Farm businesses are showing cautious signs of recovery while continuing to grapple with climate and cost pressures, according to the biannual NSW Farmers Business Sentiment Survey. 

NSW Farmers Principal Economist Samuel Miller said the new results highlighted where confidence was returning and where risks were intensifying across the state. 

“We’re seeing the good, the bad, the ugly and the beautiful in this data,” Mr Miller said. 

“Farmers surprised themselves with 23 per cent saying they had a year of positive growth, compared to only 2 per cent who were expecting things to get better in May. 

“But dry conditions are starting to weigh on more parts of the state, with 17 per cent (up from 5 per cent in May) of all farmers worried about water allocations. It’s worse in the Murray and Riverina areas, with 48 per cent worried about water (up from 15 per cent in May).” 

Despite the weather extremes, Mr Miller said overall improved conditions were giving farmers the green light to start investing again, with 40 per cent saying their capital expenditure would increase in the next 12 months, doubling from 19 per cent in May. 

“We asked a special question about the Primary Producer Exemption to Land Tax, which lets us take the pulse on timely issues without impacting our longitudinal results,” he said. 

“About 12 per cent of farmers indicated that they have avoided expanding or diversifying their businesses due to the risk of losing this tax exemption, which really drives homes the importance of governments letting farm businesses invest in value-adding to get ahead of seasonal and geopolitical challenges. 

“The good news is our advocacy team is already at work on this policy priority.”