Abstract
New Zealand’s association with farming extends right back to the time of European colonisation with small farms dominating the economic landscape for the greater part of the country’s existence since the 1850s. While agriculture is still a significant contributor to New Zealand’s gross domestic product, the relative importance of red meat farming has been slowly reducing as other industries (both farming and otherwise) rise to prominence. Meat processor woes were well documented in their annual reports, but were farmers right in saying that it was getting progressively harder for them to make ends meet? If both the farmers and meat processors were facing profitability issues, was the future of the industry uncertain? It was to this end that a longitudinal dataset of financial and non-financial information relating to five-hundred plus farms across New Zealand was analysed. The dataset showed that profitability was low, asset values high and consequently return on assets was very low. It showed that not only were farmer complaints around profitability real, this was an issue that had existed for decades. If farmer profitability was a historical issue, then why had farmers not exited the industry earlier? The answer to this question lay in understanding the psyche of the New Zealand farmer, a task that was fulfilled by analysing the historical background of the industry and from discussions with a carefully selected panel of experts. Moreover, what did the low profitability and high land values mean for small family farms in the future?
The research, undertaken with a strong social purpose in mind, showed that a contraction in dedicated red meat farms was inevitable. There was also the possibility that the New Zealand landscape might change from one that was dotted with small family farms to one that was made up of large family conglomerates – a far cry from the ‘one farm, one family’ concept that built the nation. The question then becomes one for government policy – are small farms meant to be saved or will the free market economy take its course and irrevocably change the farming ownership landscape in New Zealand?