Farmer confidence returns

AFTER hitting its lowest level in nine years during the previous quarter, farmer confidence in Queensland is bouncing back, although sentiment remains relatively low, according to the latest quarterly Rabobank Rural Confidence Survey.

The survey - completed a month ago - found 22% of Queensland primary producers expected the agricultural economy to improve in the next 12 months (up from 11% the previous quarter). And the number expecting conditions to worsen had significantly declined - to 22% from 52% previously. Those expecting conditions to remain the same stood at 51%.

The Rabobank Rural Confidence Survey questions an average of 1200 primary producers across a range of commodities and geographical areas throughout Aus- tralia on a quarterly basis.

Of those Queensland farmers who expect conditions to improve, 47% cited favourable seasonal conditions as a major factor and 36% were optimistic about commodity prices - mainly driven by beef producers and sugarcane growers. Of those with the view the agricultural economy would worsen, 29% cited falling commodity prices. This was predominantly driven by graingrowers.

Following from the past quarter's survey - where factors outside the farm gate had a major impact on sentiment - 41% of producers with a negative outlook this survey cited government intervention and policies as a dampener on confidence levels in the farming sector and 28% nominated overseas markets and economies (up from 15% last survey).

Rabobank state manager for Queensland Brad James said it appeared the improved sentiment was driven by the positive short to medium-term outlook for the season and commodity prices.

"Many grain producers would have breathed a sigh of relief having harvested their 2011 crops, receiving generally solid to strong tonnages. This year's harvest has been a 'mixed bag' also with protein significantly lacking in most districts due to untimely weather conditions post-germination," he said.

Mr James said Queensland farmer confidence had been heavily influenced by government policy and intervention this year, with significant developments in this area impacting the sector. "Some certainty has returned for the beef sector with the reopening of the live cattle trade to Indonesia, under what many would argue to be improved conditions from an animal welfare perspective," he said.

Foreign investment was overall viewed negatively by Queensland farmers in the survey, with 47% considering foreign investment in Australian agriculture as a 'threat' and only 17% believing it to be an opportunity.

"There is significant concern, particularly in the southern areas, around the activity within the mining and resources sector on prime agricultural land, which may explain some of these results regarding foreign investment," Mr James said.

In terms of farmers' perceptions of their own enterprises, 36% expect business performance to improve in the next 12 months and 50% expect performance to remain stable. Just 11% expect conditions will worsen, down from 29% in the previous quarter.

Better gross farm incomes were reported by 39% of respondents, while 27% reported lower incomes.

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