Times have been tough in Taranaki for 50/50 sharemilkers seeking new contracts for the 2010-2011 dairy season, which starts on Tuesday.
The rural movers and shakers in the province say there is a shortage of jobs and point to a number of reasons, including: blaming the banks, saying the lack of activity in the rural sales market is killing opportunities for sharemilkers.
Some farming leaders say farmers are appointing farm managers instead of remaining in the time-honoured sharemilking system that leads to farm ownership.
Others think the lack of jobs is part of the normal rural cycle of the number of applicants exceeding the positions available, and vice versa. Mr McDonald said fewer than 30 farms had sold in Taranaki in the past 12 months, compared with the normal figure of 160 to 180.
"Banks have shut up shop as far as rural lending is concerned. They've tightened their criteria to such an extent that no-one's budgets work reports The Taranaki Daily News. The extent to which credit has been reduced in the rural sector can be seen in the chart below.
Interest in the rural market was strong, and there were good properties for sale. Federated Farmers Taranaki president Peter Adamski agreed the lack of farm sales was preventing sharemilkers moving through the system. He said banks had reverted to their former policies for debt-equity ratios.
In the property boom a couple of years ago, people could borrow 80 or 90 per cent of the farm price, but now banks required purchasers to have half the price in cash or assets.
Sharemilkers unable to find positions on farms had had to sell stock, with some facing big losses, particularly if they had paid up to $2,000 per animal in the last two years and had sold it this year for less than $1,000.
Sharemilkers who sold their stock and moved to town because they were unable to find new positions represented a loss the dairy industry could not afford, he said. Taranaki Federated Farmers sharemilkers' chairman Paul Davidson said there was a national shortage of 50/50 sharemilking positions.
"Farm owners are now focused more on the bottom line than on helping out young farmers. They're putting on managers instead of 50/50 sharemilkers."
"With the shortage of 50/50 sharemilking positions, more young farmers were entering equity partnerships, perhaps in conjunction with variable order agreements, as a pathway to farm ownership. Variable order sharemilkers unable to obtain 50/50 positions for the new season were retaining their jobs or going back to being farm managers," he said.
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