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• Agricultural Policy Reform
• Farm diversification
• Employment of women in the agriculture sector
• 2.7 Changes in the Rural Sector
• Rural population
• Employment — national and rural trends

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2.6 Agriculture in New Zealand

Wool, dairy and meat products have always been an important part of New Zealand’s earning ability (table 2.1). Agriculture, forestry and fishing still provide 64% (1994) of the value of New Zealand’s total exports.

In the year ending March 1996 New Zealand’s agri-food sector accounted for 15% of New Zealand’s Gross Domestic Product (MAF, 1996). The largest con-tributors are farming and processing. Their contribution to GDP in real terms grew faster than the New Zealand economy between 1987 and 1996, although the contribution of the farming sub-sector has declined slightly. The increase is occurring in the context of a growing New Zealand economy, with greater activity in all major sectors. Inputs to farm development, such as fertilisers and capital investment in equipment and buildings, have increased.

Agricultural Policy Reform

In New Zealand, the farming sector now has negligible subsidies. Assistance to New Zealand farmers was low until the 1980s, and while it then increased dramatically, it was low by world standards. However, the support policies of the seventies and early eighties shielded the rural economy from adaptation, increased transaction costs, and undermined its capacity to adjust successfully to international market demands.

Subsidies to agriculture were abolished in New Zealand in 1985. The reforms had immediate and widespread effect on agriculture and the rural economy: farm incomes fell, farm inputs costs (particularly fertilisers) increased, farm profitability declined, the farm debt burden rose, and land values fell. Farmers’ problems were compounded by low international prices for some agricultural products during the middle and late 1980s and increasing interest rates. The slower pace of reform for the manufacturing sector and the ensuing appreciation of the real exchange rate made the adjustment process of rural households more acute than the withdrawal of agricultural support would have caused on its own (OECD, 1997).

Within five years, however, the economy picked up, farm incomes had fully recovered and fears of a rural collapse never materialised. Rural population and farm households proved remarkably resourceful in adapting to the dramatic changes that swept the sector. Despite the hardships, few farmers were forced to leave the land. The rural economy and the agricultural sector as a whole have become more efficient, and competitive. Farmers have had to become more responsive to world price signals and to explore and develop new niche markets. Comparative advantage is allowed to operate and resources are allocated in a more rational manner than previously, thereby enhancing the diversity of rural economies (OECD, 1997). Government assistance is almost non-existent other than to provide limited welfare benefits to qualifying households following adverse events.

Largely in response to the new market-orientation of the agricultural production sector, the fertiliser and meat processing industries have also become more efficient. At the same time there is more competition and enhanced productivity in the finance, labour and transport markets. Rationalisation of service industries has improved the overall competitiveness of the rural economy (OECD, 1997).

Within the agricultural sector there are ongoing variations in performance in response to prevailing market trends. Reports on agriculture in the early nineties showed an optimistic outlook. For example:

One [farmer] explains how in 1985 he paid 24% interest on his bills and received $7 a lamb. This year [1993], he’s looking at up to $40 a lamb and 8.5% interest (Fogarty, 1994).

In the mid-90s, concern is again being expressed about the severe financial pressures being experienced by some sheep/beef farmers and pipfruit orchardists. It is thought that the resilience of sheep and beef farmers is lower than at the time of the previous significant downturn in 1986/87. Financial reserves are lower, and obvious off-farm income opportunities have been explored and taken up. Growth in the rural economy now largely depends on the creation of new enterprises.

Farm diversification

The response to these changes has seen even greater integration of ‘farming’ and ‘non-farming’ activities. While there has been growth in some of the smaller parts of the agricultural sector (for example, fresh and dried flowers, foliage, seeds, plants, fresh and processed vegetables — including new varieties, processed and fresh fruit), new developments outside agriculture are increasingly being seen as vitally important in maintaining and building the rural economy. These include home-stays, small businesses selling goods to locals, tourists and the wider export market (such as essential oils, woven natural wool rugs, wooden toys and furniture, wool and leather fashion garments), through to large scale tourism ventures such as ski resorts. Some of these new developments are discussed (in chapter 3) below.

