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talk real, industry-wide change P18<br />

NATIONAL POLICY<br />

Serious biosecurity<br />

Government Industry Agreements on<br />

border control going ahead P3<br />

What are swaps?<br />

These tricky financial instruments and<br />

their risks need to be known P5<br />

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2 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong> April 2013 www.fedfarm.org.nz Ph 0800 327 646<br />

PERSPECTIVE<br />

INSIDE<br />

Feature:<br />

The farming Cabinet . . 10<br />

Regulars:<br />

Perspective . . . . . . 2<br />

<strong>National</strong> Policy . . . . 3-6<br />

Counterpoint . . . . . . 7<br />

Regional Policy . . . . 8-9<br />

Weather . . . . . . . . 13<br />

Employment . . . . . . 14<br />

Economy . . . . . . 15<br />

Dairy . . . . . . 16-17<br />

Meat and Fibre, Grains 18-19<br />

Insider . . . . . . . . 23<br />

Managing Editor: Conor English<br />

Ph: 04 494-9189<br />

cenglish@fedfarm.org.nz<br />

Editor: Felicity Wolfe<br />

Ph: 04 494-9181<br />

fwolfe@fedfarm.org.nz<br />

Memberships: April van Dam<br />

Ph: 0800 327-646<br />

avandam@fedfarm.org.nz<br />

Advertising: Lloyd Davy<br />

Ph: 021 225-4610<br />

lloyd.davy@apn.co.nz<br />

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We’re lifting our game<br />

This summer’s drought has hit farmers hard, but farmers can<br />

and are lifting their game to establish more resilient<br />

businesses, says <strong>Federated</strong> <strong>Farmers</strong> president Bruce Wills<br />

A reporter recently asked me, ‘‘Why is it<br />

that every couple of years a rural<br />

community somewhere in New Zealand<br />

is in drought and often a few years later<br />

those same farmers are putting their<br />

hands up again?<br />

‘‘Are things being done so that we<br />

don’t face this problem so often? Are<br />

farmers learning from these situations?’’<br />

These are perfectly reasonable<br />

questions and yes, there are things we<br />

farmers can do and are doing.<br />

Nature will always have the final say,<br />

but we certainly can do things to<br />

mitigate weather events.<br />

Things like more water storage, more<br />

feed supplements, more trees, a more<br />

flexible mix of stock and, importantly,<br />

how we manage our pastures. <strong>Farmers</strong><br />

will continue to learn and adapt.<br />

We know that resilient and<br />

sustainable farming is a must if we are to<br />

achieve long term profitability. Many<br />

farmers plan well for drought, but some<br />

get caught napping. Weather events will<br />

continue to test us, so we need to be<br />

BRUCE WILLS<br />

<strong>Federated</strong> <strong>Farmers</strong><br />

president<br />

prepared.<br />

Biodiversity<br />

is another area<br />

where farmers<br />

need to lift our<br />

game.<br />

Thirty years<br />

ago, government<br />

and<br />

society<br />

supported<br />

incentives to replace<br />

steep hill<br />

sides of bush<br />

with pasture<br />

and sheep. We cleared a lot of fragile<br />

land and, with the benefit of hindsight,<br />

now know that the pendulum swung<br />

too far.<br />

Initially started by <strong>Federated</strong><br />

<strong>Farmers</strong>, the QEII Trust is one organisation<br />

working to right that largescale<br />

biodiversity loss.<br />

Today some 120,000 hectares of<br />

private land has been covenanted in a<br />

voluntary win-win deal for land-<br />

We know that<br />

resilient and<br />

sustainable<br />

farming is a must<br />

if we are to<br />

achieve long term<br />

profitability.<br />

owners, councils and the QEII Trust.<br />

<strong>Farmers</strong> are an adaptable bunch and<br />

will bounce back from this current<br />

drought with a few more worry lines and<br />

some dented balance sheets, but we will<br />

learn.<br />

Our farming systems will continue to<br />

evolve and farming will remain New<br />

Zealand’s largest export earner for a<br />

long time to come.<br />

2013 - a big year for reform<br />

The Government has an extremely<br />

busy reform agenda for 2013. The<br />

outcomes of what has, in many cases,<br />

been several years’ work is coming to<br />

fruition.<br />

<strong>Federated</strong> <strong>Farmers</strong> continues to put<br />

significant resource into Local Government,<br />

water and Resource Management<br />

Act (RMA) reforms, which matter<br />

not just to the rural community, but<br />

all New Zealanders. Together they add<br />

up to some of the most significant<br />

changes we have seen in many years.<br />

It is critical we get them right.<br />

After lengthy processes, the Government<br />

recently put out discussion<br />

documents on water and the RMA.<br />

The Land and Water Forum met for<br />

more than three years before<br />

completing its recommendations. The<br />

Government’s paper, Fresh Water Reform<br />

— 2013 and Beyond, draws<br />

heavily from that effort. In 2008<br />

<strong>Federated</strong> <strong>Farmers</strong> wrote a paper,<br />

CONOR ENGLISH<br />

<strong>Federated</strong> <strong>Farmers</strong><br />

chief executive<br />

Let’s Make It<br />

Work, outlining<br />

RMA<br />

changes we<br />

believed were<br />

necessary.<br />

The Government’s<br />

current<br />

paperincludes<br />

many of our<br />

recommendations.<br />

Local government<br />

is also<br />

lined up for sig-<br />

nificant change with the passing of<br />

the Local Government Amendment<br />

Bill 2012.<br />

These are all complex issues with<br />

some significant risks for rural communities.<br />

Overall, however, we are<br />

supportive of the general direction of<br />

the reforms and, as is often the case,<br />

the devil is in the detail.<br />

These reforms reflect much work by<br />

the Federation over the years and we<br />

look forward to continuing to speak on<br />

behalf of farmers and the rural community<br />

to get the right balance and<br />

best outcomes.<br />

Of course, all of this is on top of our<br />

normal input through submissions and<br />

other lobbying activity at international,<br />

national, regional and sector<br />

levels.<br />

At any one time <strong>Federated</strong> <strong>Farmers</strong><br />

can be dealing with 300 to 500 issues.<br />

We are the biggest policy shop outside<br />

of a government department and a<br />

great resource for farmers. Membership<br />

is less than $1.50 a day — and it is<br />

a tax deductible expense.<br />

A further reform on the horizon is<br />

that of the meat industry. As discussed<br />

on page 18, there must be change if we<br />

are going to try for profitable,<br />

sustainable farming for our sheep and<br />

beef farmers.


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Ph 0800 327 646 www.fedfarm.org.nz April 2013 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong> 3<br />

NATIONAL POLICY<br />

Post changes could affect us all<br />

By Kara Lok<br />

Policy advisor<br />

The review of New Zealand Post’s 1998<br />

Deed of Understanding with the Government,<br />

and the possible changes to<br />

postal delivery, is an emotive issue for<br />

many <strong>Federated</strong> <strong>Farmers</strong> members.<br />

The proposed changes may see<br />

postal delivery reduced in both urban<br />

and rural areas along with changes to<br />

New Zealand Post’s over-the-counter<br />

services.<br />

There is a common perception<br />

among farmers responding to the<br />

Federation’s consultation that only<br />

rural areas will be affected by this<br />

review, with no changes in urban<br />

areas.<br />

A significant proportion of<br />

respondents also have little faith that<br />

New Zealand Post and the Ministry of<br />

Business, Innovation and Employment<br />

(MBIE) will take the unique challenges<br />

they face into consideration when<br />

making changes to postal delivery<br />

frequency.<br />

These members do not see<br />

Government Industry Agreements progressing<br />

By Mark Ross Industry has<br />

The passing of the Biosecurity Reform<br />

Bill in November allows work on the<br />

much-talked about Government Industry<br />

Agreement (GIA) framework for<br />

biosecurity to progress.<br />

These GIAs are about biosecurity<br />

readiness and response; planning around<br />

potential high-risk pests and responses<br />

should a harmful exotic pest arrive within<br />

New Zealand. They are being developed<br />

as a means of delivering an integrated<br />

approach to prepare for and effectively<br />

respond to biosecurity risks.<br />

The GIAs will result in joint decisionmaking<br />

and cost-sharing between Government<br />

and industry, up to a predetermined<br />

maximum. Industry will pay<br />

no more than 50 per cent of any costs<br />

resulting from biosecurity actions.<br />

To progress GIAs, a joint industry and<br />

Ministry of Primary Industry (MPI) working<br />

group has developed a Memorandum<br />

of Understanding, allowing sector groups<br />

to enter into discussions with MPI as to<br />

the value of a GIA to an industry. The<br />

working group includes representatives<br />

from <strong>Federated</strong> <strong>Farmers</strong>, horticulture,<br />

broadband as a viable alternative to<br />

post. While satellite, dial-up and<br />

broadband has reached many rural<br />

areas in New Zealand, the internet is<br />

not available in a significant number<br />

of places or, if available, is either<br />

very expensive, very slow, or both.<br />

People living in rural areas with<br />

no internet connection rely on daily<br />

newspapers for current events and<br />

their local rural delivery contractor<br />

is their main source of communication<br />

with the outside world.<br />

This is exacerbated by a low level<br />

of computer literacy, especially<br />

amongst sheep and beef farmers,<br />

many of whom are over 60.<br />

Rural delivery contractors often<br />

also deliver extremely important<br />

items to rural communities including<br />

urgent medical supplies, newspapers,<br />

farm equipment and groceries,<br />

as well as postal items. For<br />

extremely remote box-holders, driving<br />

to the nearest town to pick up<br />

these items every time they need it is<br />

not a viable option.<br />

The contractors also provide<br />

sought assurance<br />

that its investment<br />

in the biosecurity<br />

system would be<br />

of value and its<br />

underwriting<br />

exposure was clear<br />

and manageable.<br />

poultry, the meat industry, dairy, bees<br />

and kiwifruit. To date, 18 sector groups<br />

have signed into the Memorandum of<br />

Understanding with MPI.<br />

The next stage in the process is<br />

approval of a GIA Deed of Agreement.<br />

This will be the master document<br />

outlining how the GIA will function<br />

between the different groups. Separate<br />

isolated rural areas with a level of<br />

security. It is often the rural delivery<br />

contractor who notices suspicious<br />

vehicles or an overflowing letterbox<br />

and alerts the authorities.<br />

New Zealand Post put forward<br />

four possible options, which the<br />

Government released for consultation,<br />

including; retaining the status<br />

quo, reducing postal delivery in some<br />

areas from six to five days per week,<br />

gradually reducing most areas to<br />

three days delivery per week and<br />

getting rid of the deed of understanding,<br />

opening up New Zealand Post to<br />

market controls.<br />

<strong>Federated</strong> <strong>Farmers</strong> submitted on<br />

the consultation last month based on<br />

the feedback we received from our<br />

members, asking MBIE and New<br />

Zealand Post to conduct further<br />

consultation with rural communities<br />

before making any changes to the<br />

current postal delivery frequency.<br />

Rural specific options need to be<br />

developed to address the unique<br />

circumstances rural communities<br />

face.<br />

operational agreements, developed for<br />

each sector group under the Deed, will<br />

specify actual cost-sharing<br />

arrangements and designated high<br />

priority pests. The Government’s intention<br />

is to have the Deed in place by June<br />

30.<br />

Industry has sought assurances that<br />

investments in the biosecurity systems<br />

would be of value and its underwriting<br />

exposure was clear and manageable.<br />

One of the primary sector’s biggest<br />

concerns with GIAs is the efficiency of<br />

the current New Zealand biosecurity<br />

system and the need for assurance on<br />

all aspects of the biosecurity chain. This<br />

was expressed most strongly in relation<br />

to border and pre-border biosecurity.<br />

Some groups have gone beyond<br />

biosecurity to look at the full range of<br />

industry engagement by MPI, along<br />

with integration and consistency across<br />

that wider scope.<br />

The idea of Government engagement<br />

with industry on the ‘‘end-to-end<br />

biosecurity system’’ has been<br />

welcomed, but more definition is<br />

needed on what that might mean in<br />

practice.<br />

CHANGES AHEAD: New Zealand Post’s<br />

review of delivery schedules could leave<br />

letterboxes in rural and urban areas empty.<br />

The concept of ‘‘partnership’’ between<br />

Government and industry also needs<br />

further exploration and definition in<br />

terms of constructive two-way engagement.<br />

Some industries already make<br />

significant contributions to readiness and<br />

response.<br />

For example, the deer, forestry,<br />

poultry and avocado industries invest in<br />

surveillance programmes to protect their<br />

industries and maintain, or gain, market<br />

access. The bee and kiwifruit industries<br />

also made significant in-kind<br />

contributions during the varroa and Psa<br />

responses.<br />

Although these GIAs have benefits,<br />

industry groups are also concerned that<br />

the sources of biosecurity risk, or<br />

exacerbators, are not recognised in the<br />

funding model. Various options are being<br />

assessed by the working group to ensure,<br />

where needed, exacerbators are included<br />

within GIA funding arrangements.<br />

The basic concept of these GIAs<br />

appears to have been agreed to by those<br />

involved, but the process still requires<br />

work to show the value to farmers and<br />

improve New Zealand’s overall<br />

biosecurity performance.


