Farm businesses in New South Wales are showing cautious signs of recovery, although climate variability and rising costs continue to present challenges, according to the latest NSW Farmers Business Sentiment Survey.
The biannual survey indicates that confidence has improved in some areas while concerns have intensified in others. NSW Farmers Principal Economist Samuel Miller said the results reflect a mixed outlook across the state.
According to the survey, 23 per cent of farmers reported a year of positive growth, compared with just 2 per cent who expected conditions to improve in May. However, dry conditions are becoming a growing concern. Seventeen per cent of respondents said they were worried about water allocations, up from 5 per cent in May. In the Murray and Riverina regions, this figure rose to 48 per cent, compared with 15 per cent earlier in the year.
Despite weather-related pressures, improved market and operating conditions appear to be supporting renewed investment. The survey found that 40 per cent of farmers expect to increase capital expenditure over the next 12 months, up from 19 per cent in May. This suggests a more optimistic outlook for farm investment, even as seasonal risks remain.
The survey also included a targeted question on the Primary Producer Exemption to Land Tax, aimed at assessing its influence on business decisions. Around 12 per cent of farmers indicated that concerns about losing the exemption had led them to avoid expanding or diversifying their operations.
The findings suggest that tax policy settings may be affecting farm investment and diversification decisions, particularly at a time when producers are facing increased exposure to climatic variability and broader geopolitical pressures. Respondents highlighted the importance of policy certainty in enabling businesses to pursue value-adding activities and long-term planning.
Overall, the survey paints a picture of gradual improvement in farm business sentiment, tempered by ongoing concerns around water availability, climate conditions, and regulatory settings. While a growing number of farmers are reporting improved performance and increased willingness to invest, the results underline the uneven nature of the recovery across regions and sectors.
For more information:
Eliza Fessey
NSW Farmers
Tel: +61 (0) 427 411 220
Email: [email protected]
www.nswfarmers.org.au
