Results from a comprehensive survey of Victorian farmers, undertaken by Rural Finance , showed more than half of respondents were confident that general economic conditions will improve over the next 12 months and 46% believe the agricultural economy will also improve.
The survey was conducted during September 2009 and looked at farmer confidence levels as well as the most important issues confronting agriculture and the agricultural economy. With over 60 years experience working with farming families to invest wisely in the future, this survey was another tool to help Rural Finance understand farmers needs.
The confidence levels of farmers reflect that while some commodity prices are low and some parts of the state still had irrigation issues, farmers believe the future of the agricultural economy is promising, particularly given ongoing world food shortages.
Rural Finance chief executive officer Mr Dugald Graham said the survey identified that water supply was the most important issue facing farmers in the future, followed by drought, interest rates, farm profitability and climate change.
“The issue of climate change is still contentious among the farming community with the survey showing just over half of the respondents believing climate change is a reality,” Mr Graham said.
Mr Graham believes this reflects a strong farm community view that the current extended dry conditions are part of normal seasonal cyclical events, however he also suspects that as these conditions continue the support for climate change will grow.
The survey also showed that 45% of respondents have a family member earning off-farm income.
“Due to the difficult conditions that we have experienced this century across many parts of Victoria, we have found that off-farm income is making a significant contribution to the overall income base, particularly in the younger generation and understandably those with lower farm income. The majority of off-farm income is earned from rural contracting or a trade but 10% are also earning income from off-farm investments,” says Mr Graham.
Another set of findings showed half of the respondents indicated that their debt level had increased over the last five years primarily due to the purchase of land or due to drought.
Farmers’ enthusiasm for owning land has not been dampened by high land prices, with respondents saying they would rather buy than lease land. Mr Graham said this is supported by Rural Finance statistics, with more than one third of loans provided by the company being used to assist in the purchase of land in the last financial year, thus reflecting the continued strength of the family farming operation within Victorian agriculture.
Looking forward to the next five years, 20% of respondents indicated confidence in agriculture by planning to increase their debt mainly through land, plant and equipment purchases.
Mr Graham said Rural Finance also has confidence in the future of agriculture not just as an organization but also because many staff are actively involved in farming, thus helping Rural Finance to stay responsive to the needs and requirements of farmers.