How ya gonna keep’em down on the farm?

23/03/2012 § 4 Comments

I got out of the office yesterday. Away from Wellington, in the company of non-economists. Yes, it does happen.

The subject of rural de-population came up. The rural regions of New Zealand are concerned because they aren’t attracting more people, and some areas are actually shrinking. The peri-urban areas that are growing are seeing increasing numbers of retirees and lifestyle blocks (hobby farms). People in those areas aren’t sure that’s what they want — communities that once had families and employment now servicing the old and absent. The demographic change also changes the services required in the town centres. Less need for farm equipment, but more demand for doctors and pharmacists.

I don’t have any solutions, just a few observations:

  1. It’s the tension between the individual and the collective. Each person is individually seeking what’s best for them, but people — some people, at least — aren’t happy with the aggregate outcome. Younger people are going out into the world to seek their fortunes. Other people are moving into rural areas for peace or isolation. The result is that these two groups are more segregated than either necessarily prefers. It’s a bit like Schelling’s model of housing segregation, ¬†only with an active regional council. But it’s hard to see how this is a bad result, except to the extent that people weakly value the communities in which they live.
  2. It’s been going on for years. People have been moving off farms and into towns and then into cities for as long as they have had the option. There are technology pushes — we don’t need gangs of milkers, anymore, for example. There are pulls, too — cities allow specialisation, so people can produce more and earn more. But given the long-term trends, is worrying about de-population just trying to hold back the tide?
  3. Technology isn’t going to be the saviour of rural New Zealand. We’ve been hearing for years that new communications technologies (will) allow us all to work from home, the cafe, and the beach. We do that to some extent. A few people do build business empires on the back of broadband. But we also spend lots of time in our offices, seeing and talking with our co-workers. One of the interesting economic geography arguments I’ve seen is that technology is making face-time more valuable. As a result, work that requires us to spend time with each other is becoming more highly paid, and work that can be made routine and parceled out in bits and bytes is becoming less valuable. New Zealand is on the wrong side of that trend, and rural areas even more so.

No pithy observation, no happy thought to end this post. Just the vague feeling that we’re watching the future unfold and there’s not much we can do to change it.

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§ 4 Responses to How ya gonna keep’em down on the farm?

  • JC says:

    The farmer subsidies of several decades ago, and still prevalent in the UK/Europe and the US usually had an underlying social motive of keeping people on the farm and in the provinces.

    As the Maori diaspora of the 1940s-70s showed you can build major social problems in the cities as people migrate to find work/education/excitement.

    Back in the 60s/70s we had a couple of buzzwords.. “integration” and “regional development” which nicely covered the social concepts involved. However, the “ag-sag” of the 80s put paid to all that; farmers downsized the workforce and became lean and efficient. And once the land prices recovered and soared the NZ farmer (then average age mid 50s) had the incentive to sell and use the money to move North and coastwards instead of staying on farm or in the local villages and towns.

    There’s a big change in the farm demographics as well.. they are no longer the big families of yore, instead both husband and wife work the farm and quite frankly there’s not much room for paying the adult children to stay and work the place.. thats just reimposing the surplus labour of the previous generation. However, there’s usually enough money to put the kids through university and set them up for a good independent life.. in town.

    There are no “solutions” needed for this rural drift.. its just economics and evolution.

    JC

    • wh says:

      I argue that the picture is more complex than straight rural decline. whilst economies of scale is the story of some cities, we also need to consider economies of scale, specialisation and productivity in the rural sector with ultimately what matters being where are marginal benefits greater than marginal cost. this can mean that a land use type such as dairy farming which has high productivity in labour and capital utilisation returning much higher rates of economic return than many other sectors especially tourism.higher labour utilisation in dairy compared to sheep and beef is reversing population loss in some rural areas. this isnt an argument for rural sector per se just that the picture is more nuanced with changes within nz and regions in nz more fluid than simply migration straight to the biggest city. mining is having a similar effect in Oz with western australia having very high growth including population. the question is whether these new growth areas area able to spin off further industries that have equal or higher marginal rates of return.

  • [...] Kaye-Blake says there’s not much that can be doneabout long-term trends towards rural depopulation. And he puts rural New Zealand especially on the [...]

  • […] Kaye-Blake says there’s not much that can be done about long-term trends towards rural depopulation. And he puts rural New Zealand especially on the […]

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