Dollar a high priority

It may not be the most popular view going around, but I was among many who were pleased to see the rain come yesterday.

Over the past couple of weeks there had been a noticeable browning of the countryside, and you could almost see the grass withering. In many areas of the country, serious concern was being expressed about the conditions and what that meant for farmers.

However, those who work the land are adept at developing systems to cope with whatever seasonal conditions prevail. What they are mostly powerless to control are the wild fluctuations in product prices and the exchange rate.

The summer dry, high kiwi dollar and drop in returns have led to a significant fall in optimism, particularly among sheep and beef farmers, who are particularly affected with Federated Farmers' latest farm confidence survey showing significant numbers expect returns this year to take a major hit. As if the exchange rate woes weren't enough, income for beef, lamb and wool has taken a major hit.

Dairy remains the more optimistic sector, with improving global prices and payout outlook driving an improvement.

There is some hope for the non-dairy farmers, with Federated Farmers meat and fibre head Jeanette Maxwell talking up the impact of the $65 million Collaboration for Sustainable Growth programme. Beef and Lamb is also looking to invest.

But any returns will be some time off, and farmers need relief now. As Federated Farmers president Bruce Wills says, they can't significantly boost production to offset lower returns.

As the country battles to get some economic activity and generate job growth, our primary industries have the ability to lift us out of the doldrums. But this pessimistic survey result should have us all questioning whether we can rely solely on the Canterbury rebuild to stimulate economic activity.

At a time when so much has been written and said about the Reserve Bank's influence on the economy amid housing market fears, farmers and other industries that rely on export returns are crying out for a dollar that gives them a fair crack in the global market.

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