The impact on farmers of changes in rural servicing infrastructure : a thesis presented in partial fulfilment of the requirements for the degree of Master of Agricultural Economics at Massey University

Abstract

This study provides an overview of changes in rural servicing infrastructure over the period 1985 to 1990. The changes in infrastructure stem from 1984, when the then government changed economic policy to a dominant goal of economic efficiency. With this goal in mind government intervention in the provision and pricing of rural services has been rationalised with the transfer of many responsibilities to the private sector and the introduction of user-pays as a system of funding service provision. Concurrent with the changes in conduct and funding and in line with the goal of efficiency, government has endeavoured to minimise transaction costs, hence improving the environment in which rural services are traded.

This thesis identifies trends in the changes in rural services and studies the implications for farmers and local community of a continuation of these trends. The direct and indirect impacts of changes in rural services is assessed in both qualitative and quantitative terms where possible, at both the farmer and the community level. To this end measurement of qualitative impacts was attempted using the non-market valuation technique, contingent valuation. In addition to assessment of on-farm impacts, off-farm impacts are investigated using business directory data and by analysing changes in non-government services using a structure/ conduct/performance framework.

To obtain the information required, three survey's were undertaken. One of a large group of hill country farmers in the Wanganui area, one of non­ government services and a personal survey of farmers in the Mangamahu Valley. Business directory data which provides information on the number of servicing units and persons engaged in those services is used to assess the impact of changes in rural servicing infrastructure and government policy on the two communities of Raetihi and Ohakune.

The thesis concludes by showing that demand for rural services has declined, as has the supply of services. This decline was occurring prior to 1984 and has been accelerated by changes in rural service infrastructure since 1984. The decline in the demand for services and rationalisations has meant the loss of some services, but all are still available even if it means greater cost and travel. Most farmers have accepted changes as a gain in efficiency.