Many farmers and growers are carrying high levels of debt, which can influence how farmers/growers and banks view the viability of changing land management practices. Our research is investigating how debt-investment relationships are affected by ownership structure, farm trajectories, and environmental regulation. Understanding these three factors – and how they influence investment decisions on farms – will help us evaluate the effectiveness of this critical leverage intervention point.
While access to finance is often touted as the biggest barrier to Māori agribusiness success, other barriers may be more important at certain points in the development of a business. Our research is exploring when different barriers are more constraining how best to address these barriers. We have identified several key enabling factors for Māori agribusiness performance. Our research is investigating how Māori agribusinesses allocate resources at different stages of their development journey. This research will identify which of the enablers are considered the most critical at different stages of development, which will help guide other farms in allocating resources efficiently for maximum benefit.
Research findings
High debt levels adversely affect farmers’ incentives to over exploit natural capital and switch to more desirable land uses
Our paper shows how high debt levels create incentives to overexploit a farm's natural capital during periods of financial distress. It also shows how carefully designed sustainability-linked loans can create incentives to conserve natural capital.
Enablers and drivers for Māori agrifood collectives to transition from establishment to commercial sustainability
Our white paper uses a theoretical model of the enablers and constraints for Māori agrifood collectives (MACs) to demonstrate how MACs exist on a continuum from struggling collectives (with deficient levels of financial capital, capabilities, relationships, market access, and/or regulatory constraints) to thriving collectives.
Research in action
Testing alternative lending practices
We are using the finance framework we have developed to search for lending arrangements that weaken the investment disincentives created by high debt levels. These new lending arrangements promote investment because they allow farmers to keep more of the benefits generated by investing in sustainable farming practices.
Helping Māori agribusinesses manage constraints
Our research is testing how thriving Māori agribusinesses would allocate resources (financial and human) when faced with a range of scenarios from farms that are struggling to survive through to highly successful enterprises. From this we can identify options for how struggling Māori agribusinesses could allocate their scarce resources to give them the best chance to thrive.
Key contact
