Outside influences worry farmers: Survey

23:33, Jun 13 2012

Agribusinesses are most concerned about issues they can't control, according to an ANZ survey of farmers and agribusiness owners released at National Fieldays.

Four of the top five issues are ones over which farmers have little or no influence, such as exchange rates and the end-price of their products, ANZ managing director of commercial & agri Graham Turley said.

The bank included the opinions of farmers and agribusiness owners for the first time in its annual study of privately-owned businesses - the ANZ Privately-Owned Business Barometer.

Releasing the "Agri Insights" part of the Barometer, ANZ said the survey provides critical insights into a key sector of the New Zealand economy. About 750 farmers and agribusiness owners contributed to the survey during February – March. 

The Barometer shows that issues of growth, planning, people and change were tightly inter-woven in the agri-sector. Farmers spoke of the challenges of managing immediate issues, such as weather, commodity prices and exchange rates, while also addressing long-term management and ownership issues. 

Almost a third of farmers say government regulations and processes are of concern, Turley said. As with non-agri businesses they said the time and cost required to comply detracted them from their core business. 


Policies such as the Emissions Trading Scheme, Resource Management Act and the Dairy Industry Restructuring Act were seen as skewed against the agri sector, he said.

Now in its sixth year, ANZ Privately-Owned Business Barometer questioned 4870 business owners overall from different parts of the economy about the issues affecting them, and their views on the challenges ahead. 

The main agribusiness concerns raised in the survey were:

By comparison, the main concerns noted by non-agri businesses were:

The only consistent issue of concern between agri and non-agri businesses was balancing family and business interests, Turley said.

One of the most pressing long-term issues faced by farmers was how to successfully pass the farm along to the next generation – how to keep the farm in family hands, but in a way that is fair and ensures the future viability of the business.

"Simply handing over the farm to a son or daughter and retiring from the business is becoming increasingly problematic for many farmers," Turley said.

"Today, like all New Zealanders, farmers are living longer so they want to ensure the farm is a sustainable business that generates an income long term."

About 90 per cent of farmers surveyed considered their farm a family business, and 71 per cent want to sell the business to the next generation. Progressive involvement of the next generation of family was favoured by 53 per cent of those surveyed, and 47 per cent have family working for the business. 

In some cases, farmers did not want their children to feel obliged to take over the farm, and were having to balance their desire to keep the farm in the family while allowing their offspring to follow their own path. 

"What we’re seeing is farmers exploring new models of succession that ensure the business stays strong and all involved members of the family, including themselves, derive a long-term benefit from it, and have a level of involvement they are comfortable with." 

Family farms that have made the transition to long-term sustainable business were generally high-performing businesses that were disciplined and willing to engage all stakeholders in discussions about the future. 

"Farms that are in a good financial position often have fewer succession issues. Many of these owners recognise the need to involve advisers and managers in the business to inject new ideas, maximise performance and introduce new systems." 

Other key points from the agribusiness part of the Barometer:

60 per cent of farms were purchased more than 20 years ago. 

44 per cent of farmers cited exchange rate movements as the main issue of concern for their business.

84 per cent expect positive growth in the next 12 months. 91 per cent expect positive growth in the next three years. 

71 per cent are looking to increase farm production. 24 per cent are looking to acquire more farmland. 

57 per cent of farmers use an adviser – usually an accountant (83 per cent). 

64 per cent of farmers prepare an annual budget. 

40 per cent have no plan for the future of the business. Only 10 per cent have a formal plan in place. 

91 per cent consider their farm a family business. 71 per cent want to sell the business to the next generation. 

29 per cent say government red tape is of concern.

Waikato Times