4 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong> April 2013 www.fedfarm.org.nz Ph 0800 327 646<br />

NATIONAL POLICY<br />

NZTA road funding review under way<br />

By David Cooper<br />

Senior regional policy advisor<br />

The New Zealand Transport Agency is<br />

reviewing the level of contribution it<br />

makes to local or non-state highway<br />

roads. But what’s wrong with the<br />

current approach and how should it be<br />

fixed?<br />

NZTA funding for local roads is<br />

collectively known as funding assistance<br />

rates, or FAR. Currently FAR are<br />

allocated based on a combination of<br />

need, using the size of a territory’s road<br />

maintenance programme, and ability to<br />

pay, which is then calculated using the<br />

local councils’ rateable land values as a<br />

proxy.<br />

The review asks some fundamental<br />

questions around whether this allocation<br />

framework is appropriate. A<br />

number of alternative allocation<br />

frameworks are also considered as part<br />

of the review.<br />

These alternatives include:<br />

■ The ‘flat’ approach — which would<br />

see the FAR set at 50 per cent for all<br />

territories, for every activity<br />

■ The ‘differences’ approach — which<br />

would allocate different funding levels<br />

to different territories<br />

■ And the ‘classification’ approach —<br />

which would see road funding allocated<br />

based on a national classification sys-<br />

tem.<br />

A population approach, under<br />

which more funding would be<br />

allocated to those with higher populations,<br />

would seriously under-deliver<br />

for predominantly rural territories<br />

CHICKEN MANURE FERTILISER<br />

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FUNDING<br />

ALLOCATION:<br />

The way road<br />

funding is<br />

allocated to our<br />

roads is currently<br />

up for debate.<br />

and for our national economy.<br />

Two alternatives which fit best<br />

with what <strong>Federated</strong> <strong>Farmers</strong> members<br />

have told us over recent years,<br />

are a revenue approach, which would<br />

repatriate road-use revenue to the<br />

www.bennettfertilisers.co.nz<br />

regions where that revenue was generated,<br />

and the contribution approach,<br />

where funding was directed in relation<br />

to an area’s contribution to the national<br />

economy.<br />

However, both approaches would<br />

need careful consideration.<br />

The revenue approach would have to<br />

ensure that road-use revenue matched<br />

where the road use actually occured and<br />

it could potentially not reflect differences<br />

in costs between different territories.<br />

Any outcomes from the review are<br />

likely to result in winners and losers<br />

between the different territories. This is<br />

because how the FAR is allocated is<br />

open to all kinds of discussion, but the<br />

total amount of funding allocated<br />

through the FAR is not up for debate.<br />

Ideally, <strong>Federated</strong> <strong>Farmers</strong> would<br />

like consideration around the amounts<br />

of road funding sourced and distributed<br />

through road use-based sources rather<br />

than local government rates, as the<br />

fundamental principles around who<br />

should pay for our roads, and how, are<br />

closely related to how the funding is<br />

allocated.<br />

Regardless of the result, <strong>Federated</strong><br />

<strong>Farmers</strong> will take a keen interest in the<br />

FAR review, because any outcome will<br />

have a material impact on farmers’<br />

roads and their annual rates bills.<br />

Two-headed giant enters game<br />

By Matt Harcombe<br />

South Island policy manager<br />

In March, the Government released two key<br />

pieces of reform which could change how<br />

we plan for, use, manage and regulate New<br />

Zealand’s most important farming assets:<br />

land and water.In some of the changes<br />

flagged the Government calls on parties to<br />

work together, rather than individually -<br />

much like a ‘two-headed giant’ attack in a<br />

computer game - to build a solid framework<br />

for looking after our natural resources.<br />

The first head of the attack began with a<br />

Ministry for the Environment discussion<br />

document, Improving our resource management<br />

system, laying the foundation for the<br />

most comprehensive Resource Management<br />

Act review since its inception.<br />

Between 2005-2008 a <strong>Federated</strong> <strong>Farmers</strong><br />

project team worked on delivering positive<br />

RMA change and if the discussion document’s<br />

changes are adopted, it will provide<br />

a blueprint for delivering many of the<br />

reforms farmers wanted.<br />

A key part is the inclusion in section 6 of<br />

‘‘the benefits of the efficient use and<br />

development of natural and physical<br />

resources’’, enabling councils to better<br />

consider the balance of protection versus<br />

resource and land use when making<br />

decisions. Councils would also be required<br />

to achieve ‘‘an appropriate balance between<br />

public and private interests in the use of<br />

land’’.<br />

The second head of reform is the<br />

Government’s Freshwater reform 2013 and<br />

beyond document in response to the Land<br />

and Water forum’s work. It sets out a team<br />

based approach to setting water quantity<br />

and quality limits based on nationally<br />

developed and agreed objectives. It would<br />

be supported by stronger, front loaded<br />

planning, aimed at putting the decision<br />

making back in the community’s hands,<br />

rather than the courts.<br />

This is where the ‘two headed giant’<br />

reform is full of opportunities for farmers<br />

and environmental groups to finally get<br />

down to working together.<br />

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Ph 0800 327 646 www.fedfarm.org.nz April 2013 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong> 5<br />

NATIONAL POLICY<br />

Lifting the lid on interest rate swaps<br />

By Nick Clark<br />

General policy manager<br />

Interest rate swaps have become a hot<br />

topic with a Commerce Commission investigation<br />

and an inquiry by Parliament’s<br />

Primary Production Select Committee.<br />

What is a swap?<br />

An interest rate swap is a financial<br />

derivative that allows a borrower to<br />

manage interest rate exposure on their<br />

borrowing. Until around 2005 they were<br />

used mainly by corporate and institutional<br />

customers. After that, swaps were offered<br />

by various banks to rural and commercial<br />

clients with high ‘corporate’ levels of debt,<br />

but without the sophisticated financial<br />

expertise held by corporates.<br />

How do swaps work?<br />

Parties use swaps to exchange, or swap,<br />

interest rate payments with each other.<br />

The most common swap is where a<br />

borrower pays a fixed interest rate — the<br />

swap rate — to the bank, while receiving a<br />

floating rate indexed to a reference rate.<br />

Each party has their own priorities and<br />

requirements, so these exchanges can<br />

work to the advantage of both parties.<br />

Borrowers can use swaps to hedge against<br />

interest rate volatility, especially when<br />

these are high and rising.<br />

How do they<br />

compare?<br />

A fixed-term loan is simpler than a<br />

swap, but the idea is the same; to hedge<br />

against volatility. Banks sell fixed-term<br />

loans to borrowers at a set interest rate for<br />

a set period, such as 6 per cent per annum<br />

for 24 months.<br />

The issues<br />

Swaps seemed to work quite well for<br />

borrowers until late 2008. In that high<br />

interest rate environment, some farmers<br />

were in net terms receiving payments from<br />

banks and there were not many<br />

complaints.<br />

Problems were exposed when floating<br />

interest rates fell dramatically from late<br />

2008 and a huge gap opened between the<br />

fixed swap rate and the floating reference<br />

Quad bike safety<br />

A new campaign launched by the Animal<br />

Health Board (AHB) aims to ensure its<br />

contractors are aware of potential quad<br />

bike hazards.<br />

AHB’s contractors are being issued eye<br />

catching educational stickers for staff and<br />

contractors to place on their quad bike or<br />

motorcycle to reinforce safety messages as<br />

well as a booklet on avoiding hazards and<br />

accident reporting.<br />

AHB Vector Operations manager Matthew<br />

Hall said there had been no increase<br />

in AHB contractors recording accidents<br />

and close calls over the past three years<br />

but the AHB was being a responsible<br />

employer.<br />

‘‘Our field staff and contractors spend a<br />

lot of their time working in difficult terrain<br />

and it is important they are familiar with<br />

quad bike hazards in these areas,’’ Mr Hall<br />

said.<br />

<strong>Federated</strong> <strong>Farmers</strong> Health and Safety<br />

spokesperson Jeanette Maxwell said the<br />

AHB’s initiative complemented the<br />

Federation’s work educating people about<br />

on-farm safety and accident prevention.<br />

‘‘It is important that everyone coming<br />

onto our farms is well-informed about all<br />

potential hazards, including the safe use of<br />

IN BRIEF<br />

rate. <strong>Farmers</strong> who had bought swaps<br />

were suddenly locked in at very high<br />

cost, with many not realising they had<br />

that ‘downside’ risk. Unfortunately they<br />

couldn’t escape their swaps without<br />

paying high break fees.<br />

What has <strong>Federated</strong><br />

<strong>Farmers</strong> done?<br />

<strong>Federated</strong> <strong>Farmers</strong> has always taken<br />

the approach that farmers need to be<br />

very careful when signing up to swaps.<br />

We advise people get professional independent<br />

advice on how swaps work and<br />

the pros and cons. The Federation<br />

believes strongly in individual responsibility,<br />

but is equally concerned swaps are<br />

not mis-sold and has been active on the<br />

issue.<br />

■ Since 2008: Meetings with senior bank<br />

executives urging banks to pass on<br />

interest rate cuts and treat their customers<br />

fairly. Swaps have been discussed<br />

at these meetings.<br />

■ August 2009: Submission to the<br />

Opposition’s Banking Inquiry, which discussed<br />

the Federation’s swap concerns.<br />

■ March 2010: Submission to the Banking<br />

Ombudsman seeking an increase in<br />

the financial limit for compensation and<br />

enabling the Ombudsman to investigate<br />

complaints about a bank’s ‘commercial<br />

judgment’ or its interest rate policies.<br />

■ December 2010 and February 2011:<br />

Submissions to the NZ Bankers<br />

Association’s <strong>Review</strong> of the Code of Banking<br />

Practice, which discussed swaps.<br />

■ November 2012: Letter to the Commerce<br />

Commission encouraging it to investigate<br />

allegations of mis-selling of swaps.<br />

What do the banks tell<br />

us?<br />

Banks have assured <strong>Federated</strong> <strong>Farmers</strong><br />

issues with swaps have been, or are being,<br />

worked through and settlements or new<br />

arrangements have been made where it<br />

was alleged that swaps were mis-sold or<br />

where there were genuine<br />

misunderstandings.<br />

Banks seem to have learnt lessons.<br />

Although swaps are still being sold to<br />

farmers, their use is not as widespread as<br />

between 2006 and 2008 and more care is<br />

being taken to ensure people know the<br />

quad bikes, or any other machinery they<br />

use. ‘‘New Zealand’s farms have a wide<br />

variety of terrain, from slippery bogs and<br />

wetlands to steep shale and everything in<br />

between. People need to know the capabilities<br />

of their vehicles and themselves.’’<br />

Better power deals<br />

Following the successful ‘‘What’s my number?’’<br />

residential campaign, the Electricity<br />

Authority is trying to encourage small- to<br />

medium-sized businesses (SMEs) to shop<br />

around for the best deal for their electricity.<br />

The Authority says 2011 research shows<br />

only 4 per cent of SMEs are actively looking<br />

for cheaper retailers. Electricity Authority<br />

chief executive Carl Hansen says there is a<br />

perception that there ‘‘were not any real<br />

gains to be made and that it seemed too<br />

much of a hassle’’.<br />

The Electricity Authority, together with<br />

Switchme, has developed an online business<br />

tool, which has been trialled since<br />

August 20. So far, 35 per cent of businesses<br />

receiving tariff offers via the online business<br />

tool have chosen to switch electricity<br />

retailer.<br />

■ For more information, visit<br />

www.whatsmynumber.org.nz/MyBusiness/<br />

FindYourNumber.<br />

HAD0016 1303<br />

benefits and risks. Banks deny that<br />

rewards or incentives are being used to<br />

sell swaps.<br />

Are all farmers<br />

unhappy with swaps?<br />

No, we get calls from farmers happy with<br />

swaps who find them a useful hedge<br />

against volatility. They do not want<br />

farmers denied swaps.<br />

What happened in<br />

Britain?<br />

A number of commentators have<br />

drawn a link between Britain and New<br />

Zealand. Many British farmers felt swaps<br />

were mis-sold to them by banks, typically<br />

between 2006 and 2008 when swaps were<br />

frequently sold as conditions of loans.<br />

<strong>Farmers</strong> complained bank staff were<br />

heavily incentivised to sell swaps with no<br />

warnings about downsides.<br />

In July 2012 four major British banks<br />

agreed a settlement with the Financial<br />

Services Authority (FSA) over ‘‘serious<br />

failings’’ in the sale of interest rate swaps<br />

to small businesses, including many<br />

farmers. The FSA found a number of bad<br />

practices, including poor disclosure of<br />

exit costs, non-advised sales straying into<br />

advice, ‘over-hedging’ (where amounts<br />

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and/or duration did not match the underlying<br />

loans) and using rewards and<br />

incentives to drive these practices. The<br />

banks did not always make sure customers<br />

understood the risks.<br />

What could happen<br />

here?<br />

In response to complaints, the Commerce<br />

Commission is investigating; primarily<br />

considering whether customers were<br />

misled about swaps’ true risk, nature and<br />

suitability. Business found guilty of<br />

breaching the Fair Trading Act may be<br />

fined up to $200,000 for each charge.<br />

Where more than one charge is laid, the<br />

court may impose a fine greater than<br />

$200,000. Only the courts can decide if a<br />

representation breached the Fair Trading<br />

Act.<br />

What should I do?<br />

<strong>Federated</strong> <strong>Farmers</strong> encourages farmers<br />

with allegations of mis-selling of swaps, or<br />

other poor treatment from their bank in<br />

relation to swaps, to make a complaint to<br />

the Commerce Commission (phone 0800 94<br />

3600).<br />

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6 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong> April 2013 www.fedfarm.org.nz Ph 0800 327 646<br />

NATIONAL POLICY<br />

Federation has say on rural fire services<br />

By Nick Hanson<br />

Policy advisor<br />

Rural fire forces and provincial volunteer<br />

brigades will be significantly affected<br />

by a suite of recommendations by the<br />

Fire Services <strong>Review</strong> Panel which is<br />

looking to change the current Fire<br />

Services and Forest and Rural Fire<br />

legislation. While the recommendations<br />

are wide-ranging, two are of particular<br />

interest to farmers.<br />

The terms of reference for the review<br />

has identified a disconnect between the<br />

fire service and rural fire forces’ mandate<br />

under current legislation, which<br />

essentially stops at fire responses, despite<br />

the increasing practice of fire<br />

personnel responding to non-fire emergencies,<br />

such as traffic accidents.<br />

In response, the panel has recommended<br />

that the Fire Service Commission<br />

be mandated and made responsible<br />

as first-responders to a much<br />

broader array of emergencies, including,<br />

but not limited to, road traffic emergencies,<br />

search and rescue, and animal<br />

rescues.<br />

The report recommends the establishment<br />

of a register that makes clear the<br />

emergencies that the fire service attends<br />

and that the Fire Services Commission<br />

be empowered to add or subtract from<br />

the register without new legislation.<br />

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In practice, the Commission would<br />

discharge this function through the<br />

urban fire service, which includes<br />

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service is geographically unable to<br />

respond in a timely manner, the Fire<br />

Service Commission would be able to<br />

accredit appropriate bodies and fund<br />

their training and responses.<br />

In practice, the intention of the panel<br />

is that accreditation would likely go to<br />

the local Rural Fire Authority, which<br />

would have the right of first refusal in its<br />

given area, although other agencies such<br />

as roading contractors could be<br />

accredited.<br />

The panel also addressed the advancement<br />

of the Government’s agenda<br />

of enlarging rural fire districts to simplify<br />

rural fire management and capture<br />

efficiencies.<br />

Amalgamation of smaller Rural Fire<br />

Authorities have been under way since<br />

2008, however, the pace has not been as<br />

great as expected and the review was<br />

tasked with accelerating the programme.<br />

Currently, the <strong>National</strong> Rural Fire<br />

Authority has worked as a facilitator<br />

and, in some cases, provided funds to<br />

promote Rural Fire Authority mergers,<br />

but the process had been largely driven<br />

locally. While the panel identified local<br />

buy-in as important, it nevertheless<br />

recommended the Minister of Internal<br />

Affairs, Chris Tremain, be empowered to<br />

compel amalgamation at his discretion<br />

from 12 months after the enactment of<br />

new legislation.<br />

<strong>Federated</strong> <strong>Farmers</strong> is engaging with<br />

the Minister as he considers the recommendations<br />

and will seek members’<br />

feedback before new legislation is released.


