farmers want the Government to address were Fiscal Policy; Economy & Business Environment; Regulation & Compliance Costs; and Supporting Agriculture & Exporters.
Faltering confidence means less investment in farm improvements and production, and lower spending in the provinces. The January survey registered a steep decline in profitability, with a net 28.4% of respondents reported making a profit currently, down 26.7 points on July 2022.
Looking ahead, 5.4% of respondents expect their production to decline over the year (4.9% down on six months ago) and 24.1% thought their spending would increase over the next 12 months, down 30.5 points on the July finding.
