Monday, 26 May 2014

Occupational Confidence

Recently I received an email with this observation:
"It’s a bit ironic, really. Farmers and farm managers are the least confident, whereas food trade workers are the second most confident"
The observation was made to a publication by Roy Morgan Research into the Consumer confidence by profession, April 2014, Perk of the job or occupational hazard? Consumer Confidence by profession.

Let me explain why it is not ironic, really the lack of confidence is understandable especially after looking at these graphs that agricultural economist, Ben Rees, is very handy at putting together. Both are available in the paper, Reconstruct or Rationalize Agriculture?
In Chart 2 immediately below look at the red line and blue line.
Note the widening gap between Net Value Farm Production (NVFP) or in other words the dollars received at the farm gate and Gross value Farm Production (GVFP) or in other words how much agricultural production is worth to the economy.

The food trade workers are beneficial to that widening gap and their prospects have been rising every year.

Graph sourced:  Reconstruct or Rationalize Agriculture? Ben Rees; B. Econ.; M. Litt. (econ.)

Next look at the green line in chart 2; this is the real future killer for farmers - debt. The graph shows what many of us know in rural areas, that debt has got out of hand against what is received at the farm gate.

Then how are farmers able to service these increasing debt levels. In Chart 5 the story is told that would sink the heart of any optimist. The red line is the prices paid or the input costs to the farm, what the farmer has to outlay to keep the farm going. The blue line is the prices received or the farmers income.

No wonder there is a lack of confidence in the farm sector.

Graph sourced:  Reconstruct or Rationalize Agriculture? Ben Rees; B. Econ.; M. Litt. (econ.)

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