Ph 0800 327 646 www.fedfarm.org.nz April 2013 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong> 7<br />

COUNTERPOINT<br />

<strong>Farmers</strong> worldwide face same issues<br />

Former <strong>Federated</strong> <strong>Farmers</strong> president Alistair Polson discusses his roles as chairman of the New Zealand Farm Environment<br />

Trust and as Special Agriculture Trade Envoy<br />

The flagship business enterprise for the<br />

New Zealand Farm Environment Trust is<br />

the Ballance Farm Environment Awards.<br />

These awards operate in nine regions of<br />

New Zealand and it’s the Trust’s objective<br />

to have them in all regions.<br />

We are currently in discussion with<br />

two further regions to provide their<br />

farmers with the opportunity to enter<br />

these prestigious awards.<br />

The 2013 awards started in Bay of<br />

Plenty on February 22 and the results from<br />

all the regions will be announced in the<br />

next six weeks. There will be extensive<br />

media surrounding the announcements,<br />

but if you wish to get immediate notification,<br />

email info@bfea.org.nz to be added<br />

to the media advisory list.<br />

Each year the Ballance Farm Environment<br />

Awards delivers an array of outstanding<br />

farmers who are great advocates<br />

for the Trust’s objective of promoting<br />

sustainable farming practices to protect<br />

and enhance the environment. The good<br />

practice that underpins their successful<br />

farming enterprise makes me proud to be<br />

a farmer and chairing the Trust is an<br />

added bonus.<br />

Since taking on the role of chairman in<br />

October 2012, I have been greatly encour-<br />

aged by the support<br />

the Trust<br />

and the awards<br />

programme re-<br />

ALISTAIR POLSON<br />

ceive from businesses<br />

and government<br />

agencies.<br />

Our work is<br />

seen by them as<br />

the right thing to<br />

do. Having an independentorganisation<br />

such as the New Zealand<br />

Farm Environment Trust advocating for<br />

and highlighting good farming practice<br />

goes a long way to dispelling the myths<br />

that still exist in relation to agricultural<br />

production in this country. However, the<br />

Trust cannot achieve this alone, which is<br />

why it is important to have the support<br />

of farmers and key stakeholders.<br />

In my role as New Zealand’s Special<br />

Agricultural Trade Envoy for the New<br />

Zealand Government, I have recently<br />

been in Alberta, Canada and three<br />

northern states of the United States —<br />

Montana, Minnesota and Michigan —<br />

and I also attended the 16th round of the<br />

Trans Pacific-Partnership negotiations<br />

in Singapore. I received a warm welcome<br />

from the farmers and farming organisations<br />

I encountered.<br />

<strong>Farmers</strong> in the US, especially those<br />

growing corn, wheat, barley or soya<br />

beans, are making plenty of money and<br />

there are a lot of new tractors and farm<br />

sheds in evidence.<br />

The livestock industries, such as beef<br />

and pork, are suffering from high corn<br />

prices and other grass-based feed stuffs<br />

whose cost and availability is further<br />

affected by drought. Most of the sectors I<br />

saw don’t need subsidies. Indeed, current<br />

price support levels are quite low,<br />

but we should not overlook the protective<br />

tariffs industries like dairy, sugar<br />

and cotton enjoy.<br />

I was struck by the similarity of the<br />

issues we face as once we had touched<br />

base on the usual topics of the weather,<br />

prices and the cost of local government,<br />

discussion quickly turned to the environment,<br />

sustainable land use, water, effluent<br />

disposal and the pressure urban<br />

expectations were placing on farming.<br />

This last point ranged from animal<br />

welfare, the smells from the spreading of<br />

cow shed waste through to providing<br />

habitat for wildlife. There are, in the<br />

states I visited, a growing number of<br />

quality assurance schemes that attempt to<br />

deal with, and exemplify, best farming<br />

practice. But there is nothing like the<br />

Ballance Farm Environment Awards that<br />

can showcase leading farmers to their<br />

industry, customers and the general public.<br />

It would not surprise me to see the<br />

development of something like our awards<br />

programme in the future. Perhaps Jim<br />

Cotman could be persuaded to share some<br />

of his knowledge and expertise with our<br />

American friends?<br />

All farmers worldwide face a growing<br />

creditability gap with their urban cousins<br />

and a renewed common concern about the<br />

pace and extent of finite resource use.<br />

<strong>Farmers</strong> strive to get it right for their<br />

communities, for their own families and<br />

businesses because the consequences of<br />

failure in the long term do not bear<br />

thinking about.<br />

On June 22, the Trust will host the<br />

<strong>National</strong> Sustainability Showcase in Hamilton.<br />

The gala dinner will showcase the<br />

nine regional supreme winners and this<br />

year’s national winners will be announced.<br />

This is a wonderful event and if you would<br />

like more information about attending,<br />

email info@bfea.org.nz.


8 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong> April 2013 www.fedfarm.org.nz Ph 0800 327 646<br />