Other forms of diversification, including major land-use shifts, have been referred to as a "quiet revolution under way in the countryside". All have the potential to impact on the economy of rural areas, and involve specific changes in women’s and men’s roles. Changes in land use include a 20% drop in sheep and beef farms in the past decade, a conversion from sheep and cattle to dairying (especially in Southland where there has been a rise of 22% in the number of dairy cattle between 1982 and 1993), fewer kiwifruit and more apple farms, expansion of planting of radiata pine plantations by individuals (as distinct from forest companies), and the growth of small-holding. Large areas of land near South Auckland, Christchurch, Tauranga, Napier-Hastings, Palmerston North, and through the Kapiti Coast are being sub-divided for small-scale farming and life-style blocks.

Employment of women in the agriculture sector

Another change in the agricultural industries is the increase in the numbers of female employees, and female business owners. In 1991 some 25,180 women living in urban as well as rural areas across New Zealand were involved full-time in the agriculture and livestock production industries (table 2.3). That is 25% of the full-time workers in this industry group were female — a major increase since the sixties. Of this group 51% were business owners (36% with no staff, 15% with employees), and 35% were wage and salary earners. The remainder classified themselves as ‘relatives assisting’ on the farm.

When part-time workers (fewer than 30hrs per week) are included, the number of women involved in agriculture and livestock production increased to 39,170 or 33% of all part-time workers in this industry group in 1991.

Female participation in the agricultural services shows a similar growth pattern to their involvement in production. By 1991 some 2,140 women were involved full-time in agricultural services (21% of the full-time agricultural servicing workforce, table 2.4) and another 3,620 women worked part-time. That is, 14% of the total number of people engaged full and part-time in agricultural servicing in 1991 were women.

A breakdown of the location of the 40,000 women whose occupation is ‘agricultural and fisheries worker’ shows that only 66% of the women involved in those occupations live in the country. A further 25% of the women are located in major urban areas, with the remaining 6% in minor urban areas and 3% in rural centres.

2.7 Changes in the Rural Sector

Economic adjustments over the past two decades have impacted on the rural sector in general and the agricultural industries in particular. These adjustments have been accompanied by social change, partly brought about by the economic restructuring, but also in response to the operation of long term processes of cultural evolution and attitude changes (such as those brought about by the feminist movement and recognition of the Treaty of Waitangi).

The mix of people now living in rural areas, particularly the growing numbers from non-agricultural backgrounds and who are not involved in agriculture, ensures that the attitudes and values of rural people are as divergent as those of urban residents. There is growing recognition of both the problems and advantages brought by a mix of values in rural communities. Locality studies identify friction or ‘distancing’ between visitors and residents (Campbell and Fairweather, 1991), long-term residents and newcomers, and between occupational groups (Smith, 1991).

While agriculture remains the cornerstone of the rural economy, people living in the countryside are becoming more dependent on a range of activities — some located within the area, some made possible by technology (eg fax and computers), and others made accessible by improved roads which enable rural people to commute to urban centres. This same technology has meant many services have shifted to urban service centres, but this does not seem to be affecting the structure of employment or the absolute numbers of people living in rural New Zealand. Locally, populations have diminished where they were dependent on one source of income (like mining, dam construction, pastoral production and meat processing) and have grown where there is a variety of activities.

Rural population

Rural areas make up 93% of New Zealand’s land mass — but only 15% of the population (515,000 people) live there. When minor urban areas are combined with rural areas the proportion of the population located outside the major centres rises to one-quarter of the total population. The scattered and uneven distribution of people across the landscape has important implications for how adequately rural people are supplied with business and social services, and how easily women can access services and maintain support networks.

Using 1986 boundaries to enable statistically valid comparison, the total population of rural New Zealand has been growing since the early seventies. At the local level, more rural areas have populations which are growing than are declining. Rural populations which grew between 1986 and 1991 were those close to urban areas or tourist hubs, and those experiencing growth in the retirement and leisure based industries (the Queenstown area, mid-Canterbury Plains near Christchurch, the Kapiti Coast and Horowhenua, the northern Bay of Plenty and Coromandel, and northern Northland) (Press and Newell, 1994). Population losses were experienced between 1986 and 1991 in areas reliant on pastoral agriculture or forestry employment (such as Southland, Wanganui, Tongariro, East Cape and the West Coast).

