FARMERS are confident the agricultural economy is on the way up, according to new survey results.
A comprehensive survey of Victorian farmers, commissioned by Rural Finance, showed 46 per cent of farmers believed the agricultural economy would improve in the next 12 months.
Rural Finance chief executive Dugald Graham said despite some low commodity prices and drought, farmers believed the future was promising, thanks in part to world food shortages.
But Victorian Farmers Federation president Andrew Broad said some farmers, particularly grain growers, faced "a lot of disappointment" in the immediate future.
"It's been a bit of a mixed blessing this year," Mr Broad said.
"We've actually had a season and we hadn't had one for a while, so that boosts confidence.
"But with the Australian dollar going up and the downturn in commodity prices, that detracts a bit from that confidence."
Mr Broad said while he expected the dairy industry to bounce back in coming months, it could be at the expense of the grain industry.
"It looks like there's going to be a fair bit of feed grain around because of the rain we've had," he said.
Mr Graham said the survey identified water supply as the most important issue faced by farmers.
He said farmers were also concerned about drought, interest rates, farm profitability and climate change.
"The issue of climate change is still contentious among the farming community, with the survey showing just over half of the respondents believing climate change is a reality," Mr Graham said.
Mr Broad said government focus on climate change and an emissions trading scheme was a "hope robber" for farmers.
He said more money should be funnelled into research and development projects to help farmers adapt to climate change.
"Farmers can deal with seasons and prices going up and down, but we would like to see at least some vision from government about the long-term future of agriculture and we're not getting that," Mr Broad said.
Twenty per cent of survey respondents indicated they would increase their debt in the next five years to buy land and equipment, showing further confidence in agriculture.