REGIONAL NEWS<br />

Water scheme gives farmers confidence<br />

The Ruataniwha Water Storage Scheme<br />

will give Central Hawke’s Bay farmers the<br />

confidence to invest in infrastructure for<br />

their farming future, according to farm<br />

management consultant Andy Macfarlane<br />

from Macfarlane Rural Business (MRB).<br />

Hawke’s Bay Regional Council, through<br />

its investment company, Hawke’s Bay<br />

Regional Investment Company Ltd<br />

(HBRIC Ltd) is currently in the consenting<br />

phase of the Ruataniwha Water Storage<br />

Scheme (RWS) in Central Hawke’s Bay,<br />

which has the potential to open up 25,000<br />

hectares of land for farming, while improving<br />

water quality and flows in the Tukituki<br />

River.<br />

MRB has undertaken extensive research<br />

into the on-farm economics of the<br />

RWS Scheme for a range of land uses,<br />

including dairy, sheep and beef and arable<br />

and has produced a report on its findings.<br />

Mr Macfarlane says the key issue for<br />

farmers is confidence.<br />

‘‘Having access to a reliable water<br />

supply for irrigation will give farmers in<br />

Central Hawke’s Bay the confidence to<br />

borrow money to invest in infrastructure<br />

and to make the right decisions at the right<br />

time,’’ he says.<br />

‘‘We tend to find farmers with irrigation<br />

are more aggressive decisionmakers<br />

and therefore more profitable.’’<br />

promotus 4932<br />

RIGHT PRICING: Hawkes Bay Regional<br />

Council chief executive Andrew<br />

Newman looks at the Ruataniwha Dam<br />

site with local farmer Craig Preston.<br />

PHOTO: SUPPLIED<br />

Dairy farmer Campbell Chard, who<br />

currently runs a dairy farm on the<br />

Ruataniwha Plains, says there are benefits<br />

for farmers and the community from<br />

the scheme, but the key will be whether<br />

the water is affordable.<br />

‘‘There are huge benefits from<br />

securing irrigation water and while this<br />

is key, it is dependent on the price of the<br />

water. The economics of the whole<br />

scheme are founded on irrigators being<br />

able to get the water at an economic<br />

price,’’ Mr Chard says.<br />

PROVINCIAL SPOTLIGHT HAURAKI/COROMANDEL<br />

A series of farmer forums were held<br />

late last year as the first step in bringing<br />

farmers and farm advisers up to speed<br />

with the RWS irrigation scheme opportunity.<br />

Arable, sheep and beef and dairy<br />

field days are being held to give farmers<br />

and farm advisers more opportunities to<br />

ask questions.<br />

HBRIC Ltd is calling for expressions<br />

of interest from farmers keen to be part<br />

of the RWS Scheme. From now until<br />

August, farmers are being encouraged<br />

to sign a non-binding Memorandum of<br />

Understanding expressing their interest<br />

in the scheme.<br />

At this stage it is modelled the water<br />

price will be targeted between 22 cents<br />

per cubic metre and 25 cents per cubic<br />

metre, in today’s dollars. Discount<br />

options are also being developed for<br />

farmers committing to the scheme early.<br />

A more accurate price will be available<br />

in September when the design and<br />

construction costs have been finalised.<br />

‘‘A more consistent water supply<br />

would lead to more repeatable systems<br />

on the farm allowing us to manage more<br />

of our farming operations ourselves.<br />

Forward planning would be a lot easier,’’<br />

Mr Chard says.<br />

He believes the RWS Scheme is a<br />

three generation project and costs<br />

should be spread across all generations.<br />

Central Hawke’s Bay arable farmer<br />

Richard Dakins farms 300 hectares of<br />

predominantly mixed arable on and<br />

around the Ruataniwha Plains and says it<br />

is vital the RWS Scheme gets the capital<br />

side of the project right so people can<br />

recoup some of what they put in when<br />

they move on.<br />

‘‘<strong>Farmers</strong> looking at the scheme need to<br />

have all the information in front of them<br />

and do their numbers before committing,’’<br />

Mr Dakins says.<br />

He believes the majority of those<br />

signing up to the scheme will be new to<br />

irrigation.<br />

Mr Macfarlane agrees and says while<br />

the RWS Scheme will lead to land<br />

intensification in Central Hawke’s Bay, it<br />

is not just about dairying.<br />

‘‘No irrigation scheme ever flies on one<br />

land use. It needs to be economic for<br />

multiple land uses,’’ he says.<br />

‘‘Our modelling for the scheme shows<br />

about 38 per cent dairy, followed by<br />

intensive arable and intensive finishing.’’<br />

■ The Macfarlane Rural Business<br />

Ruataniwha Water Storage Project <strong>Review</strong><br />

of Farm Profitability Report is available to<br />

view at www.hbrc.govt.nz.<br />

— Hawke’s Bay Regional Council<br />

Support each other through the dry weather<br />

By John Sanford<br />

Bay of Plenty provincial president<br />

Every time I look out my window my<br />

heart sinks; the barren land a sign of<br />

more hardship to come. Compared to<br />

last season, this is a disaster.<br />

Last year was the best we have had<br />

in years, you couldn’t get more polar<br />

opposite if you tried. Although it is not<br />

the worst drought we have ever had, we<br />

have declared drought three times in<br />

the past five years and each time it<br />

becomes more apparent that this might<br />

be the new norm.<br />

We have proven to be adaptable<br />

though; the climate seems to go in<br />

cycles and 20 years ago this was<br />

probably a normal summer.<br />

The soil moisture levels are at a big<br />

deficit, the streams are low, farmers<br />

have got fewer supplements than normal<br />

years due to a difficult October and<br />

November. The whole of the North<br />

Island is in a deficit situation for feed,<br />

so we have to go further afield to get<br />

it, which costs more.<br />

<strong>Farmers</strong> have little feed left in<br />

reserves, so a lot of cows will be dried<br />

off. But they will still have to be fed,<br />

even though they are not producing<br />

milk. It is money down the drain in<br />

the immediate future but necessary<br />

for the distant future.<br />

Sheep and beef farmers are struggling<br />

to get enough feed to fatten<br />

their stock for the works and even<br />

then the works are not particularly<br />

helpful in taking on excess stock, so a<br />

lot have been sent to the South Island.<br />

There are some things farmers can<br />

do to alleviate some of the pressure —<br />

dry your heifers off early, as well as<br />

the skinny ones who are more at risk.<br />

If you are not milking, there is little<br />

money coming in so this will affect<br />

your farm further down the track.<br />

Essentially it is a balancing act,<br />

deciding to either dry cows off now<br />

and lose money or continue in hopes<br />

that rain is not far away.<br />

Hopefully, Fonterra will provide<br />

more of their final season’s payments,<br />

or a bigger chunk of them, early. That<br />

would be a huge help to dairy<br />

farmers. Additionally, if meat works<br />

could come to the table, sheep and<br />

beef farmers would have a better shot<br />

at getting through this tough season<br />

relatively unscathed.<br />

Water supply for dry stock<br />

farmers is a huge concern as stock are<br />

drinking twice as much as usual<br />

whilst water supplies are drying up.<br />

The candle is burning at both ends.<br />

There is simply nothing anyone<br />

can do but wait for the rain to come. In<br />

the meantime, talk to your tax department,<br />

bank manager and accountant.<br />

They are not the evil sharks some like<br />

to paint them out to be — it is in their<br />

best interest to help you out.<br />

The Rural Support Trust is also a<br />

good resource, use it and watch out for<br />

your neighbours, family and friends.<br />

Alternatively there is the depression<br />

helpline. This is a stressful situation for<br />

all farmers, so make sure you are<br />

looking after yourself and not taking<br />

your stress out on your family. Have a<br />

break, get off the farm and get away<br />

from it all.<br />

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REGIONAL POLICY<br />

Working together gets results<br />

By Dr Paul Le Mière<br />

Regional Policy Manager<br />

Lake Rotorua is an inspiring story of<br />

farmers, the community and local council<br />

doing their bit to get the lake’s water<br />

quality going in the right direction. As a<br />

result it has hit agreed water quality<br />

targets decades before it was thought<br />

possible.<br />

This result, and how it was achieved,<br />

turns many perceptions on improving<br />

degraded water bodies on their head.<br />

The lake was in a bad way after<br />

decades of contaminants from humans,<br />

animals and industry, as well as geothermal<br />

activity.<br />

In November 2010 the Bay of Plenty<br />

Regional Council publicly notified its<br />

second Regional Policy Statement (RPS),<br />

which contained a proposal to reduce<br />

nitrogen (N) deposits in Lake Rotorua by<br />

45 per cent within the 10 years between<br />

2009 and 2019.<br />

<strong>Federated</strong> <strong>Farmers</strong> submitted against<br />

this new policy, then appealed to the<br />

Environment Court on the grounds that its<br />

impact on current landowners and the<br />

local economy would result in great<br />

hardship for both. Importantly, the Federation<br />

said the proposed plan would not<br />

actually achieve the agreed water quality<br />

target.<br />

This target was a Trophic Level Index<br />

(TLI) of 4.2. The TLI is a composite<br />

measure, combining N levels, phosphorus<br />

(P) levels, water clarity and algal<br />

biomass levels. Eight years ago the lake<br />

had a TLI of 4.8 — which equates to poor<br />

water quality.<br />

Last year the council’s and DairyNZ’s<br />

scientists, who have been analysing the<br />

monitoring results, agreed that for each<br />

of the last eight years the water quality<br />

WORKING<br />

TOGETHER:<br />

Rotorua MP Todd<br />

McClay (right)<br />

and Rotorua-<br />

Taupo <strong>Federated</strong><br />

<strong>Farmers</strong><br />

provincial<br />

president Neil<br />

Heather on the<br />

heights of Mr<br />

Heather’s farm,<br />

overlooking Lake<br />

Rotorua which is<br />

seeing huge<br />

water quality<br />

improvements.<br />

has become significantly better.<br />

Crucially, last year Lake Rotorua<br />

reached a TLI of 4.1, squarely in<br />

‘average’ water quality — an incredible<br />

result in just eight years.<br />

These results were achieved by a<br />

combination of actions from many parties.<br />

The regional council used nutrientlocking<br />

technology to make some P<br />

unavailable, Rotorua District Council<br />

changed the way it discharges sewage,<br />

central Government helped the community<br />

upgrade their old leaky septic<br />

tanks and farmers have changed their<br />

management practice, installing expensive<br />

capital items to significantly reduce<br />

their N loading. All of this added up to<br />

water quality way beyond what could<br />

have been achieved without a combined<br />

effort.<br />

Once what was happening in the lake<br />

was agreed, the parties could sit down and<br />

find a way forward. The Oturoa Agreement<br />

lays a pathway for a staged approach<br />

over 20 years, using managed nitrate<br />

reduction from land-users, in conjunction<br />

with regular scientific checks that the lake<br />

at least maintains water quality.<br />

This is a Memorandum of Understanding<br />

between <strong>Federated</strong> <strong>Farmers</strong>, Bay of<br />

Plenty Regional Council and the Lake<br />

Rotorua Primary Producers Collective<br />

Incorporated, with the support of the<br />

Lakes Water Quality Society.<br />

Checks will be done with council and<br />

DairyNZ scientists, giving confidence that<br />

objective science is being applied.<br />

Why is this all so important? It<br />

categorically shows what is possible with<br />

the right collaborative community approach<br />

and that the nitrate myopia of<br />

some other councils will not actually<br />

produce efficient, effective and enduring<br />

outcomes for water quality.<br />

Horizons’ One Plan six months on<br />

By Dr Tessa Mills<br />

Regional policy advisor<br />

In the six months since the first interim<br />

decision on the One Plan was released,<br />

there has been a second decision, released<br />

on Christmas Eve, and both <strong>Federated</strong><br />

<strong>Farmers</strong> and Horticulture New Zealand<br />

lodged a second appeal. At the time of<br />

writing there is no sign of the final decision,<br />

but much has happened since September<br />

when the first decision was released.<br />

Over the past six months the primary<br />

sector has become a far more united front,<br />

as we share common concerns for our<br />

farmer and grower members. The One Plan<br />

has always presented a significant challenge<br />

for the district’s farmers, but what<br />

now seems to be surfacing is a more<br />

widespread concern among the rest of the<br />

community regarding its implications on<br />

the local farm supply store, the supermarket,<br />

the corner store and the local school.<br />

The economic analysis prepared by the<br />

regional council at the outset of the plan<br />

CLEANING UP: The One Plan as it<br />

stands would more likely encourage<br />

farmers to sell up than clean up.<br />

was a ‘once-over lightly’ — lacking in<br />

detail and quantitative analysis. Subsequent<br />

council analyses also fell short of<br />

determining impacts on the wider community,<br />

instead focusing on the costs<br />

borne within the farm gate. The court<br />

heard evidence on the potential economic<br />

impacts of the One Plan from various<br />

experts, but what seemed to surface in<br />

the interim decision was a focus on the<br />

costs within the farm gate of mitigation to<br />

reduce nitrogen-leaching losses.<br />

Given that regional plans, such as the<br />

One Plan, have far wider impacts than<br />

those on farmers, it was fortunate that<br />

shortly after the release of the first<br />

interim decision, a study commissioned<br />

by the Ministry for Primary Industries<br />

and carried out by Landcare Research<br />

emerged.<br />

Although not an exact match for the<br />

policy resulting from the interim decision,<br />

it did suggest the decision’s<br />

resource allocation model is inefficient.<br />

As such the One Plan is likely to have a<br />

significant impact on farm profitability<br />

without delivering the environmental<br />

outcomes sought. Once farm profitability<br />

drops, so too does the money merry-goround<br />

keeping our rural communities<br />

afloat.<br />

This lack of economic analysis seems<br />

unbelievable, considering that in the<br />

March last year BERL regional rankings<br />

report New Zealand’s bottom three<br />

performing districts are three of the five in<br />

the Horizons region. These rankings are<br />

based on data which includes GDP, employment<br />

and population growth. Indications so<br />

far suggest that the One Plan will have a<br />

significant negative economic impact on a<br />

region which cannot afford a significant<br />

economic downturn.<br />

We hope Government’s review of the<br />

Resource Management Act will strengthen<br />

its requirements for robust economic<br />

analysis and avoid poorly-considered regulation<br />

surfacing elsewhere.<br />

On a brighter note, the Horizons regional<br />

councillors recently voted nine to<br />

three to back Horticulture New Zealand’s<br />

request to the Environment Court to rehear<br />

portions of the hearing in light of recent<br />

economic information. Primary sector<br />

groups, including <strong>Federated</strong> <strong>Farmers</strong>,<br />

supports this move, however, Fish and<br />

Game remain opposed to any further rehearing<br />

based on economic impacts.<br />

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10 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong> April 2013 www.fedfarm.org.nz Ph 0800 327 646<br />

BR-j7410<br />

FEATURE<br />

The farming Cabinet —<br />

The Primary Industries ministerial portfolio<br />

is a large, challenging one. For Horowhenua<br />

farmer and Otaki MP Nathan Guy the first<br />

few weeks on the job have been hectic, with<br />

the most severe drought since the 1940s<br />

striking the North Island and parts of the<br />

South, reports Felicity Wolfe<br />

The January Cabinet re-shuffle by Prime<br />

Minster John Key saw a number of<br />

changes in key positions for agriculture, as<br />

well as for Primary Industries.<br />

Taking over from new Speaker of the<br />

House David Carter, Nathan Guy already<br />

had experience as the associate Primary<br />

Industries minister and is well-known as a<br />

hard-working politician who has risen<br />

through the <strong>National</strong> Party ranks since first<br />

entering Parliament as a list MP in 2005.<br />

<strong>Federated</strong> <strong>Farmers</strong> national president<br />

Bruce Wills says Guy’s farming background<br />

and experience in both the meatproducing<br />

and dairy industries give him a<br />

broad understanding of the varied<br />

challenges faced by the different primary<br />

sectors.<br />

‘‘We know that as a farmer himself,<br />

Nathan will really understand and work<br />

well for agriculture and all other primary<br />

industries in this country,’’ Wills says.<br />

He pointed to Guy’s work as Minister of<br />

Immigration, associate Primary Industries<br />

Minister and as the associate Transport<br />

Minister which showed his ability to work<br />

well with <strong>Federated</strong> <strong>Farmers</strong> in the past.<br />

‘‘I believe there is a good understanding<br />

between the Minister and the Federation,’’<br />

Wills says.<br />

The Federation welcomes Guy’s<br />

indications that water storage and resource<br />

management are areas of focus, as is<br />

making sure the sector is in a position to<br />

take advantage of new trading opportunities.<br />

‘‘It is a drought, so water storage is high<br />

on the agenda for everyone at the moment,’’<br />

Wills says.<br />

‘‘The Federation will be working hard to<br />

make sure it stays in politicians’ consciousness<br />

well after the rain has returned.’’<br />

Guy told <strong>Federated</strong> <strong>Farmers</strong> he was<br />

very supportive of irrigation projects to<br />

help mitigate future droughts.<br />

‘‘Done properly, this has the potential to<br />

deliver a major boost to our primary<br />

industries and support many new jobs. If<br />

current proposals are advanced, there<br />

could be another 420,000 hectares of<br />

irrigated land available over time,’’ Guy<br />

says.<br />

‘‘I’m also working closely with Environment<br />

Minister Amy Adams on<br />

water reform, and recently we launched a<br />

discussion paper with ideas on improving<br />

water quality and the way freshwater is<br />

managed.<br />

‘‘Balancing environmental issues with<br />

economic growth will be a major challenge,<br />

but one in which New Zealand can<br />

be a world leader.’’<br />

Having already visited many droughthit<br />

areas, Guy says he is keen to meet<br />

farmers from all regions.<br />

‘‘I’m looking forward to getting my<br />

sleeves rolled up and stuck in.’’<br />

The January Cabinet reshuffle also<br />

brought a number of other younger<br />

politicians to the top table, many of them<br />

in positions which have a direct impact<br />

on New Zealand’s agricultural sector.<br />

These included Auckland Central MP<br />

Nikki Kaye in the Food Safety portfolio,<br />

Tauranga MP Simon Bridges taking on<br />

the Labour, Energy and Resources portfolio<br />

and Napier MP Chris Tremain<br />

taking on the all-important Local Government<br />

portfolio. These have joined relative<br />

newcomer, Environment and<br />

Telecommunications Minister Amy<br />

Adams in Cabinet.<br />

‘‘Local Government is currently<br />

undergoing some much-needed reform<br />

and, with farmers being directly impacted<br />

by the land-based rating system, this<br />

is a portfolio the Federation takes a keen<br />

interest in,’’ Wills says.<br />

Also back at the top table is Nelson<br />

MP Nick Smith with Conservation.<br />

‘‘We know Dr Smith brings a wealth of<br />

skill and knowledge to the conservation<br />

arena, having previously held this portfolio,’’<br />

Wills said.<br />

BUSY START: Primary Industries Minister Nathan Guy talks with Dargaville dairy farmer<br />

Malcolm Welsh at his Northland farm, which is in the grip of drought.<br />

‘‘We will be working with all of these<br />

politicians to bring better policy and<br />

legislative outcomes for our farmer<br />

members and, indeed, all New Zealanders.’’<br />

The farming Cabinet<br />

of 2013<br />

Minister of Finance - Bill English<br />

(Clutha-Southland)<br />

Cabinet Rank: 2<br />

■ Political career to date: English is the<br />

Deputy Prime Minister, Minister of<br />

Finance and Minister for Infrastructure;<br />

pivotal roles for agriculture.<br />

As the Minister of Finance and<br />

Treasury, English is responsible for the<br />

allocation of funds for government ministries<br />

and key projects such as the water<br />

storage fund, the rural broadband initiative<br />

and research. English, who hails from<br />

a Southland farming family, is very in<br />

touch with farmers’ needs.<br />

He is also highly experienced and<br />

respected, having been a Member of<br />

Parliament since 1990. He is a former<br />

<strong>National</strong> Party leader and in previous<br />

<strong>National</strong> governments has held Health,<br />

Finance and Revenue portfolios.<br />

■ What farmers will like: English<br />

has brought a rural practicality and<br />

straight-talking style to some of the most<br />

important portfolios in the Cabinet. He<br />

has retained close links with agriculture<br />

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■ Challenges: The government’s unwillingness<br />

to take active measures to<br />

lower the New Zealand dollar has upset<br />

some farmers and other exporters, however,<br />

<strong>Federated</strong> <strong>Farmers</strong>’ opinion is that<br />

reducing government expenditure and debt<br />

is the preferable measure.<br />

■ Real farm experience? English<br />

comes from a farming family which is<br />

proudly based in the Southland town of<br />

Dipton. With family members in<br />

agribusinesses and his brother, Conor, at<br />

<strong>Federated</strong> <strong>Farmers</strong>’ helm, there are bound<br />

to be plenty of agricultural anecdotes when<br />

the clan gets together for a lamb roast<br />

dinner at Christmas.<br />

Minister for Primary Industries —<br />

Nathan Guy (Otaki)<br />

Cabinet Rank: 16<br />

■ Political career to date: After just over<br />

a year as Associate Minister for Primary<br />

Industries, Guy was promoted into the<br />

Primary Industries portfolio in the January<br />

Cabinet reshuffle, stepping into the spot left<br />

vacant by South Island sheep farmer David<br />

Carter who gained the Speaker of the<br />

House role. Guy first entered Parliament in<br />

2005 as a list MP and won the Otaki<br />

electorate in 2008. He was given the<br />

Internal Affairs portfolio and other responsibilities<br />

in 2009.<br />

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FEATURE<br />

who you need to know<br />

HERE TODAY: Minister of Trade Tim Groser has plenty of experience at global trade<br />

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rather than later. PHOTO: NEW ZEALAND HERALD<br />

