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INSIDE Page 3
August 2014
Low use but high gains from farm consultants
NZPork signs By Kent Caddick biosecurity Although professional help with farm management is partnership very important to many farmers, most do not employ Page 8
Love of wool a family affair
Page 18
Farming for tourism
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a consultant, even though an analysis of profit data shows farmers who do receive $4 return for every dollar spent. This is just one conclusion from research being conducted by Lincoln University’s senior lecturer in Farm Management Research, Dr Kevin Old, and research fellow, Dr Peter Nuthall. Last year more than 2000 farmers were mailed a questionnaire which sought opinions and preferences with regard to farm succession and governance. A response rate of 36% was achieved. Dr Old said with this response rate being greater than the norm, that it was clear that farmers were interested in the topics covered. “With the decisions made by farmers having a significant impact on New Zealand’s economic wellbeing, it is important to know how farming decisions are made, particularly when it comes to ascertaining how farm management skills could be improved.” He said most farmers have the potential to access farm consultants, but the results found that only a small number actually utilised such services on a regular basis.
“The average use across all farmers was 21 hours per annum, however, over half the farmers surveyed use less than 10 hours per annum, which indicates infrequent or irregular use. At the upper end of farm consultant use, just 4% used more than 70 hours per annum — equating to nearly six hours per month. The research showed that young farmers (those under 35 years) tend to use consultants more (an average of 42 hours per annum) compared to relatively older farmers. “For instance, for those over 55 years of age, the figure is 21 hours per annum. However, these are averages, and many farmers will not employ consultants at all.” It was found that farmers with a net farm investment of less than $5 million paid $1,330 per annum on average. In contrast, farmers with a net investment of more than $25 million spent $17,700 per annum on average. “When all farm sizes were averaged out, it was found that
dairy and crop farmers spent the most on consultants, $4,240 and $5,800 per annum respectively. This is perhaps unsurprising as crop farms have important decisions to make each year regarding selecting crop mix.” The researchers considered whether a lack of trust was one reason for the relatively low use of consultants. The research showed 56% of the farmers rated their trust in consultants at 1 or 2 on a 5 point scale (with 1 being good and 5 poor). “The remaining 44% were ambivalent or worse when it came to trust in consultants. In fact, the average score overall was 2.42, which strongly suggests an overall ambivalence.” Dr Old said from their research it would appear that strategic decisions are largely made by the farmers themselves even if some ‘trusted person’ discussions occur first. “Clearly professional help is very important to some farmers, although most do not employ a consultant. They rely on their own experience and
Lincoln University’s senior lecturer in Farm Management Research, Dr Kevin Old is surprised at the low use of farm consultants given the potential they have to increase farmer’s returns
observations, and on discussions with family and ‘trusted persons’.” He said it appeared that risk factors are seen by farmers as problematic. “When asked whether they wanted help in controlling risk, the average score, again on a five point scale, was 2.6. Expressed differently, 52% noted they needed help. “With profit data analysis showing that farmers who employed a consultant received $4 for every dollar spent, the question is raised as to why more farmers don’t utilise these services.
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“It is perhaps worth noting that this dollar figure is an average, meaning some farmers would receive more while others less. Also, the analysis does not consider a farmer’s inherent skill or objectives. Some, for instance, may be content with their current situation.” Overall, the researchers concluded that any initiatives concerned with improving farmers’ managerial ability should focus on the farmers themselves in light of the fact that they tend to make most of their decisions without professional assistance.