National-Farming-Review - Federated Farmers
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National-Farming-Review - Federated Farmers
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APRIL 2013<br />
South Island meat-producing farmers<br />
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 />
REGIONAL POLICY<br />
Provincial spotlight<br />
Getting through drought in Hauraki and<br />
Coromandel one day at a time P8<br />
Everyone wins<br />
The community effort to clean up<br />
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INDUSTRY GROUPS<br />
Perspective matters<br />
Seeing and understanding different<br />
regions’ issues in dairying P17<br />
Measuring success<br />
Overseer may not be the best tool<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 />
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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 />
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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 />
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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 />
■ If you also wish to inform <strong>Federated</strong><br />
<strong>Farmers</strong> about your concern please call 0800<br />
327 646.<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 />
small town volunteer brigades.<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 />
Hopefully, we will get some rain<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 />
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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 />
negotiating tables, but that may lead him to a new job at the World Trade Organisation sooner<br />
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 />
Some of the best of our Aussie neighbour. Mt<br />
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spectacular landscapes and vibrant colours.<br />
Follow in the footsteps of the early drovers and<br />
visit iconic cattle stations, including Victoria<br />
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aboriginal rock art, sightseeing in Darwin and<br />
many other highlights.<br />
South Africa - August<br />
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cuisine, friendly Afrikaaner hospitality.<br />
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Vietnam – October<br />
This tour is designed to give you a<br />
good insight into the farming, beauty,<br />
history and culture of Vietnam. Hanoi,<br />
Halong Bay, Romantic Perfume<br />
River, Imperial Citadel in Hue, Da<br />
Nang, Long Phuoc Tunnels, Ho Chi<br />
Minh City. Visit vegetable and rice<br />
farmers, fish farm and rubber plantation.<br />
See how this country is developing<br />
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We invite you to join other happy clients many of whom have travelled on<br />
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Slovenia,Croatia,Bulgaria & Romania – May/June<br />
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China - June<br />
Baltic States & Finland – June/July<br />
USA Beef & Calgary – June/July<br />
South Africa – August<br />
Eastern USA – September<br />
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 />
employee’s rights should he or she wish<br />
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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BRANCHES<br />
NATIONS WIDE<br />
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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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 />
through the region in summer and<br />
autumn, dumping large volumes of<br />
water. Fencing off the streams with<br />
floods tearing down fences, is an issue<br />
throughout the region.<br />
Another challenge with fencing off<br />
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FARMER TRAVEL FOR 2013<br />
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These pests grow at the rate of knots<br />
and then spread into paddocks. I am sure<br />
there is not one farmer in the region who<br />
would thank that early settler who<br />
bought in bushels of gorse seed, thinking<br />
sheep would find it more palatable than<br />
anything else.<br />
Riparian planting is recommended, but<br />
intensive weed control is needed for some<br />
years before the desired plants are wellenough<br />
established to crowd out weeds.<br />
Some recognition of the work required<br />
to manage riparian margins would go a<br />
long way, as would some help, as farmers<br />
tackle a mountainous task.<br />
Kikuyu grass is also prevalent<br />
throughout the region. <strong>Farmers</strong> are<br />
coming to grips with how to manage it so<br />
that it is useful to stock, but it does take<br />
an active hand to do this. An alternative is<br />
to use more maize as a base feed.<br />
All the farms visited had learnt how to<br />
cope with their conditions, whether clay<br />
or sandy soils, a high water table or being<br />
prone to drying out over summer.<br />
A couple of farms had invested in herd<br />
homes or covered, open-sided sheds,<br />
where stock could be stood-off during the<br />
height of the summer or the wet of the<br />
winter. These structures create a helpful<br />
breeze as well as shade, taking the<br />
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two.<br />
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INDUSTRY GROUPS<br />
Top tips for<br />
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Remember that:<br />
■ Cows must be fit and healthy<br />
■ Body conditions score must be at<br />
least 3.0<br />
■ Cows must able to stand evenly<br />
on all four legs<br />
■ Cows must be acting normally – if<br />
not, call the vet<br />
■ 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 />
empty themselves<br />
■ Feed these cows straw, hay or<br />
baleage, with free access to water,<br />
during this stand-off time.<br />
If going to a new farm, ask the<br />
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stock closely and feed them appropriately.<br />
Transporting stock is difficult for<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 />
such as <strong>Federated</strong> <strong>Farmers</strong> must play their<br />
part, as must other sector stakeholders<br />
such as meat processors.<br />
The Federation urges all farmers to<br />
think about changes needed for the sector<br />
to be sustainable.<br />
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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 />
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Their unique and extremely reliable<br />
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Aside from all the obvious benefits of<br />
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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 />
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committed to our seven-day offering<br />
(we still run classes on Saturday<br />
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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 />
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Our boarding students learn how to<br />
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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 />
Serviced going order<br />
Hydraulics, no tramps, jetters,<br />
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We also buy and trade.<br />
Phone Alan 027-451-0644<br />
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SOIL MOISTURE SENSORS<br />
RAINGAUGES & WEATHER STATIONS<br />
FARM INFORMATION NETWORKS<br />
RESOURCE CONSENT MONITORING<br />
MEASURE - MONITOR - MANAGE<br />
Matt Brown Ph (06) 8367686 - Mob 021 243 7741<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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