The Great Job Summit Show goes on the road around the regions this week. It played pretty well in the Big City – but that’s no guarantee of a great reception in the country, which was terribly under-represented

The Prime Minister’s Summit on Employment in Auckland looked a distinctly Urban Affair for a country with an economy firmly founded on agriculture.

Its townie tone has caused some grumpiness in my neck of the woods. Our local paper, the Waikato Times, bluntly branded it “a snub” to the region.

The 200 plus participants named on the invitation list included plenty of big name manufacturers and retailers, big city lawyers, accountants, business strategists and lobbyists, leaders from the transport, energy and communications sectors, Maori entrepreneurs, state service chiefs, local government representatives, and trade unionists.

There were just two invitees who looked like they earn their living on the paddock side of a farm fence – Mavis Mullins from Paewai Mullins Shearing and Peter Silcock from Horticulture New Zealand .

Four, if you count Fonterra chairman Henry van der Heyden, who farms near Putararu, and Dale Williams, chairman of the nationwide Mayors’ Taskforce who hails from Otorohanga.

Perhaps the summit coordinators in Wellington thought things were pretty hunky-dory in rural New Zealand . Well, they are likely to hear a different story when they take their show on the road.

The alarm bell started clanging for me when I read through the presentation to the Auckland summit by Reserve Bank Governor Allan Bollard. It was triggered by the shock of a slide tracking the annual growth rate for domestic credit over the last five years.

Since the beginning of last year, town and country borrowers have been heading in dramatically different directions.

Householders have been cutting back – the annual growth rate for bank lending to them has dropped from around 12% at the start of 2008 to 5% as we go into 2009.

Businesses have maintained a pretty steady course – with their borrowing growth rate starting and ending at around 12% with a bit of a temporary slump around the middle of last year.

However agriculture sector borrowing has soared – with the annual growth rate moving from about 15% at the start of last year to about 23% at the beginning of this year.

In an effort to understand why this has happened, I spent the weekend checking out the New Zealand Farming Weekly and the provincial press.

At first, I thought it could be that farmers are borrowing to rebuild stock numbers run down during the damaging droughts of recent years, or to fund conversions of lower yielding sheep and beef farms to dairy production. Wrong on both counts.

The recent sharp spike in prices at ewe fairs highlights a stock supply shortage – not a surge in demand. Stock numbers are still declining. At the same time, the once buoyant rural real estate market is now comatose.

PGG Wrightson, the country’s largest rural real estate business, says farm sales for the year to January were down 62% on the previous year. Big farms are not selling at all, and there has been some innovative structuring to get other sales away.

“[Sellers] are leaving money in, taking money out of other investments to put into the farm so they can leave it in,” says PGGW’s national real estate manager Stuart Cooper. “There’s talk of sharefarming.”

The message is much the same from the country’s largest valuation and property information operation, Quotable Value New Zealand . The sales scene is quiet. Good properties are holding their values but prices for marginal farms are retreating.

Dairy farmers are no longer hunting for sheep and beef farms with potential for conversion. They are pulling back onto their own farms and dropping production.

Some farm leaders have been talking quietly about farm prices following house prices, and the potential for a 30% decline in property values.

There are also signs that the bankers are turning off the farm credit tap. Federated Farmers dairy section chairman Lachlan Mackenzie cracked back at them in the Waikato Times last week.

"Six months ago, banks were phoning dairy farmers asking if they wanted more money, saying `Your equity is so high, you can leverage off it to get that extra farm'."

"The only calls today are asking for farm budgets or for more equity to be put into the business ... Now the banks will not give assurances to sharemilkers so they can buy cows."

New Zealand farmers are great survivors. Despite the current drop in commodity prices, Federated Farmers says the agriculture sector still faces a skills and human capital shortage.

The Feds say thousands of people are needed to cover retirements and fill new jobs being created in agriculture. What’s more, average farm workers’ wages are actually higher than the nationwide average.

Planting trees to offset Kyoto commitments, expanding water storage for farm irrigation, a rapid roll-out for rural broadband so more sophisticated IT resources can be brought to bear in an industry that simply has to increase its productivity... these all seem to offer a better return than digging a huge tunnel to put the traffic under Mount Albert or carving a cycleway from Kaitaia to the Bluff.

Perhaps, the answer does lie in the soil, as much as the cities. So, listen up you townies.