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Drought hits ageing farmers and poor performing farms the hardest


Jun 27, 2017
Author: Goyder Institute

 

Older farmers and those whose farms are high in debt with lower rates of return are more likely to intend to exit during times of water scarcity when the property market is more depressed, a Water Forum in Adelaide will be told.

The new research, from the Centre for Global Food and Resources, University of Adelaide, will be presented for the first time at The Goyder Institute for Water Research 2017 Water Forum, to be held in Adelaide on July 4 and 5.

Around 200 delegates across industry, government and academia are expected to attend the event, which will showcase South Australia’s world-leading water research and expertise.

Associate Professor Sarah Wheeler will present her paper on the impact of drought and water scarcity on irrigator farm exit intentions in the southern Murray-Darling Basin, using detailed ABARES irrigator farm survey data from 2,631 observations across 2006-2013.

The Centre’s research found a number of key factors impacting intentions to exit.

During drought years the key factors increasing decisions to exit farms include:

  1. Being older
  2. Receiving lower winter rainfall
  3. Having sold water entitlements in the past
  4. Being in a worse financial state, eg higher debt after a certain threshold, having a lower rate of farm return
  5. Being located in NSW Murray
  6. Horticulture and dairy farmers more likely to leave than broadacre
  7. Horticulture the most impacted by water scarcity issues

During non-drought years the key factors increasing decisions to exit farms include:

  1. Receiving less water allocations percentage in the past five years
  2. Having sold water entitlements in the past
  3. Being closer to a town (with at least 5000 population)
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