Federated Farmers is calling on the Reserve Bank to hold the Official Cash Rate at 2.75% as farmer confidence takes a dive in its latest survey.

Only 2.9% of farmers expected the economy to improve, down from the levels of the last survey in January, but many said recruitment was easier – a sign of good economic health.

Feds economics spokesman Philip York says farmers are doing a good job recovering from the recession, and a low OCR is helping.

“One of the scary things about asking if farmers are going to be spending more, they are expecting to spend more, but only because they expect prices to go up!

"We should actually be trying to talk them down, it’s a case of if you’ve got spare cash, then don’t pass it on to other people, try to reduce your debt.”

Mr York says the biggest single issue for respondents was the impact of the Emissions Trading Scheme.