Country Could Weather Economic Storm Better Than Cities

June 5, 2008

The ag-sag of the 1980s influenced my generation as the 1930s depression affected that of my parents. We determined never to be that vulnerable to the vagaries of political and economic cycles again and while many are starting to worry about the economic outlook farmers and rural communities are much better placed than we were 20 years ago.

 

The sudden loss of subsidies plus a high dollar, inflation and interest rates above 20 percent and low commodity prices had a devastating impact in the 80s. Land prices plummeted leaving many of us owing more than the value of what we owned. As we retrenched those who worked for or provided services to us, and processed our produce lost work and customers. Eventually the impact of the ag-sag spread from farms to rural communities and then to towns and cities, and the downturn was then aggravated by the 1987 share crash.

 

Now, interest rates and inflation are higher than desirable, but still well below the levels we faced 20 years ago and not all sectors are getting poor returns. Cropping farmers are enjoying a long awaited upturn and the dairy payout is at record levels. While sheep and beef incomes are dismal it is not like the 80s when farmers received bills for sending stock to the works because the transport and killing costs exceeded the price of the animals.

 

Higher land prices mean most still have good equity in their properties too although rising land values are not going to keep pace with many repeats of last season’s losses. However, while prices have a long way to go to make sheep and beef farming sustainable meat prices are improving and sheep and beef farmers can take heart from what is happening in other sectors.

 

While the rise in dairy and grain prices was anticipated, no-one picked the increase would be as fast and as great as it has been so there is hope for a similar resurgence in the meat industry. Beef prices are on record highs in the United States, it is only the high exchange rate which is diluting the returns to our farmers. The growing demand for protein throughout the world which is helping dairy farmers should transfer into meat prices soon. And the huge decrease in stock numbers in the wake of last year’s drought in Australia and drought and dairy conversions here means demand will outstrip supply and those farmers who have stuck with sheep and beef are well placed to take advantage of that.

 

The ag-sag hit North Otago particularly hard because it coincided with another of the recurring droughts which plagued the district. We’ve had only about 1/4 of our annual rainfall in the first half of the year, but the impact of dry weather will never be as bad as it was 20 years ago because a far greater area is irrigated now.

 

Reserve Bank Governor Alan Bollard is predicting tough  times ahead.

 

Dr Bollard said:

* Household spending – the main driver of economic growth in the 2000s – will contract over the next couple of years, despite the Government’s announced tax cuts.

* Economic growth will come to a virtual standstill this year and will grow well below par at 1.4 per cent in the March 2010 year.

* House prices are forecast to plunge from their peak last year, by 22 per cent when inflation was taken into account.

* Unemployment will almost double to 6 per cent over the next three years and job creation will go backward over the next four years.

In the 80s the recession was felt first and hardest on farms and in the provinces. This time because of the growing international demand for what we produce so well, the outlook for agriculture is brighter which means the provinces may be protected from the worst of what looks like an urban-led downturn.


Is the publisher breaching the EFA too?

June 5, 2008

Courier Country, a monthly paper which is delivered free to rural mailboxes from North Otago to Mid Canterbury, arrived with yesterday’s mail.

 

Just like its stable mate The Courier  about which I blogged last week  it has an advertisement for Timaru Labour Government MPs under a Labour logo.

 

I think this is breaching the EFA because there are no Labour Government MPs. It is therefore an advertisement for Labour so needs to be authorised and its cost accounted for in the party’s election return.

 

If I am right, is it just the party which is breaching the EFA or are the paper and the website, also falling foul of the law?


Tomato & Capsicum Exports Suspended

June 5, 2008

Exports of tomatoes and capsicums  have been suspended after the discovery of a debilitating bacterium in three North Island hot houses.

 

MAF Biosecurity has withdrawn phytosanitary certification for fresh tomato and capsicum exports until further notice and says it’s a significant find which could impact on export markets.

 

Total exports of tomatoes are valued at $7.3 million, while capsicums are worth $34m. Australia is the largest importer of the products, while Japan, the Pacific Islands, United Arab Emirates and Hong Kong are other capsicum markets. Those countries have been informed about the outbreak.

MAF director of border standards Tim Knox said the withdrawal of certification was a precautionary measure until more information about the bacterium was known.

“Initial findings suggest that the bacterium may be transmitted by a small insect called the tomato/potato psyllid.”

He said there were no considered human health issues associated with the bacterium or with eating tomatoes or capsicum.  At this time of year exports of tomatoes and capsicum are negligible – they usually begin on a large scale in October. The bacterium affects both the growth and quality of plants and reduces yield.

 Border incursions by pests and diseases pose an enormous risk to our economy but a lot of people don’t understand that and some who ought to, don’t care.

When I was coming home from Australia the airport x-ray picked up a jar.  I told the MAF officer it was only hand cream but he said sorry, he had to check it. I said there was no need to apologise because I was from a farm and understood the importance of border security; he replied that meant nothing. The previous day he’d caught two farmers returning with muddy boots and they abused him when they were fined.

 

Not all infringements are deliberate. An Australian friend flew in to New Zealand with a pair of boots for his daughter who was working here. He forgot about them when he was filling in the MAF declaration form but they showed up on the x-ray and the MAF officer pulled them out for inspection. Rod had scrubbed the boots before he’d packed them and the MAF man said because of that he wouldn’t be fined but he did get a written warning that next time there’d be no leniency.

 

These examples ought to give us confidence in our border protection, but it isn’t always this strict. A couple of years ago a friend from the USA who had been on farms in Argentina came to New Zealand with work boots in his case. He too forgot to declare them and they weren’t picked up by MAF screening.

 

Unless everything in every bag is checked, there will always be an element of luck in whether or not something untoward comes in with a traveller, even if they pack carefully. We brought some wine home from Argentina and an insect crawled out of the bubble wrap as I was unpacking it. I cut it in half and burned it so no harm was done but it made me realise how easily something could come in by accident.

 

However, more worrying than missing something by chance is the experience of a friend who returned to New Zealand after shearing in Britain during the foot and mouth outbreak. He explained this when he showed his hand piece to the MAF inspectors but they weren’t at all concerned and the shearer had to persuade them to take his gear for cleaning.

 

Our borders have already been breeched by didymo, varroa bee mite and now this insect which is attacking the tomatoes and capsicums so fears that it’s a matter of when, rather than if, we face an incursion which infects farm animals are realistic.


Blokes still won’t eat greens

June 5, 2008

Blokes just won’t eat  their vegetables according to the latest national health survey.

 

The proportion of men eating enough vegetables, already lower than for women, declined by 7.3 percentage points, to 56 per cent, from the last survey in 2002/3.

 

A mate who doesn’t eat vegetables reckons he doesn’t need to because he gets his greens second hand: lambs eat grass and then he eats the lamb.

 

He’s in marketing and was giving away lamb samples at a US supermarket. He offered a taste to a customer who turned it down because she was a vegetarian. My mate replied, “That’s okay, so was the lamb.”


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