13 Jun 1983 Reduced inflation and lower taxation an incentive for farming

Reduced inflation and lower taxation would clearly be the most important expansion incentives for New Zealand farmers , according to the results of a survey just released by the Agricultural Economics Research Unit at Lincoln College .

The survey of New Zealand farmer intentions and opinions was carried out from October to December last year by Mr J . G. (John) Pryde and Mr P . J . (Patrick) Mccartin .

Mr Pryde is Research Fellow in Agricultural Policy with A. E . R. U. and Mr Mccartin is a research economist .

They sought to find the most effective expansion incentive on the farm , and 1540 farmers gave their views.

Nearly 46 per cent of the farmers said the best incentive they could get would be lower inflation .

Reduced income tax came a long way behind with just under 20 per cent of farmers seeing this as the most important incentive.

About 15 per cent of farmers said that an increased subsidy to reduce the price of fertiliser would be the most important incentive.

Cropping farmers and dairy farmers saw reduced income tax as more important an incentive than did sheep-beef
farmers.

Older farmers, rather than those under 35, looked to reduced tax, as an effective incentive.

However, only 9 per cent of the farmers who replied to the survey saw the level of income tax as a factor limiting farm output expansion.

Higher supplementary minimum prices were seen by only slightly more than three per cent of the farmers as an important expansion incentive.

Five per cent of farmers would like to see a reduction in cost of farm credit, but 12 per cent saw the cost of finance as being the chief limiting factor for expansion.

Other limiting factors were seen as the type of land and the size of farm.

Almost 60 per cent of farmers in the Wellington provincial land district saw reduced inflation as the most important
incentive, but only 36 per cent of Bay of Plenty farmers saw it this way.

Forty four per cent of farmers over 50 would like lower income tax, against 33 per cent of those under 50 years
of age.

After the cost of finance, the next two factors seen as limiting expansion were inadequate profits from expanded production (11 per cent), and the cost of additional farm inputs (10 per cent).

Other limiting factors cited were the type of land (8 per cent) and the size of farm (7 per cent).

Almost 30 per cent of dairy farmers wanted reduced income tax, as did 32 per cent of cropping farmers, but less than 10 per cent of sheep-beef farmers saw this as the most important.

The Survey of New Zealand Farmer Intentions and Opinions, October-December 1982 (A.E.R.U. Research Report No. 136)
can be purchased for $6 a copy, add 90 cents for postage, from the Bookshop, Lincoln College, Canterbury, New Zealand.