■ What farmers will like: Guy has a<br />

solid farming background, which includes<br />

Young Farmer competitions, an agricultural<br />

degree from Massey University and<br />

a past recipient of a Winston Churchill<br />

Fellowship, with which he travelled to the<br />

United States to study beef exports. He<br />

has hands-on, pan-sectorial agricultural<br />

understanding.<br />

■ Challenges: Despite a solid political<br />

reputation, Guy’s profile is not as prominent<br />

as some of the other new faces around<br />

the Cabinet table. Also, those looking for<br />

a new direction after David Carter are<br />

likely to be disappointed.<br />

Guy has indicated that while he sees<br />

himself as a part of a younger political<br />

generation, he has also said he means to<br />

carry on in much the same path as Carter.<br />

■ Real farm experience? Five stars.<br />

Last month Guy told Dairy Exporter that<br />

he enjoys getting back to the family farm,<br />

about an hour north of Wellington, in the<br />

weekends.<br />

Minister for the Environment — Amy<br />

Adams (Selwyn)<br />

Cabinet Rank: 15<br />

When Aucklander Amy Adams moved to<br />

study at Canterbury University in 1988,<br />

she stayed, practicing law and living with<br />

her family on a 600-acre sheep farm in<br />

Aylesbury, just west of Christchurch.<br />

After graduation with first class honours,<br />

Adams had a successful law career<br />

then was elected to Parliament in 2008.<br />

■ Political career to date: Minister for<br />

Communications and Information Technology,<br />

Minster for the Environment.<br />

■ What farmers will like: As Minister<br />

for Communications and Information<br />

Technology, Adams has been a supporter<br />

and ally of the roll-out of the<br />

Rural Broadband Initiative.<br />

As Environment Minister, Adams is<br />

in the process of overhauling the<br />

Resource Management Act. It is hoped<br />

she will streamline it to reduce the huge<br />

time inefficiencies and money wastage<br />

it has become synonymous with.<br />

■ Challenges: If the Resource Management<br />

Act reforms do not deliver the<br />

promised savings, it won’t just be the<br />

farming community left disappointed.<br />

■ Real farm experience? Although<br />

Adams was an Aucklander, she has<br />

taken to country life and is a strong<br />

advocate for her largely rural electorate<br />

and the needs of all other rural New<br />

Zealanders.<br />

Minister of Conservation — Nick<br />

Smith (Nelson)<br />

Cabinet Rank: 13<br />

Nelson MP Nick Smith has been a<br />

<strong>National</strong> Party stalwart since university<br />

and has retained his seat since 1990,<br />

when it was then the Tasman seat.<br />

■ Political career to date: Nick Smith<br />

first stood for political office at Rangiora<br />

District Council in 1983, while at high<br />

school. He was elected in 1986, aged 21<br />

and has been involved in politics since.<br />

He won the then-Tasman electorate<br />

in 1990, becoming Minister for Conservation<br />

in 1996.<br />

He has also held portfolios for<br />

Corrections, Education, Environment,<br />

Climate Change Issues and the Accident<br />

Compensation Corporation. He<br />

was also, briefly, the deputy leader of<br />

the party under Don Brash in 2003.<br />

The January reshuffle saw Smith<br />

return to Cabinet with the Conservation<br />

portfolio, after resigning his previous<br />

ministerial portfolios following<br />

allegations made about his conduct as<br />

the Minister for ACC in handling the<br />

case of a friend and former <strong>National</strong><br />

Party member Bronwyn Pullar.<br />

■ What farmers will like: Smith listened<br />

to <strong>Federated</strong> <strong>Farmers</strong> about the<br />

difficulties around including biological<br />

emissions in the Emissions Trading<br />

Scheme and delivered on removing<br />

them indefinitely.<br />

■ Challenges: In returning to his old<br />

Conservation portfolio, the thousands<br />

of farmers who do conservation work<br />

for free — replanting, creating QEII<br />

covenants on fragile land and bush —<br />

will be looking for Smith to show a real<br />

and tangible understanding of what it<br />

really takes to protect New Zealand’s<br />

unique biodiversity.<br />

<strong>Farmers</strong> will be looking for further<br />

unity between the Department of Conservation<br />

and its rural neighbours.<br />

<strong>Farmers</strong> in bovine tuberculosis-prone<br />

areas will also be looking to see what<br />

solid government commitments are<br />

made to the Predator Free New Zealand<br />

idea, as its aims could overlap into their<br />

LOST GROUND:<br />

Conservation<br />

Minister Nick<br />

Smith, right, will<br />

have to do more<br />

than plant a few<br />

flax bushes to<br />

keep farmers’<br />

respect.<br />

interests in possum control.<br />

■ Real farm experience? Smith is a<br />

career politician, but grew up in an<br />

agricultural service town and has successfully<br />

ingrained himself in the Nelson<br />

electorate, which runs on the primary<br />

industries, including agriculture.<br />

Minister of Trade and Minister for<br />

Climate Change Issues — Tim Groser<br />

Cabinet Rank: 14<br />

As the Minister of Trade and Climate<br />

Change Issues, and previously holding<br />

the Conservation portfolio, Tim Groser<br />

has held a great deal of influence over<br />

New Zealand agricultural sectors since<br />

2008.<br />

He is a former ambassador to<br />

Indonesia and the World Trade Organisation.<br />

As such, Groser has been a firm<br />

supporter of free-trade agreements and<br />

multi-lateral agreements such as the<br />

Trans Pacific Partnership.<br />

At present Groser is a contender for<br />

the director-generalship of the World<br />

Trade Organisation which will become<br />

vacant after May.<br />

Groser has been deeply involved in<br />

facilitating international climate change<br />

negotiations and has been part of many<br />

climate change forums and conferences.<br />

■ Political career to date: Between 2008<br />

and 2010, Groser was the Minister for<br />

Conservation and is the Minister for<br />

Trade.<br />

■ What farmers will like: Groser is seen<br />

globally as a leading proponent for free<br />

trade and is widely respected on the<br />

international stage. He has been very<br />

active in opening new trade opportunities<br />

for New Zealand’s agricultural products.<br />

■ Continued on page 12


12 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong> April 2013 www.fedfarm.org.nz Ph 0800 327 646<br />

FEATURE<br />

Who’s who in the 2013 farming Cabinet<br />

■ Continued from page 11<br />

■ Challenges: If he secures the<br />

director-generalship of the World<br />

Trade Organisation Groser will leave<br />

his role as Minister of Trade and<br />

Climate Change Issues. Even if he does<br />

not, it is likely he will be looking at his<br />

career prospects on the world stage.<br />

■ Real farm experience? With<br />

agriculture playing a huge role in New<br />

Zealand trade, Groser has worked on<br />

agricultural negotiations over the<br />

years, including a stint chairing World<br />

Trade Organisation’s agricultural<br />

negotiations.<br />

Minister of Local Government —<br />

Chris Tremain (Napier)<br />

Cabinet rank: 18<br />

Chris Tremain has been given the<br />

Local Government portfolio at a<br />

crucial time. <strong>Federated</strong> <strong>Farmers</strong> is<br />

encouraged by many of the initiatives<br />

outlined under the Local Government<br />

Reform Bill, but hopes Tremain will<br />

have the courage to look at the biggest<br />

issue, the funding mechanisms<br />

available to councils.<br />

Tremain has been in Parliament<br />

since 2005 when he won the Napier<br />

seat. A successful Hawke’s Bay<br />

businessman, Tremain should have<br />

some previous dealings with local<br />

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of Plenty lifestyle, Simon Bridges, is<br />

getting his feet wet with the Labour<br />

portfolio.<br />

government as a private citizen — a<br />

perspective the Federation hopes he<br />

retains.<br />

■ Political career to date: Minister<br />

of Internal Affairs and Associate<br />

Minister of Tourism; Local<br />

Government<br />

■ What farmers will like: As a<br />

businessman from a regional,<br />

agriculture-dependant centre,<br />

Tremain should have a good<br />

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understanding of the demands on<br />

small to medium-sized business<br />

owners.<br />

■ Challenges: It remains to be seen<br />

if Tremain will look seriously at the<br />

problems with purely land-based<br />

rating systems.<br />

■ Real farm experience? Hailing<br />

from Hawke’s Bay, Tremain is never<br />

far away from a primary producer —<br />

including the Federation’s own<br />

president, Bruce Wills.<br />

Minister of Labour — Simon<br />

Bridges (Tauranga)<br />

Cabinet Rank: 19<br />

Originally from Auckland, Bridges<br />

completed a BA and LLB (Hons) at<br />

Auckland University, before further<br />

studies at Oxford University and the<br />

London School of Economics.<br />

He also worked as an intern at the<br />

British House of Commons. After a<br />

period as a litigation lawyer in<br />

Auckland, Bridges moved to<br />

Tauranga where he became senior<br />

Crown Prosecutor.<br />

He was elected as Tauranga’s MP<br />

in 2008 and has risen quickly up the<br />

<strong>National</strong> Party lists in that time.<br />

■ Political career to date: Minister<br />

of Energy and Resources, Minister of<br />

Labour, and Associate Minister for<br />

Climate Change Issues<br />

10K Rates Club<br />

The latest 10K Rates Club newsletter<br />

is now available on <strong>Federated</strong><br />

<strong>Farmers</strong>’ website, offering an<br />

overview of the Federation’s work and<br />

achievements on local government<br />

financial issues last year and<br />

discussing the Government’s reform<br />

programme and its possible impacts<br />

this year. The 10K Rates Club was<br />

founded in 2004 when <strong>Federated</strong><br />

<strong>Farmers</strong> called on members paying<br />

more than $10,000 a year in general<br />

rates to send in copies of their rate<br />

demands. The purpose was to build a<br />

database of real-world examples of the<br />

high cost of rates to many farmers and<br />

how the property value system of<br />

funding local government is hurting<br />

the rural economy. The 10K Club<br />

continues to be a useful source of data<br />

and a powerful insight into the scale of<br />

the rural rates problem.<br />

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■ What farmers will like: Coming<br />

from a legal background, Bridges is<br />

known as an active and skilful debater<br />

and also as an intelligent politician.<br />

■ Challenges: <strong>Farmers</strong> could be<br />

sceptical about Bridges’ background<br />

as a litigation lawyer, but will<br />

appreciate his rhetorical skills in<br />

Parliamentary debate.<br />

■ Real farm experience? Moving<br />

from the rat-race in Auckland to the<br />

Bay of Plenty was a good start.<br />

Minister for Food safety — Nikki<br />

Kaye (Auckland Central)<br />

Cabinet rank: 20<br />

Kaye was elected for the Auckland<br />

Central seat in 2008 and has proven a<br />

committed constituency MP.<br />

■ Political career to date: Minister<br />

for Food Safety, Minister for Civil<br />

Defence and Minister for Youth<br />

Affairs.<br />

■ What farmers will like: Kaye is<br />

seen as a determined MP who is not<br />

afraid to speak her mind — even when<br />

that does not quite fit the <strong>National</strong><br />

Party line.<br />

■ Challenges: Kaye is the youngest<br />

Cabinet Minister in history and as such<br />

is a bit of an unknown quantity.<br />

■ Real farm experience? Kaye is an<br />

Aucklander through and through, but<br />

has shown an awareness of urban<br />

environmental issues.<br />

Plan your way out of<br />

the drought<br />

Dairy farmers are urged to plan<br />

their way through this drought, and<br />

revisit it on what may be a weekly<br />

basis.<br />

Those with sharemilking contracts<br />

ending on May 31, in particular, need<br />

to make sure their plans are in writing<br />

so that there is no misunderstanding<br />

around feed covers and supplements,<br />

come the end of the season. The<br />

incoming sharemilker will appreciate<br />

this approach.<br />

If the other party does not see the<br />

need to write it down, do it yourself<br />

and send them a copy.<br />

If you are having trouble sitting<br />

down and coming to an agreed management<br />

plan, call in an independent<br />

adviser who can help you come to a<br />

fair agreement. It will be money well<br />

spent.<br />

MCD1094


Ph 0800 327 646 www.fedfarm.org.nz April 2013 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong> 13<br />

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AGRICULTURAL TOURS THROUGHOUT THE WORLD IN 2013<br />

The Top End & Kimberley Cattle Tour July<br />

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Argentina (Rugby & <strong>Farming</strong>) – September/October<br />

Vietnam - October<br />

South America – November/December<br />

WEATHER<br />

The end of a long, dry summer<br />

By Daniel Corbett<br />

MetService weather ambassador<br />

The end of summer of 2012/13 was very<br />

different to the start — we had a very<br />

active December and first half of January<br />

with a prevailing southwesterly flow<br />

bringing active troughs and abundant<br />

rainfall for many areas.<br />

December ended up being, on average,<br />

warmer than normal across New<br />

Zealand, but that was nothing to the<br />

furnace-like heat that developed across<br />

Australia, where day-time highs reached<br />

well into the 30 and 40s, resulting in<br />

significant bush fires.<br />

The neutral weather pattern had<br />

hints of El Nino, perhaps helping keep<br />

large anticyclones over eastern Australia<br />

in place allowing the interior heat<br />

to build. The wind flow around the highs<br />

spread the heat down south and even<br />

over the Tasman to New Zealand.<br />

The tropics were also active in the run<br />

up to Christmas and through the late<br />

part of the summer. Cyclone Evan<br />

became a category four cyclone as it<br />

rampaged across the tropics from near<br />

Samoa and then back across Fiji before<br />

weakening just north of New Zealand.<br />

Freda became a troublemaker near<br />

New Caledonia before weakening, while<br />

Garry was a strong threat in the New<br />

Year moving down from Samoa and<br />

across the southern Cook Islands.<br />

The middle of January saw a shift<br />

with the roaring forties which had been<br />

active across the southern half of New<br />

Zealand during early summer shifting<br />

back south allowing anticyclones to visit<br />

New Zealand once again.<br />

A large anticyclone at the end of<br />

January was quite unique, not just<br />

because of its size, but also the length of<br />

time it lingered over New Zealand. This<br />

brought a long spell of fine weather for<br />

most of New Zealand. Afternoon highs<br />

across much of the country climbed into<br />

the mid- to upper-20s with a few inland<br />

places in the south of the South Island<br />

reaching 30°C or more.<br />

Notably, Wellington had extended<br />

periods of fine days, when it usually<br />

struggles to get more than a couple of<br />

fine days in a row because of its location<br />

and the funnelling effect of the wind<br />

across Cook Strait.<br />

The long, nationwide fine spell was<br />

caused by the upper level wind flow, or<br />

jetstream, and how it behaves when<br />

weather gets blocked. In a westerly flow,<br />

the jet stream undulates across New<br />

Zealand in response to the various<br />

<strong>National</strong> weather patterns for February 4, 2013.<br />

troughs and ridges that pass through.<br />

In a blocking situation the upper wind<br />

flow cuts off in places or, in other<br />

words, gets stuck. This is a bit like a<br />

log-jam in a fast-flowing stream.<br />

The type of weather depends on<br />

where in the blocked weather pattern<br />

you happen to be. In January 2011, the<br />

weather became blocked with the fine<br />

weather east of New Zealand. Most of<br />

New Zealand was in a warm moist<br />

northerly flow, resulting in the Nelson<br />

floods around the New Year.<br />

There was some significant rain on<br />

Tuesday, February 5, with notable rain<br />

fall totals at Mt Cook airport (75mm)<br />

and North Egmont (more than 220mm).<br />

Angle Knob in the Tararuas also had<br />

more than 100mm and 20-30mm fell<br />

quite widely.<br />

Much of the rest of February mainly<br />

saw anticyclones sit across New Zealand<br />

bringing long fine spells. As a<br />

result, many places ended up well<br />

down on rainfall by the end of summer.<br />

In some parts of New Zealand the soil<br />

moisture deficit was in excess of<br />

100mm.<br />

What is to come for<br />

the autumn?<br />

The neutral conditions across the<br />

Pacific will bring an element of variety in<br />

the weather we experience over the next<br />

several weeks. The dominant<br />

anticyclones of the past few weeks will<br />

still be a factor in the coming weeks, but<br />

perhaps to a lesser degree.<br />

Anticyclones will continue to track<br />

across central New Zealand over the<br />

next several weeks bringing extended<br />

periods of dry weather, particularly if<br />

they linger for several days due to upperlevel<br />

blocking.<br />

The seasonal shift north of the anticyclonic<br />

ridge axis will cause them to<br />

track more across central regions and<br />

then perhaps to northern New Zealand<br />

throughout April and May.<br />

Between the anticyclones, fronts and<br />

troughs are expected to cross the<br />

country.<br />

During autumn we should see a slow<br />

transition to more active weather with<br />

low pressure systems likely to move<br />

from the subtropics onto the north and<br />

east of the country, bringing wet and<br />

windy days in early autumn.<br />

By mid-autumn we should see a<br />

return of fronts moving across New<br />

Zealand from the Tasman Sea.<br />

In mid- to late-autumn a pattern<br />

change is likely, with more active fronts<br />

moving from the Tasman Sea and/or<br />

Southern Ocean, onto the South Island.<br />

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14 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong> April 2013 www.fedfarm.org.nz Ph 0800 327 646<br />

