15 June 2004

Farmer confidence in rural directions

Revelations that farmer confidence has had its biggest jump in optimism in the history of the Rabobank survey should be no surprise, Rural Affairs Minister Jim Sutton said today.

The majority of those surveyed in the ACNeilsen/Rabobank survey did not believe the economy would deteriorate over the next 12 months. The key confidence indicator of farmers' investment intentions has also risen, with 84 percent of farmers expecting to increase or maintain investment in stock, plant and land. Over half of all farmers now expect their income to rise.

Mr Sutton said the unnaturally large drop in the last survey was mainly because of its timing.

"It came as unseasonal storms had caused hundreds of millions damage throughout the North Island and the top of the South Island, the dollar was high against other currencies, and

He said the boost in optimism reflected farmers' appreciation of the Government's agricultural recovery package and a Budget that increased biosecurity funding again, a vital area for the rural economy.

"Funding for negotiating trade agreements with Thailand and China was also increased. Farmers know that the Government's work in trade negotiations directly boosts their income. "

Mr Sutton said rural people, like other New Zealanders, benefited from the measures in the Government's latest Budget and in other measures aimed at improving people's lives. Increased spending in health and education, and the continued expansion of services such as Heartland Service centres and broadband internet into the regions would have a positive impact for many rural people.

"Rural people recognize that the Labour-led Government has acted to help them, and it will continue to do so."

ENDS

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