Farmers doing better financially
Rural Australians and primary producers’ financial wellbeing on the up despite COVID-19 challenges, according to reportA new research by ANZ and Roy Morgan has found that farmers have experienced an improvement in their financial wellbeing since the onset of COVID-19, bucking the national trend.
The ANZ Roy Morgan Financial Wellbeing Indicator found that in the five-months to August 2020, farmers and farm managers’ financial wellbeing improved by 4.3 per cent, with the average score (out of 100) rising from 60.2 to 62.8. In comparison, the national average declined by 6.4 per cent, with the financial wellbeing score dropping from 60.7 to 56.8.
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Regional Australians also experienced a much smaller decline (0.7 per cent) in their ability to meet financial commitments, compared to a decline of 8.6 per cent experienced by those living in capital cities.
The report was based on an annual survey of 50,000 Australians that assesses financial behaviours as well as the psychological, social and economic factors that contribute to financial wellbeing.
ANZ’s Head of Agri Insights, Michael Whitehead, said there are numerous reasons for the improvements to farmers’ financial wellbeing this year, many of which are unrelated to COVID-19.
"Now that the drought has broken, farmers are not only enjoying more reliable crops, they have more grass for cattle and sheep, which means feed costs are also way down.
“At the same time, prices for a number of agri commodities are at record highs, driven by an increase in demand for cattle, sheep and dairy which can be partially attributed to panic buying during COVID-19, as well as strong export demand.”
Other insights from the report include, in the five months to Aug 2020:
- The number of farmers who described themselves as "Struggling" dropped by more than seven percentage points (from 12.8 per cent to 5.0 per cent), while the number of those who describe themselves as "Doing OK" increased by 12 percentage points (from 46.6 per cent to 58.7 per cent)
- Farmers improved their savings buffer, increasing the amount of income held in savings from 8.2 months to 9.3 months. The number of farmers who said they'd cut down their spending increased by more than six percentage points (from 64.4 per cent to 70.7 per cent)
- Attitudes towards money were also more conservative, with the proportion of farmers saying they'd prefer to invest in something with a safe return increasing 10 percentage points (up from 71.9 per cent to 81.6 per cent), and the number saying they’d like to be well insured increasing from 64.4 per cent to 77.1 per cent
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