EMPLOYMENT<br />

KiwiSaver: What do employers need to know?<br />

As an employer, you are obligated to automatically enroll all new, permanent and eligible employees in KiwiSaver. <strong>Federated</strong><br />

<strong>Farmers</strong> legal advisor Jane Traynor explains what employers need to know and do.<br />

All new employees who will be permanently<br />

employed by you, including parttime<br />

employees, aged between 18 and 65,<br />

will need to be automatically enrolled in<br />

KiwiSaver through you.<br />

The first decision you need to make is<br />

whether you will choose a preferred<br />

KiwiSaver scheme for your employees to<br />

join. If you do choose a preferred<br />

KiwiSaver scheme, you will need to give<br />

each new employee an investment statement<br />

for your chosen preferred scheme.<br />

Contact the preferred scheme to get<br />

copies of this. You must also give employees<br />

a written statement advising<br />

which scheme you have chosen and<br />

notifying them they will be allocated to<br />

that scheme unless they choose otherwise.<br />

Employees are not under any obligation to<br />

join your preferred scheme.<br />

If you do not choose a preferred<br />

scheme, your employees will be allocated<br />

to one of five default provider schemes,<br />

unless they have chosen a scheme themselves.<br />

You will then need to provide each new<br />

eligible employee with a KiwiSaver Employee<br />

Information Pack. Information<br />

packs and forms are available on request<br />

from Inland Revenue by calling 0800 257<br />

773. The information pack will contain<br />

information on automatic enrolment into<br />

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KiwiSaver and provide details about an<br />

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to opt-out of KiwiSaver, or select their<br />

own KiwiSaver scheme to contribute to.<br />

If an employee does ask you for<br />

financial advice about KiwiSaver, you<br />

should avoid providing them with your<br />

own personal opinion. This can be tricky<br />

in practice and we suggest directing<br />

them to the Sorted website,<br />

www.sorted.org.nz, for some plain English<br />

explanations.<br />

New employees who are already<br />

enrolled in KiwiSaver are under an<br />

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you. If they would like to continue<br />

making KiwiSaver contributions, they<br />

must fill out a KS2 form which gives you<br />

the authority to deduct their employee<br />

contributions from their gross salary or<br />

wages.<br />

You are also obligated to provide<br />

information about KiwiSaver to all<br />

existing employees who request it<br />

within seven days of the request. This is<br />

as simple as providing a KiwiSaver<br />

Employee Information Pack to the relevant<br />

employee upon receiving a request.<br />

To successfully enrol your new or<br />

existing employee in KiwiSaver you<br />

must send the employee’s completed<br />

KS2 form and a KS1 form, filled out by<br />

you, to Inland Revenue.<br />

As an employer, you are obligated to<br />

both deduct a percentage of an employee’s<br />

gross salary or wages (the<br />

employee’s contribution) and make employer<br />

contributions on top of his or her<br />

gross salary or wages.<br />

You must begin deducting an employee’s<br />

contributions from his or her<br />

first pay, or the first pay after an existing<br />

employee has opted into KiwiSaver.<br />

Employees must now contribute a minimum<br />

of 3 per cent of their salary or<br />

wages to KiwiSaver, an increase from<br />

the 2 per cent minimum that applied<br />

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before April 1 this year, but can elect to<br />

contribute at a higher rate of either 4 per<br />

cent or 8 per cent.<br />

Currently, it is compulsory for you as<br />

an employer to contribute at least 3 per<br />

cent of your employee’s gross salary or<br />

wages to that employee’s KiwiSaver account,<br />

also an increase from 2 per cent that<br />

applied before April 1. Your employer<br />

contributions must be made on top of the<br />

employee’s gross salary or wages, unless<br />

otherwise agreed between you and your<br />

employee.<br />

You are required to forward all employee<br />

and employer contributions to<br />

Inland Revenue as part of the PAYE<br />

Employer Monthly Schedule. It is Inland<br />

Revenue’s responsibility to ensure all<br />

contributions are sent on to your employee’s<br />

KiwiSaver scheme provider.<br />

When an employee is on injury leave<br />

covered by ACC, you do not need to<br />

continue deducting any employee<br />

contributions once ACC begins paying a<br />

proportion of their salary or wages. You<br />

also do not need to make employer<br />

contributions on their behalf, but can if<br />

you wish to.<br />

■ For more information please call 0800<br />

FARMING or visit the Inland Revenue<br />

website (www.ird.govt.nz/kiwisaver/).<br />

LAND<br />

DRAINAGE


Ph 0800 327 646 www.fedfarm.org.nz April 2013 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong> 15<br />

The big dry’s economic toll on farmers<br />

Westpac economist Nathan Penny looks at the likely impact of<br />

the drought on New Zealand’s economy<br />

Drought is the economy’s Achilles heel<br />

and we cannot emphasise enough the<br />

impact of ‘‘the big dry’’ on NZ Inc.<br />

It is hitting farm incomes, reducing<br />

confidence and spending in rural areas<br />

will fall. But can farmers look to financial<br />

markets for help?<br />

In some cases, the answer is a cautious<br />

‘‘yes’’, in others we do not hold out much<br />

hope. In the end, widespread rain remains<br />

farmers’ best bet.<br />

Clearly, the drought is a major hit to<br />

farmers’ incomes — estimated at upwards<br />

of $600 million for the current season. This<br />

income hit will knock economic confidence;<br />

curtail spending, particularly in rural<br />

areas; while the food manufacturing industry<br />

will suffer too. When we include the<br />

flow-on effects, we estimate an impact in<br />

the vicinity of $1.3 billion.<br />

In normal times, this would go close to<br />

causing a recession in the New Zealand<br />

economy. In fact, drought has been a<br />

contributing factor in each of the last five<br />

recessions.<br />

This time round, however, the impact<br />

is more than offset by the Canterbury<br />

rebuild. One quarter’s worth of the<br />

rebuild will offset the hit to farm incomes<br />

and two quarters will offset the wider<br />

Fenceissuevisibleonexternaldisplayscreen.<br />

www.gallagher.co.nz<br />

GDP impacts on our current estimates.<br />

Not only is drought lowering the<br />

country’s income, it is having<br />

repercussions in financial markets too.<br />

Some of these impacts will help<br />

farmers, while others not so much.<br />

The big dry is putting pressure on<br />

world dairy prices. New Zealand is a<br />

major player in world dairy markets<br />

and the reduction in local production<br />

combined with strong Chinese demand<br />

is forcing world dairy prices higher.<br />

GlobalDairyTrade auction prices have<br />

risen 30 per cent over the last three<br />

auctions, to record levels.<br />

We see room for prices to push<br />

higher. We have increased our<br />

forecasts of Fonterra’s farmgate milk<br />

price for this season by 10c, to $5.65, and<br />

for next season by 20c, to $5.90. If prices<br />

do increase, there is scope for farmgate<br />

milk price forecasts to increase further,<br />

particularly for next season. While this<br />

is cold comfort for the majority of dairy<br />

farmers, others, particularly in the<br />

South Island, will see incomes rise.<br />

For meat farmers, there is no such<br />

light at the end of tunnel. Meat prices<br />

are headed downward. The drought<br />

caused farmers to bring forward<br />

slaughtering and extra supply is putting<br />

downward pressure on prices. This is<br />

compounded by weak lamb markets in<br />

Europe and Britain.<br />

The recovery in meat prices may<br />

come next season as farmers rebuild<br />

their stocks, reducing supply. Having<br />

said that, markets may remain weak,<br />

particularly in Europe.<br />

In our view, the big dry increases the<br />

risk that the Reserve Bank will delay<br />

interest rate hikes. Indeed, markets<br />

have already pushed long-term interest<br />

rates down. Lower for longer interest<br />

rates would help farmers as they look to<br />

manage tight cashflows over what will<br />

be a tough 2013.<br />

We are not convinced, however, that<br />

the big dry will cause the Reserve Bank<br />

to actually reduce the OCR, because the<br />

Reserve Bank governor will not want to<br />

risk further stoking an already heating<br />

housing market.<br />

Our prediction is still that the first<br />

OCR hike will occur in the December<br />

quarter of this year. This call is very<br />

much under review, though, as we digest<br />

the 1.5 per cent rise in GDP, recorded for<br />

the December quarter, and as we<br />

monitor the ongoing drought impacts.<br />

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ECONOMY<br />

Not only is drought<br />

lowering the<br />

country’s income,<br />

it is having<br />

repercussions in<br />

financial markets<br />

too.<br />

We do not, however, expect the big<br />

dry to have much impact on our currency<br />

beyond the cent or two fall that we have<br />

already seen. The Kiwi is trading near 83<br />

cents against the US dollar at the time of<br />

writing, down from around 85 cents in<br />

February.<br />

Financial markets will view the<br />

drought and dairy price rises as temporary.<br />

Other factors such as the Canterbury<br />

rebuild and world events will<br />

dominate impacts of the big dry and<br />

drive further movements in the Kiwi<br />

dollar.<br />

Overall, financial markets are offering<br />

a sliver of hope to some farmers more<br />

than others. As a result, we continue to<br />

nervously watch the weather forecasts<br />

for signs of rain and for more universal<br />

drought relief.


16 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong> April 2013 www.fedfarm.org.nz Ph 0800 327 646<br />

INDUSTRY GROUPS DAIRY<br />

Dairy council and sharemilkers’ meeting<br />

A number of issues were raised at the <strong>Federated</strong> <strong>Farmers</strong> Dairy Council meeting at Waitangi in February. Dairy policy advisor Ann<br />

Thompson noted the discussions.<br />

Housing quality<br />

<strong>Federated</strong> <strong>Farmers</strong> Dairy Council generally<br />

agreed that in order to attract good staff,<br />

houses and facilities must be in good<br />

condition. However, the Council also considered<br />

it was difficult for staff to turn down a<br />

house in poor condition when they really<br />

needed the job.<br />

While the Federation cannot force a<br />

housing standard on farms, we include an<br />

accommodation checklist in our sharemilking<br />

agreements. The condition of the<br />

facilities can be discussed and any promises<br />

to remedy can be noted before sign-up. We<br />

ask that employers honour their promises.<br />

For those with contracts which do not<br />

include this checklist, we ask that farmers<br />

ask themselves a basic question: could they<br />

live in this house during winter?<br />

Take photos of facilities and provide<br />

copies to both parties to keep track of the<br />

condition from the start of the contract.<br />

Mental health<br />

There was a long discussion, which included<br />

the Northland Rural Support Trust, with the<br />

Council sharing stories of work being done in<br />

their own regions.<br />

Signs to look out for include stock in<br />

poor condition and changes in someone’s<br />

physical appearance. Also, a sudden<br />

improvement in a person’s outlook may<br />

be due to them having decided to take<br />

their own life. If anyone gets a call which<br />

does feel not quite right, get involved;<br />

there may not be a second chance.<br />

Actions could be as simple as calling a<br />

service, such as depression.org.nz on 0800<br />

111 757, Lifeline on 0800 543 354 or<br />

Healthline on 0800 611 116. All farmers<br />

should have their local Rural Support<br />

Trust number, which can be found online.<br />

‘Drought Shouts’, Sunday night sharemilker<br />

barbecues and get-togethers can<br />

also make a huge difference.<br />

Sharemilking<br />

agreements<br />

<strong>Federated</strong> <strong>Farmers</strong> will review the Herdowning<br />

sharemilking agreement this<br />

year and go to the Arbitrators and<br />

Mediators Institute of New Zealand for<br />

feedback. An experienced review team<br />

from both the Sharemilkers’ Section and<br />

Sharemilker Employers’ Section will<br />

carry it out. No changes are expected to<br />

be made before the 2013/14 season.<br />

Swaps<br />

This banking tool was discussed as<br />

farmers throughout New Zealand have<br />

been persuaded this was the best tool for<br />

them, without full explanation of disadvantages.<br />

The Council considered few<br />

bankers and farmers really understood<br />

swaps’ full implications.<br />

Variation 6<br />

This variation to Waikato Regional<br />

Council’s regional plan deals with water<br />

allocation and farming in the affected<br />

area was discussed. The council has, with<br />

<strong>Federated</strong> <strong>Farmers</strong>’ help, formed a group<br />

and is working with DairyNZ and dairy<br />

processors to encourage better on-farm<br />

management. Decreasing sediment and<br />

nutrients going into waterways and<br />

improving water efficiency is set within a<br />

reasonable three-year timeframe.<br />

Helping newcomers<br />

The Council discussed the need to<br />

encourage and foster newcomers to the<br />

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farming industry and the support needed.<br />

Trading Among<br />

<strong>Farmers</strong> (TAF)<br />

Both Ian Brown, chairman of the Fonterra<br />

Shareholders’ Council (FSHC), and<br />

Christine Burr, Fonterra’s general manager<br />

shares and payments, spoke on this. The<br />

FSHC is confident TAF will achieve its<br />

purpose and should allow Fonterra to<br />

achieve its strategic directive. Communication<br />

between sharemilker employers and<br />

sharemilkers is even more vital now that<br />

TAF is in place.<br />

Migrant workers<br />

Members were warned not to change<br />

details in employment documentation, including<br />

position descriptions or titles. The<br />

best thing farmers can do to assist<br />

immigrants is to help them to work<br />

towards Level 4 on the New Zealand<br />

Qualifications Framework, the equivalent<br />

of herd manager.<br />

■ The next meeting is the AGM, which will<br />

be held in Ashburton on July 3 and 4.<br />

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DAIRY<br />

Getting perspective matters<br />

By Ann Thompson<br />

Dairy policy advisor<br />

A lesson gained from the <strong>Federated</strong><br />

<strong>Farmers</strong> Dairy Council’s meeting at the<br />

Treaty Grounds in Waitangi was the role<br />

of perspective. How we look on an issue<br />

depends on where we come from and<br />

what we expect.<br />

With this in mind, both the council and<br />

the <strong>Federated</strong> <strong>Farmers</strong> Sharemilkers’<br />

Section embarked on a three-day farm<br />

tour of Northland, right before the formal<br />

annual February Dairy Council meeting,<br />

in order to see how local Northland<br />

farmers manage the local conditions.<br />

The tour started on the west coast of<br />

Northland, taking in farms at Ruawai and<br />

Dargaville which still has the rugged<br />

beauty associated with Ninety Mile Beach<br />

— challenging roads, rustic housing,<br />

wonderful forests and enticing beaches,<br />

with long distances between services.<br />

Interestingly, kumara farming, which<br />

the area is famous for, can generate as<br />

much income as dairying. However, it is<br />

much more labour-intensive than dairying<br />

with much done by hand.<br />

The inland farm we visited just out of<br />

Kaikohe was an eye-opener when it came<br />

to the flooding experienced. For this<br />

farmer, who had three water courses to<br />

deal with, having higher ground where<br />

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stock could be kept safe was essential.<br />

