Farm debt pressures being surveyed

Media Release

23 July 2015
- for immediate release

Farm debt pressures being surveyed

Lincoln University researchers want to know how farmers and their families are dealing with being in debt and the stress it can bring.

Bruce Greig, Dr Kevin Old and Dr Peter Nuthall, from the University’s Faculty of Agribusiness and Commerce, are conducting a nationwide survey investigating farm debt and the level of anxiety experienced by farmers who incur it.

Mr Greig says they want to discover how they manage debt as it is one of the many skills farmers require.

“Farming in modern times is very capital intensive. Many farmers rely on debt to finance these investments. Using leverage has helped many farmers achieve their goal of farm ownership, and wealth creation.”

“However, given most production units are family businesses, debt issues can impinge heavily on both the farmer and the farmer’s family,” Mr Greig says.

He says there is currently significant attention on the farming debt situation, particularly in dairying. The concern is mostly about the consequences of high debt relative to the current profitability of farming, and primary production in general.

“Currently little is known about farmer practices in this regard and the research will help better understand the farmer and family issues surrounding debt.”

The research data will be gathered by a nationwide postal survey with a questionnaire posted to 2300 farmers yesterday, 22 June.

The sample is randomly selected from all regions, farm types and sizes and the survey is being funded by Lincoln University.

Mr Greig says the results will provide critical information to the development and planning of primary production in New Zealand.

“As farms become more and more substantial businesses, debt issues will drive much of their thinking in both expansion, and consolidation plans.”

The survey asks farmers to assess a range of statements giving their views of their particular situation.

“Answering the survey requires ticking boxes and providing a few figures such as farm size. It’s simple to answer. Results of the survey will be widely distributed throughout the farming press, and the results will be on the internet.”

He wanted farmers to take the full estimated 45 minutes to reply so the results would be more comprehensive, and to send it back.

“The more farmers who reply the more useful the results will be.”

The researchers bring a range of skills to the area.

Mr Greig teaches farm management and has research interests in farming systems, farm business management and farm profitability.

Dr Old has spent many years studying governance and succession and has considerable practical experience in those areas, while Dr Nuthall has analysed many survey data sets particularly in the areas of managerial ability and farm computer use.

ENDS

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