Abstract

The environment facing pastoral farmers in New Zealand is much more risky than it was a decade ago. This has required primary producers to identify their sources of risk and to take measures to protect their businesses against these risks. A nation-wide postal survey of 1750 dairy, sheep and beef and deer farmers was undertaken in July 1992 to determine the importance which pastoral farmers attached to different risk sources and strategies for managing risk in the post-deregulation environment. Usable responses were received from 885 farmers. A follow-up telephone survey of non-respondents found no evidence of non-respondent bias. Farmers in all three groups considered business risk to be higher than financial risk, with changes in product prices being the most important risk source. Other important risks were changes in the world economic and political situation, changes in New Zealand's economic situation, changes in input costs (except for deer farmers), rainfall variability, pests and diseases (for deer farmers), changes in producer board policies (for dairy and deer farmers), changes in government laws and policies (for deer farmers) and risks associated with accidents or health problems. A range of management responses were used to combat risk. For all three groups of farmers, routine spraying and drenching and maintaining feed reserves were the most important risk management responses. Keeping debt low, managing capital spending and maintaining both short and long term flexibility in farming operations were also considered important. Sheep and beef cattle and deer farmers also consider the marketing responses of market information, spreading sale and having more than one enterprise to be important.

SK, Martin

Proceedings of the New Zealand Society of Animal Production, Volume 54, , 363-368, 1994