Storms of tropical origin often sweep<br />

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Another challenge with fencing off<br />

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These pests grow at the rate of knots<br />

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Riparian planting is recommended, but<br />

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Some recognition of the work required<br />

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All the farms visited had learnt how to<br />

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A couple of farms had invested in herd<br />

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■ Cows must be acting normally – if<br />

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■ Preconditioned cows travel better<br />

■ All cows should be given magnesium<br />

three to four days before<br />

transporting and on arrival at the<br />

new paddock<br />

■ Stand all cows off green feed<br />

prior to transport for a minimum of<br />

four hours and up to 12 hours, to<br />

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■ Feed these cows straw, hay or<br />

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If going to a new farm, ask the<br />

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18 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong> April 2013 www.fedfarm.org.nz Ph 0800 327 646<br />

INDUSTRY GROUPS MEAT & FIBRE<br />

The status quo leads to peasantry<br />

By Conor English<br />

<strong>Federated</strong> <strong>Farmers</strong> chief executive<br />

About 1000 South Island meat farmers met<br />

in Gore last month to discuss the real<br />

problems the industry is facing around<br />

farming profitabily and sustainabily.<br />

Big questions were raised about the<br />

ability of current supply chain<br />

arrangements to deliver appropriate<br />

returns so farmers and their families can<br />

get ahead and New Zealand as a country<br />

can take advantage of the increasing<br />

market opportunities in a world of more<br />

people, wealth and protien consumption.<br />

As a speaker, I said the status quo leads<br />

to peasantry. About three years ago<br />

<strong>Federated</strong> <strong>Farmers</strong> launched a T150 campaign,<br />

which set the aspiration of farmers<br />

receiving $150 for a mid-season lamb. It is a<br />

simple idea, which right now seems a pipe<br />

dream. It is actually critical to New Zealand<br />

that this target is reached sooner rather<br />

than later.<br />

In recent correspondence with my<br />

counterpart at the <strong>National</strong> <strong>Farmers</strong> Union<br />

in Britain, concern has been expressed that<br />

New Zealand lamb apparently sells at half<br />

the price of their domestically-produced<br />

lamb. If this is indeed the case, on an apples<br />

with apples basis, it is not good for farmers<br />

in either country. There are many anecdotal<br />

stories of New Zealand companies<br />

undercutting each other in the market.<br />

Change needs to happen now and no-<br />

GORE, BLIMEY: About 1000 South<br />

Island meat-producing farmers at a<br />

state-of-the-industry meeting in Gore<br />

last month. PHOTO: OTAGO DAILY TIMES<br />

one is exempt. Too often both farmers<br />

and companies have talked past each<br />

other, suggesting it is the others’ responsibility<br />

to change. The reality of a<br />

dynamic marketplace is everyone needs<br />

to be prepared to make some changes.<br />

The trick is to get sentiment translated<br />

into real action that will actually<br />

make a difference. So, what should be<br />

changed and how? The 2011 Red Meat<br />

Strategy promoted action in three key<br />

areas:<br />

■ In-market coordination<br />

■ Efficient and aligned procurement<br />

■ Sector best practice.<br />

While this strategy specifically, and<br />

perhaps unhelpfully, ruled out recommendations<br />

on industry structure, it does<br />

provide the industry with a useful<br />

framework. However, it is all about<br />

incentives and many of these in the meat<br />

sector are around volume, rather than<br />

value.<br />

Some meat-producing farmers<br />

suggest a meat sector ‘‘Fonterra model’’<br />

would be the silver bullet, but we need to<br />

start unpacking what this model actually<br />

is.<br />

It has to be acknowledged that meat<br />

and milk are different products, with<br />

meat carcasses disaggregating into over<br />

a hundred different components, while<br />

milk essentially gets the water sucked<br />

out of it. However, it is still possible to run<br />

a Fonterra style procurement model. In<br />

this procurement model all farmers<br />

would sell their produce at the farm gate<br />

to one processor/marketer with every<br />

farmer receiving the same price per kilo<br />

for their product, irrespective of when it<br />

was supplied.<br />

It is essentially a nationwide, yearlong<br />

pool system, giving out advance<br />

cash payments and an end of season<br />

adjustment. Any extra revenue earned at<br />

peak times or from high-value customers<br />

is simply tipped into the pool and<br />

everyone benefits or otherwise from it.<br />

It is a pretty straight-forward system<br />

and dairy farmers seem to like it.<br />

For the meat sector to do this would<br />

essentially mean running a nationwide<br />

pool for each grade of meat. This would<br />

mean farmers receive the same price<br />

whether they sold in December, February,<br />

May or September.<br />

As with Fonterra, a kilo price per grade<br />

would be announced at the beginning of the<br />

season, for example $6.50. This would be<br />

reviewed a couple of times during the<br />

season, an advance payment of, say, $3.50<br />

per kilo would be made and extra earned at<br />

peak times or from high value customers<br />

would go into the pool. At the end of the<br />

season there would be an under and over<br />

wash-up. I believe this could work. It would,<br />

however, be a dramatic change for the<br />

meat industry and needs to be more<br />

thought through before being put into<br />

practice.<br />

For some farmers, the Fonterra model<br />

means one company doing most of the<br />

processing and marketing. For meat, this<br />

means consolidation of the farmer-owned<br />

co-operatives and perhaps others.<br />

A suggested alternative is similar to the<br />

old Dairy Board model, where there are a<br />

few processors who toll process and focus<br />

on processing efficiency, while a separate<br />

organisation undertakes much of the marketing.<br />

This would split out the volume<br />

incentives to maximise processing assets<br />

from the incentive to maximise value in the<br />

market.<br />

That there needs to be change by all,<br />

there is no doubt. However, just what those<br />

changes should be is still a work in<br />

progress. Watch this space.<br />

Light at the end of the tunnel for sheep and beef?<br />

By David Burt<br />

Meat & Fibre policy advisor<br />

For a good proportion of sheep and beef<br />

farmers, the light at the end of the tunnel<br />

has, for some time, been the headlight of a<br />

train heading towards them.<br />

Market forces have cut a swathe<br />

through the sector over recent years. For a<br />

lot of farmers the reality has been that<br />

returns from sheep and beef farming<br />

operations have been too low for too long.<br />

Many have converted to more profitable<br />

land uses, such as dairying, dairy support<br />

or forestry.<br />

More recently still, the sector has faced<br />

additional pressures. Like other export<br />

businesses, meat and wool prices have<br />

been badly affected by the New Zealand<br />

dollar’s strength. Adverse economic<br />

conditions in many of our markets,<br />

combined with consumer resistance to<br />

historically high sheep meat prices further<br />

depress farm-gate returns. This has been<br />

exacerbated by last season’s overly<br />

optimistic market positions and projected<br />

increasing volatility around returns in<br />

future.<br />

Additionally, there are increased<br />

expectations by society for the sector to<br />

lift its environmental performance. The<br />

costs of this, and the current drought,<br />

compound the situation.<br />

There are, however, a number of<br />

positives on the horizon.<br />

Meat and fibre farmers are resilient<br />

and independent people with a passion<br />

for what they do.<br />

Given the pressures they face, anyone<br />

without these qualities would have<br />

moved on to other more rewarding fields<br />

of endeavour some time ago. They also<br />

have a good understanding of their<br />

farm’s relationship with the surrounding<br />

environment and, in general, are very<br />

good at improving production levels.<br />

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The burgeoning world population<br />

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On a positive note, building resilience<br />

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Zealand’s ‘‘Collaboration for Sustainable<br />

Growth’’ PGP programme will bring red<br />

meat sector partners together and support<br />

the adoption of best practice behind<br />

the farm gate.<br />

Also Wools of New Zealand achieved<br />

in February the necessary support from<br />

farmers to establish a new strong wool<br />

sales and marketing company. Wool is<br />

often seen as the sector’s Cinderella, but<br />

still is a vital income area. There is hope<br />

thatstrong wool will be restored to its<br />

rightful, high value space in the carpet and<br />

textiles markets.<br />

The short-term future is much less<br />

certain. <strong>Federated</strong> <strong>Farmers</strong> is committed to<br />

responding to concerns of members, developing<br />

polices and implementing plans<br />

based on what they want and need. The<br />

Meat & Fibre Council, led by Jeanette<br />

Maxwell, has recently undertaken a member<br />

survey around farmer behaviour and<br />

other initiatives could follow if required.<br />

To achieve change, industry leaders,<br />

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Ph 0800 327 646 www.fedfarm.org.nz April 2013 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong> 19<br />

GRAINS<br />

INDUSTRY GROUPS<br />

Overseer review questions arable application<br />

By Nick Hanson<br />

Grain & Seed policy advisor<br />

An independent review commissioned by<br />

the Foundation for Arable Research (FAR)<br />

has raised a number of questions about the<br />

suitability of the computer-based nutrient<br />

management tool, Overseer, as a regulatory<br />

tool to apply to arable farmers.<br />

The review report, which was released<br />

earlier this year acknowledges that Overseer<br />

is the best tool currently available to<br />

farmers and regional authorities for<br />

modelling nutrient loss across all farming<br />

systems, however the programme’s accuracy<br />

and interface with respect to arable<br />

farms presents problems.<br />

Overseer, jointly owned by the Ministry<br />

for Primary Industries, Agresearch<br />

and fertiliser companies Ballance<br />

Agrinutrients and Ravensdown, was<br />

originally developed as a nutrient budgeting<br />

programme used by fertiliser advisers<br />

and farm consultants, but it is set to take<br />

on a greater role within the regulatory<br />

framework of regional and unitary<br />

authorities.<br />

As councils work to model, measure<br />

and attempt to regulate agriculturallyderived<br />

nutrient-leaching in response to<br />

the <strong>National</strong> Policy Statement on Freshwater<br />

Management, many farmers have<br />

questioned Overseer’s appropriateness for<br />

the task.<br />

The review panel’s aim was to assess<br />

Overseer on its application specifically to<br />

UNCERTAIN BENEFITS: Questions have been raised around using the nutrient<br />

management computer tool Overseer for arable crops such as this Hawke’s Bay barley.<br />

arable farms. Roger Williams of FAR<br />

said, ‘‘although this computer model has<br />

a well-established role in managing<br />

nutrients in pastoral systems, its use in<br />

estimating nutrient losses from cropping<br />

farms is a new and relatively untested<br />

application’’.<br />

To address these problems, the independent<br />

panel recommended:<br />

■ Further validation of the cropping<br />

model through field experiments and<br />

comparison with other crop model predictions<br />

of nutrient losses<br />

■ An overhaul of the way that users<br />

enter data about crop rotations<br />

■ Introducing independent peer review<br />

into the ongoing process of Overseer<br />

development<br />

■ Information and training so all users,<br />

including regional authorities, understand<br />

Overseer’s strengths and limitations<br />

■ Increasing available funding for further<br />

work on the crop model and other aspects<br />

of Overseer improvement.<br />

The report indicates the cropping<br />

module of Overseer has only been<br />

subjected to limited testing and cites a<br />

number of existing nutrient-loss modelling<br />

programmes against which Overseer<br />

should be evaluated for accuracy, as well<br />

as against the results from ‘‘specific sites<br />

where nitrogen-leaching has been<br />

measured and the detailed model has been<br />

calibrated and tested’’.<br />

Issues were also identified with the<br />

usability of Overseer for arable farmers. A<br />

lot of work is needed to make it possible<br />

for farmers to quickly and adequately put<br />

in required data, especially in the ‘‘Crop<br />

Rotations’’ input screen which does not<br />

adequately allow for a five to seven-year<br />

crop rotation.<br />

In a key recommendation, the independent<br />

reviewers noted that ‘‘like any<br />

model, Overseer predictions have<br />

associated uncertainty in both the farm<br />

management setting and the policy implementation<br />

setting’’ .<br />

They also said it is essential the diverse<br />

range of stakeholders communicate, share<br />

knowledge and undertake training to<br />

ensure regional authorities, farmers and<br />

advisers are all aware of Overseer’s<br />

limitations and strengths.


20 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong> April 2013 www.fedfarm.org.nz Ph 0800 327 646<br />