While men continue to outnumber women in rural New Zealand, the difference is declining as more women become economically self-sufficient and as it has become socially acceptable for single women and widows to live in rural areas (see appendix 1). The age structure of males and females living in rural New Zealand are very similar to each other, whether Maori or pakeha. The greatest difference is between Maori and pakeha, as the rural Maori age structure, like that of the general population, shows a young age profile (see figures 1A and 1B, appendix 1). The age structure of those living in the country tends to be slightly younger than that of urban areas. Minor urban areas have a very large retirement population. There has been little change in the female rural age structure between 1986 and 1991 (table 2.5).

Rural women are better educated than rural men: 38% had no formal school or tertiary qualifications compared with 50% of rural males who are over 15 yrs, and have left school (see appendix 1). While the same proportion of rural males as rural females held tertiary qualifications (43%), they were in very different subjects: women were mainly qualified in nursing or teaching, while men held technical and trade qualifications.

Employment — national and rural trends

The decade between 1981 and 1991 was a volatile time in New Zealand’s employment history. While full-time employment in New Zealand decreased by close to 14%, there was a considerable increase in part-time employment. In 1991 part-time work accounted for nearly 18% of the total workforce, compared with 8% in 1981. Overall male employment decreased by about 11% between 1981 and 1991. Female employment had risen by nearly 10% during the same period. In 1991 women comprised 43% of the paid workforce — an increase of 5% overall from 1981.

According to the census of population, a total of 14,376 full-time jobs were lost from rural areas between 1986-91, although 6,075 part-time jobs were gained (Press and Newell, 1994: 77-78). The full-time jobs lost were predominantly of males working in the sheep industry (9,546), followed by (3,000) males in the dairy industry. These losses were partly offset by gains in full-time mixed and other livestock farming, and in farming ‘not elsewhere classified’ (3,030 and 2,586 males respectively). Similar trends were reflected in the proportions of women losing or finding employment in these industries, although the absolute numbers of women involved were much smaller (reflecting the smaller female full-time paid work force). As hydro-electric dam construction projects reached completion, and the forestry industry restructured, employment of people in those industries who lived in rural areas (mainly male), also fell.

The changed market conditions also affected employment of rural people in manufacturing. Removal of the supplementary minimum prices saw a drop in stock numbers and this, together with the introduction of new technology, reduced labour requirements in the meat processing industry, a previously important employer for rural males in particular. This is reflected in a decline in employment of rural people in food, beverage and tobacco processing between 1986-91, a decline which is expected to continue after 1991. Job losses have tended to be greater in part-time than in full-time positions in this sector, contrary to the general trend.

However, while the agricultural sector continued to shed labour during the 1986-91 period, the relative contribution of community, social and personal services, business and financial services, and wholesale, retail, restaurants and hotels to total employment in minor urban and rural areas increased (Press and Newell, 1994). The growth in the proportion of rural people working in community servicing and in retailing/restaurants may reflect the growth in commuting by rural people to urban centres where such work is available, as much as the growth of these industries within rural boundaries. Alternatively, the statistics may reflect new business activities which are being started in rural areas, based on local resources, or on new servicing opportunities arising from the growth of new business such as tourism.

Between 1986 and 1991 the numbers and proportion of rural people involved in educational services (particularly women working full-time) increased (Press and Newell, 1994). During the same period, the numbers and proportion of rural women working in the health services remained stable or increased, while the involvement of rural men in this industry declined. This change could reflect a move from rural GPs (who are mostly male) to practice nurses (who are mostly female), as areas unable to attract GPs are allocated nurses under the government-funded Practice Nurses Scheme. The relocation of mental hospitals from rural to urban areas will have altered GP accommodation, and many health workers, especially women, who live in rural areas commute to work in urban centres (Taylor and Little, 1995).

Contact for Enquiries

Rural Affairs Coordinator
Sector Performance Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND

Phone: +64 4 894 0675
Fax: +64 4 4 894 0745
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