Report: rural contracting experiencing huge growth

David Kean
David Kean
DIY may be part of our DNA, but more and more farmers are going the way of outside rural contractors, avoiding high initial capital outlay for specialist equipment and ag-services.

The result has seen prolific growth in the rural contracting sector over the past two decades, with a near doubling in size and a contribution to GDP now valued at $1.5 billion.

According to the industry's latest Infometrics report, the rural contracting sector employed 23,000 people at top of last season, or around 1% of the country's workforce. Of that, Otago and Southland account for around 2100 contractors, while Bay of Plenty is the biggest regional employer in this area, at 5400. It is an average of about 3.3 staff for each of the 6822 registered contractors. Last year nearly 700 new staff joinedthe industry.

Rural Contracting NZ (RCNZ) CEO Roger Parton said the numbers confirm the strength of the sector, which has grown at five times the rate of agriculture and four times the rate of growth in farming economic outputs.

The Infometrics reports shows that the rural contracting industry grew by around 4% per annum (pa) for the last 18 years, while the agriculture industry (excluding rural contracting) and the national economy grew by 0.8% pa and 2.7% pa respectively.

During the same period employment in the rural contracting industry grew by an average of 4.3% pa, against 1.9% pa for the national economy, while the rest of the agriculture industry declined nominally.

''While the sector is growing ahead of the farming sector we serve, we do work closely with farmers and can offer efficiencies they may no longer achieve with on-farm staff,'' said Mr Parton.

David Kean, RCNZ President and a second generation contractor operating out of Centre Bush, near Winton, runs Farmers Dipping Co, an agrichemical contractor specialising in pasture and crop spraying, sheep dipping and parasite treatment.

''About 80% of our business is with dairy farmers, though we still do work with sheep and beef in northern parts of Southland. Dealing with chemicals is a specialist business so our point of difference is trained staff and equipment.''

Farmers Dipping has a fleet of 10 trucks, which includes a self-propelled sprayer, and the company has also invested in GPS and other technology to ensure accuracy and efficiency.

Such has been the recent growth of the company, originally founded by his father Leo in 1966, that both of David's sons, Jarrod and Nicol, opted to join the business in 2016. David has also now expanded his service offering further south through the acquisition of Invercargill-based South Spray.

''The entry point costs for our equipment, technology and training is high. So it's more cost effective to use registered contractors and let the farmer get on with running their businesses,'' Mr Kean said.

-By Brent Melville

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