ADVERTORIAL<br />

Hansen to the rescue<br />

Sick and tired of unreliable, leaking or<br />

jamming trough valves? No end of<br />

farmers find this frustration an ongoing<br />

hassle, stealing precious time and energy<br />

away from the jobs that really need doing<br />

around the farm.<br />

The good news is there is a very simple<br />

solution at hand. Hansen Products, who<br />

are well-known for their reliable poly pipe<br />

fittings, threaded pipe fittings and valves,<br />

have taken on board these frustrations<br />

and designed an innovative range of<br />

Trough Valves that are proving to be very<br />

successful with farmers nationwide.<br />

Their unique and extremely reliable<br />

design goes a long way towards helping<br />

to completely eliminate several of the<br />

ongoing issues farmers have been having<br />

with other branded trough valves.<br />

Aside from all the obvious benefits of<br />

delivering high volume flows, built from<br />

quality materials and packaged with<br />

multiple connection options for every<br />

install, there are a few key ingredients to<br />

these valves that set them apart from the<br />

rest.<br />

The unique Slipper Fit Piston design is<br />

School popular with rural families<br />

Wanganui Collegiate School has<br />

provided an outstanding education to<br />

rural families for almost 160 years.<br />

Historically a large number of our<br />

student body is made up from boys<br />

and girls from a rural background and<br />

that trend continues today with over<br />

35 per cent of our current roll from<br />

farming families.<br />

Wanganui Collegiate integrated<br />

into the state system in January 2013,<br />

thereby securing our future and<br />

allowing us to offer a more<br />

competitive fee for parents. We offer a<br />

unique environment; we are<br />

committed to our seven-day offering<br />

(we still run classes on Saturday<br />

morning followed by compulsory<br />

sport with chapel on Sundays) and we<br />

are equally passionate about coeducation.<br />

In the real world the<br />

genders are not separated.<br />

We believe that we offer the best<br />

preparation for university and<br />

beyond at a very competitive price.<br />

Our boarding students learn how to<br />

live and learn independently within a<br />

very structured and supportive<br />

environment.<br />

Outside of the classroom all of our<br />

students must play a summer and<br />

winter sport. We have a vibrant<br />

The Pacific’s best kept secret — Niue<br />

Picked as the next hottest<br />

destination by those in the know,<br />

Niue is an impressive holiday<br />

destination. Those exclusive few<br />

who have discovered the beauty of<br />

one of the world’s smallest nations<br />

generally start planning their return<br />

before they leave. Niue is a Pacific<br />

Island paradise, one of the smallest<br />

countries on earth and the largest<br />

raised coral atoll in the world.<br />

As a soft adventure and<br />

ecotourism paradise, it’s also one<br />

giant playground. It’s safe, very<br />

clean and very civilised. You can<br />

discover, swim and snorkel in your<br />

own private lagoon, small beach or<br />

swimming cave. Niue is one of three<br />

places anywhere in the world you can<br />

swim with humpback whales — often<br />

just 50m from shore. You can also<br />

such that the Superflo Trough Valve has a<br />

very soft open/close action that virtually<br />

eliminates Stuck Valve Syndrome. Great!<br />

No more flooding around the troughs or<br />

empty troughs starving stock of their<br />

water requirements.<br />

Furthermore, the soft close of the<br />

Maxflo Trough/Tank Valve eliminates<br />

water hammer which can put serious<br />

strain on a well worked system, as well as<br />

self cleaning the valve on closure.<br />

performing arts department with<br />

regular music concerts and drama<br />

productions in our 500-seat theatre<br />

on site.<br />

At this time of year parents of<br />

Year 8 students begin the task of<br />

dive with endless visibility in ginclear<br />

waters, head on a fishing<br />

charter, go on some glorious walks,<br />

explore the endless cave systems<br />

or just relax — it is a tropical island<br />

after all!<br />

Discovering Niue will have you<br />

planning your return before you’ve<br />

even departed so if you want a bit<br />

more adventure then Niue is the<br />

place to visit.<br />

Air New Zealand commences a<br />

twice a week flight schedule that<br />

will run on a fortnightly basis from<br />

April 17. Niue promises to under<br />

promise and over deliver on<br />

anything you have experienced in<br />

the Pacific to date.<br />

The secret is out so you might<br />

want to avoid the rush and book as<br />

soon as possible!<br />

Add to that the super-efficient<br />

operating range of just 0.02 bar all the<br />

way up to 12 bar makes these valves<br />

usable in just about any system.<br />

It’s no wonder Hansen states that they<br />

provide customers with Best Installed<br />

Value since 1958.<br />

‘‘shopping around’’ for the secondary<br />

years. We hope that Wanganui<br />

Collegiate will be one of the options<br />

and look forward to welcoming you to<br />

our campus at some point in the near<br />

future.<br />

Agricultural<br />

tours aim to<br />

get off the<br />

beaten track<br />

Agricultural tours provide a great<br />

opportunity to get off the beaten<br />

track as well as seeing iconic<br />

attractions.<br />

‘‘While our trips have a farming<br />

focus they are suitable for anyone<br />

who enjoys seeing how people in<br />

other countries live and work in rural<br />

areas,’’ says Ron McPhail, managing<br />

director of C R McPhail Ltd.<br />

‘‘We combine an in-depth<br />

understanding of agriculture with<br />

expertise in travel to provide you<br />

with a very special tour.’’<br />

After such a tough summer a visit<br />

this winter to an exciting destination<br />

and a rewarding travel experience<br />

with people who have similar<br />

interests would be a satisfying tonic.<br />

Included in the tours C R McPhail Ltd<br />

is offering in 2013 are Slovenia,<br />

Croatia,<br />

We combine<br />

an in-depth<br />

understanding<br />

of agriculture<br />

with expertise<br />

in travel to<br />

provide you<br />

with a very<br />

special tour.<br />

Bulgaria,<br />

Romania,<br />

Baltic<br />

States and<br />

Finland,<br />

China,<br />

Canada,<br />

Australia<br />

(Top End/<br />

Kimberley),<br />

South<br />

Africa and<br />

South<br />

America.<br />

‘‘China is one of our most<br />

popular tours and South Africa is<br />

our top-rated tour. We have many<br />

years of experience with these<br />

destinations.’’<br />

Talk to us or visit our website to<br />

find out why New Zealand farmers<br />

like to travel on our trips and what<br />

makes the experience so special<br />

and such good value.<br />

Comments like ‘‘Thank you for<br />

the wonderful organisation that<br />

obviously went into the planning of<br />

our trip to Canada/Alaska recently.<br />

We had a fantastic holiday with a<br />

really good group of people and a<br />

reunion already talked about for<br />

the Kiwis on the trip’’.<br />

‘‘Some clients are on their sixth<br />

tour with us! We pride ourselves on<br />

our proven track record in<br />

exceeding client expectations. It’s<br />

our innovative and personal service<br />

that sets us apart.’’


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<strong>National</strong> <strong>Farming</strong> <strong>Review</strong>, Monday April 8, 2013 21<br />

WOOLPRESSES AND<br />

SHEARING MACHINERY<br />

Used and new for sale.<br />

All makes and models<br />

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22 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong>, Monday April 8, 2013


Parliament<br />

Bills in the House<br />

As at the end of March, a number of Bills<br />

relevant to farming were before Parliament<br />

at various stages:<br />

■ Local Electoral Act Amendment Bill<br />

(No 2) — Committee Stage<br />

■ Building Amendment Bill No 4 —<br />

Second Reading<br />

■ Food Bill — awaiting Second Reading<br />

■ Game Animal Council Bill — awaiting<br />

Second Reading<br />

■ Land Transport Management Act<br />

Amendment Bill — awaiting Second Reading<br />

■ Spending Cap (People’s Veto) Bill —<br />

awaiting Second Reading<br />

■ Regulatory Standards Bill — consideration<br />

of report<br />

■ Public Finance (Fiscal Responsibility)<br />

Amendment Bill — Finance & Expenditure<br />

Select Committee<br />

■ Taxation (Livestock Valuation, Assets<br />

Expenditure, and Remedial Matters) Bill<br />

— Finance & Expenditure Select Committee<br />

■ Lobbying Disclosure Bill — Government<br />

Administration Committee<br />

■ Conservation (Natural Heritage Protection)<br />

Bill — Local Government and Environment<br />

Committee<br />

■ Heritage New Zealand Pouhere Taonga<br />

Bill — Local Government and Environment<br />

Committee<br />

■ Resource Management (Restricted<br />

Duration of Certain Discharge and Coastal<br />

Permits) Amendment Bill — Local Government<br />

and Environment Committee<br />

■ Resource Management Reform Bill —<br />

Local Government and Environment Committee.<br />

Other reviews and<br />

consultations<br />

■ Resource Management Act discussion<br />

document, MfE<br />

■ Freshwater reform 2013 and beyond,<br />

discussion document, MfE<br />

■ South Island Conservation Management<br />

reviews<br />

■ <strong>Review</strong> into the structure and function<br />

of the Fertiliser Quality Council, FQC<br />

■ Japanese Honeysuckle and Barberry<br />

control; biocontrol agent import application<br />

consultations, EPA<br />

■ <strong>Review</strong> the Funding Assistance Rate,<br />

NZTA<br />

■ <strong>Review</strong>s the Telecommunications Act<br />

and the Telecommunication Services<br />

■ Obligations, MBIE<br />

■ Mandatory <strong>Review</strong> of all Agriculture<br />

Qualifications, AgITO/PrimaryITO.<br />

FARM DAY — IN DROUGHT<br />

Sam the Fonterra tanker driver shows Wellington Farm Day visitors some of the features<br />

inside his truck on March 17. The ‘<strong>Farming</strong> in Drought’ theme for both Wellington and Rotorua<br />

coincided with a much-needed drop of rain for the North Island. It was a shame there was not<br />

a similar result at the Bay of Plenty Farm Day on March 24. The changeable weather did not<br />

deter the 400-plus people who visited Battle Hill Farm Forest Park near Wellington or about<br />

250 who attended a much wetter Rotorua Farm Day. The aim was to showcase how farmers<br />

and farm animals cope in drought, which was supported by all <strong>Federated</strong> <strong>Farmers</strong> industry<br />

groups, including bees. It was also wonderful to have support from Fonterra, which pitched in<br />

with flavoured milk for children and demonstrations of its impressive milk tankers.<br />

<strong>Federated</strong> <strong>Farmers</strong> believes the teams in Rotorua, Wairarapa and Bay of Plenty deserve to<br />

take a bow. Farm Day is always a big undertaking and doing it during a drought made it doubly<br />

hard. However, they have done a great service to all farmers.<br />

Happenings<br />

■ April 4 — ‘‘Not Another Boring<br />

Farmer Do’’, Tui HQ, Mangatainoka.<br />

■ April 11 — Tui Drought Shout, Tui<br />

HQ, Mangatainoka.<br />

■ April 26-27 — Trees for Bees Conference,<br />

Eastwoodhill, Gisborne.<br />

■ May 8-9 — <strong>Federated</strong> <strong>Farmers</strong> Leadership<br />

(Level 1), Wellington.<br />

■ May 13 — Steak of Origin, Beef Expo,<br />

Feilding.<br />

■ May 16 — Budget Day, Parliament,<br />

Wellington<br />

■ May 22 — BFEA Sustainability Showcase,<br />

Hamilton.<br />

■ May 24 — NZ Dairy Industry Awards<br />

Final, Wellington.<br />

■ June 6-7 — <strong>Federated</strong> <strong>Farmers</strong> High<br />

County conference, Ashburton.<br />

■ For a lot more events, see ‘‘events and<br />

training’’ at www.fedfarm.org.nz<br />

St John’s welcomes<br />

donation<br />

<strong>Federated</strong> <strong>Farmers</strong>’ adverse events<br />

Ph 0800 327 646 www.fedfarm.org.nz April 2013 <strong>National</strong> <strong>Farming</strong> <strong>Review</strong> 23<br />

spokesperson Katie Milne and bee<br />

industry group chairperson and Farmy<br />

Army Generalissimo John Hartnell<br />

visited St John’s South Island Regional<br />

Operations Centre to see the ambulance<br />

communications centre at work, as well<br />

look at a new ambulance.<br />

St John’s was the beneficiary of the<br />

final and largest donation made from<br />

<strong>Federated</strong> <strong>Farmers</strong>’ Adverse Events<br />

Trust after the Christchurch<br />

earthquakes.<br />

INSIDER<br />

THE OFFAL PIT<br />

Ending a bad RAP<br />

Since drought was announced,<br />

right-wing bloggers, left-wing<br />

bloggers and talkback callers<br />

have had a field day with Rural<br />

Assistance Payments, or RAPs,<br />

administered by Work and Income.<br />

One blogger, ‘Cactus Kate’,<br />

sums up many a talkback caller;<br />

why should farmers get state<br />

bailouts, small businesses can’t?<br />

She wrote, ‘‘When people/<br />

trustees/companies sitting on<br />

million dollars of assets can apply<br />

for welfare assistance when the<br />

one major risk of their business<br />

pops up, why cannot anyone? No<br />

doubt the usual twaddle will be<br />

rolled out about farmers being the<br />

backbone of the nation etc...’’<br />

That was her being mild too.<br />

However, it seems to me that<br />

RAPs are the reason for all the<br />

tut-tutting and talkback abuse. No<br />

amount of saying you need to be<br />

bankrupt before you can get one<br />

seems to stop those who believe<br />

farmers are getting privileged<br />

treatment.<br />

These people seem to believe<br />

farmers can rock up to the Beehive<br />

anytime we want using a<br />

special ‘farmer access card’ we all<br />

have. We hit the lift button and<br />

waiting there for us on the ninth<br />

floor is a beaming John Key. Not<br />

only does he give us a cup of tea,<br />

he hands us a briefcase full of<br />

cash to help us out. No questions<br />

asked, nudge-nudge, wink-wink<br />

...yeah, right.<br />

The truth about RAPs is that<br />

they are the dole. They are means<br />

and asset tested just like any<br />

other benefit. Unlike what ‘Cactus<br />

Kate’ may fantasise about in<br />

Hong Kong, where she lives, you<br />

cannot squirrel away money in a<br />

trust either.<br />

Since WINZ is our society’s<br />

safety net for anyone down on<br />

their luck, farmer or not, I ask<br />

why do we need RAPs and the<br />

toxic PR they generate. These<br />

benefits may make politicians feel<br />

good, but farmers can really do<br />

without the bad RAP right now.<br />

■ The Offal Pit is an opinion<br />

editorial not necessarily reflecting<br />

the views or policies of <strong>Federated</strong><br />

<strong>Farmers</strong>.<br />

MEMBERSHIP<br />

New course to support future leaders<br />

<strong>Federated</strong> <strong>Farmers</strong> has added a new Leadership Course programme, Advocacy, Influence & Outcomes. <strong>Federated</strong> <strong>Farmers</strong> general<br />

manager of sales and marketing Jeremy Blandford explains how the Federation is developing farming leaders.<br />

Following a successful pilot in February,<br />

<strong>Federated</strong> <strong>Farmers</strong> is now running an<br />

Advocacy, Influence & Outcomes leadership<br />

programme.<br />

This programme aims to build future<br />

farming leaders’ collaborative engagement<br />

skills and advocacy on the issues, policies,<br />

rules, requirements and compliance that<br />

impact on agriculture.<br />

This means farmers who are acknowledged<br />

for their farming expertise can<br />

better share their knowledge and successfully<br />

advocate in select committee hearings,<br />

council chambers and policy forums.<br />

The Federation believes it is vital<br />

farmers gain these skills to ensure our<br />

ability to productively farm, which is<br />

interlinked with the country’s future.<br />

Our farming sectors have major<br />

issues around water, the environment,<br />

business rules, district and regional<br />

plans, land use and their consequential<br />

effects on economic outcomes.<br />

<strong>Farmers</strong> are not isolated and must<br />

work with other stakeholders to obtain<br />

creative and pragmatic solutions and<br />

outcomes.<br />

Building a pool of farming leaders<br />

with real influence and positive advocacy<br />

skills will help the sector effectively<br />

engage with government and local<br />

authorities.<br />

Advocacy Leadership Course<br />

attendees learn about applying analytical<br />

skills and strategic thinking, communicating<br />

effectively to mixed audiences,<br />

communicating for influence, negotiating<br />

agreement and managing conflict, finding<br />

the truth, interpreting the basics of<br />

technical and scientific information and<br />

its impacts on farming and the community.<br />

These skills are then applied to<br />

scenarios mimicking real-world advocacy.<br />

Participants must actively engage<br />

with each other to achieve an agreed<br />

workable outcome.<br />

Doing so means they experience and<br />

observe the results of applying and using<br />

the new skills.<br />

This programme is designed to establish<br />

real farm leaders who can effectively<br />

influence the development of policies, rules<br />

and regulatory requirements to better<br />

support sustainable and profitable farming.<br />

<strong>Federated</strong> <strong>Farmers</strong> has seen<br />

participants in this and the level one and<br />

two leadership development programmes<br />

grow their skills and confidence when<br />

representing their sector.<br />

■ CONTACT <strong>Federated</strong> <strong>Farmers</strong> at 0800 327<br />

646 for further information or visit the<br />

website, www.fedfarm.co.nz.


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