Coronavirus: Call for 'urgent measures' to help farmers as tractor sales plummet

agricultural machinery, tractor wheels in a row

The group representing sellers of farm machinery is calling on the Government to take urgent action to help the agriculture sector during the COVID-19 crisis.

The Tractor and Farm Machinery Association (TAMA) says April tractor sales were down more than 60 percent from April 2019.

TAMA President John Tulloch has written to the Minister of Agriculture Damien O'Connor requesting action to encourage farmers and contractors to invest in farm productivity this year.

Specifically, it wants the Government to review its low-value asset write-off limit to bring it up to at least the same level as Australia. 

Tulloch said the New Zealand Government had temporarily increased the threshold to $5,000 because of COVID-19 however the new Australian limit was $150,000.

"Five-thousand is far too low to assist the primary sector, where a new tractor can cost upwards of $100,000," said Tulloch.

He said while the primary industry was widely tipped to help the economy recover from the pandemic fallout, it was facing big challenges.

"Our sector, despite literally keeping the primary industry moving, is facing job losses and business losses. We could see a repeat of the GFC crash that took us years to recover from."

COVID-19 was negatively affecting contractors' and farmers' income, many of whom are also dealing with drought impacts, he said

"This, in turn, is affecting their ability to invest in farm machinery and equipment."

There was concern that the fall in tractor sales could be the "new normal" without intervention. 

"We will see flow-on effects such as the loss of competition within our sector plus barriers to farmers maintaining and obtaining tractors and machinery."

The New Zealand tractor and farm machinery sector is worth about $1.3 billion annually and provides 2500 jobs. 

Tulloch said the GFC crisis saw sales plummet by 45 percent and it took the sector eight years to recover.

"We need urgent action from the Government now to enable our primary industry to keep investing in its future. Otherwise, the country will feel more pain later."

 A new $500,000 fund to help farmers and growers prepare their businesses to recover from drought as the economy gets moving again after COVID-19 was announced by Agriculture Minister Damien O'Connor this week.

The fund would provide advisory services that usually cost $5000 to equip rural businesses with professional and technical advice to help them recover from and better prepare for future drought.

"As we rebuild the economy following the effects of a global pandemic, we have an opportunity to build back better than before and factor in resilience for our productive primary sector," said O'Connor.

"So far this year the Government has invested $17 million to help drought-stricken regions recover from what many are saying is the worst drought in living memory."