2 February 1996

Rising confidence puts the smile back on Danish faces

Smiling faces all round at the Agromek show in Denmark. Danish farm machinery sales are showing strong signs of recovery after a dramatic slump in the early 1990s. Andrew Faulkner reports

DANISH farmers are benefiting from the same upturn in incomes as that experienced by UK producers – albeit two years late. Barometer for those changes are fluctuating machinery sales.

In 1992, when UK farmers were starting to reinvest in equipment following the devaluation of sterling and the reduction in capital allowances, Denmark was suffering its worst drought in 125 years.

That disastrous harvest, combined with poor pig and milk prices, and a lack of confidence in the future of the CAP sent Danish machinery sales plummeting to an all-time low.

But there are now strong signs that Denmark is recovering. Figures released by the Danish Financial Institute for Agriculture and Fishery show that in 1994/95 investment in machinery and equipment rose by 29% to DKK3.1bn, when compared with the previous year (DKK2.4bn). For 1995/96 an additional 20% sales hike is predicted.

Speaking before the Agromek machinery show, Kristian Bach, chairman of the Danish Manufacturers of Agricultural Machinery, said: "Danish farmers appear to have entered a period of financial stability which should extend until the year 2000, depending on what happens to EU farming policy.

"Long-term objectives are to reduce or to dispose of subsidies, so it is opportune for EU farmers to invest and increase their competitive position now."

Like the farmers, Danish machinery companies fortunes also nose-dived in the early 1990s. But they were able to balance this poor domestic market with a more stable position overseas. Throughout the 1990s Danish machinery exports have maintained their 70-80% share of total production. Leading markets are Germany followed by the UK and France, which take about 50% of total exports.

lDanish tractor registrations were 1470 units in 1993. By 1995 that figure had recovered to 3239 tractors. &#42

Increased confidence and better pig and milk prices meant that farmers were in a more buoyant mood at this years Agromek – much to the relief of machinery makers. Inset: Kristian Bach, chairman of the Danish Manufacturers of Agricultural Machinery: "A period of stability," he says.