Rural round-up

February 16, 2014

Price fixing doesn’t work Part XVII – Tim Worstall:

Thailand is finding out, in a most painful manner, what happens to those who try to fix prices:

Thailand, once the world’s biggest exporter, is short of funds to help growers under Prime Minister Yingluck Shinawatra’s 2011 program to buy the crop at above-market rates. After the government built record stockpiles big enough to meet about a third of global import demand, exports and prices have dropped, farmers aren’t being paid, and the program is the target of anti-corruption probes. Political unrest may contribute to slower growth in Southeast Asia’s second-largest economy.

In order to curry favour with the rice farmers who compose a substantial part of the electorate prices were fixed and fixed high. The inevitable thus happens, magically more is produced than anyone wants to consume and here at least it is looking like the government will go bust over it. “Produced” is of course a flexible word: there are long running reports of rice being smuggled over the Burmese border to take advantage of those high Thai prices. . . .

NAIT helps clear Northland TB infection:

ONLY ONE bovine tuberculosis (TB) infected herd remains in Northland.

Six other herds have been cleared by TBfree New Zealand. The single, remaining infected herd has recently had a whole herd TB test and is also on the verge of being cleared of the disease. The six other herds were linked by stock movements made before the disease was diagnosed.

TBfree Northland committee chair Neil MacMillan QSM said the cooperation of farmers and landowners in allowing TB testing and wild animal control contractors’ access to their properties to remove the disease was appreciated. . .

Rain and visitors pour into Waimumu – Terry Brosnahan:

It was cold, wet and muddy, but the money still poured in at the Southern Field Days at Waimumu, near Gore, this week.

Persistent rain on the second day of the three-day event didn’t deter farmers from attending and spending.  

Exhibitors spoken to reported strong sales and enquiries. They said farmers and contractors had done their research and were ready to do business rather than just come for a day out.

Field days chairman Mark Dillon said 12,100 people paid to attend the first day and 12,500 the second. Figures for Friday, the final day were not available when Farmers Weekly went to print. In 2012 a record 33,000 people went through the gates of the biennial event. Based on the area filled, a record number of cars were parked. . . .

Biocontrol bugs on show at Waimumu:

THEY’RE CREEPY, they’re crawly, and they’re on display in the Environment Southland marquee at Southern Field Days.

Following on from biocontrol success in several areas, a raft of biocontrol agents including Dung beetles, Broom galls mites, Green thistle beetles; Gorse soft shoot moths and Ragwort plume moths are making an appearance in the council’s tent this year.

Senior biosecurity officer Randall Milne says it’s an opportunity to educate the public about biosecurity and biocontrol agents. . .

Success: farming smarter, not harder

Fifteen years ago Doug Avery was locked into failure.

The Marlborough sheep and beef farmer was barely coping, personally and financially, after years of successive drought had ravaged his farm.

“The severity of eight years of drought, including four one-in-one-hundred-year droughts, was so bad that I recognised the road that I was travelling was completely stuffed,” Avery says.

His 1500ha farm, Bonaveree, overlooking the Dominion Salt facility at Lake Grassmere, has been in the family for nearly 100 years.

But the glorious sunshine and drying nor’westerly winds that create perfect conditions for extracting salt from seawater were destroying the 59-year-old and his farming business.  . .

From white gold to kiwi gold:

Exchanging the dairy farm for kiwifruit vines came down to seeing the golden-sweet potential that was ripe for the picking for Bay of Plenty couple Elaine and Wayne Skiffington.

After 28 years of dairy farming, the couple decided to invest all their efforts into kiwifruit around 12 years ago and have never looked back.

“We saw the potential kiwifruit had to offer and went for it,” Wayne says.

Originally purchasing their 50 hectare property in Pongakawa, in the Western Bay of Plenty 20 years ago for run-off purposes for the dairy farm, it also happened to include a kiwifruit orchard. Not knowing much about kiwifruit but not wanting to get rid of the vines, the couple decided to lease the orchard to Direct Management Services (DMS), while they ran the farm. . .


Lost in Translation

February 16, 2014

Open large picture

Story People by Brian Andreas.

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Less than 2% of land foreign owned

February 16, 2014

The sale of Synlait farms to a Chinese controlled company brought the usual xenophobic response.

However, OIO approval for the sale of three North Otago farms to Cragimore Investments went unremarked.

That adds credence to the belief that at least some of the opposition is racially motivated.

Whatever, the motivation, a lot of it is based on the erroneous belief that we’re in danger of becoming tenants in our own country when in fact only 2% of land is foreign owned.

The sale of Synlait Farms to a Chinese-controlled buyer is part of a process ensuring New Zealand grows the right products to meet world demand, NZ Institute of Economic Research (NZIER) economist Chris Nixon says.

“That’s the fundamental point – land must reflect world prices because that’s how we decide what to grow on the type of land we’ve got,” Nixon said.

NZIER didn’t comment on the merits of individual deals but the trend was important for NZ to be a successful part of an international world, he said.

Nixon, who has written research papers on foreign direct investment, said the level of overseas ownership of land in this country was low by world standards and wasn’t growing quickly.

 “We’ve missed out really. The land is seen as relatively expensive and we are a long way from world markets.

“The deals we see are high profile but they are small and it tends to be spiky – it happens now and then.”

NZIER studies showed less than 2% of NZ land was owned by foreigners. The exact level of farmland ownership by foreigners wasn’t known but it would be within that range, Nixon said.

Most of the acreage was expected to be in forestry.

Less than 2% is a very small amount and that inwards investment brings benefits.

Waikato University professor of agri-business Jacqueline Rowarth said overseas investment helped maintain farm values and protect the high debt levels held in the dairy sector.

Restricting sales would make many current farmers “green round the gills” because of the impact on their farm values and debt they had taken on.

“Treasury says we haven’t got enough money coming in as a country to make investments and the Reserve Bank says that dairying debt is a major issue if things go wrong.

“Without the interest shown by overseas buyers the value of farms would drop.” . . .

The benefits aren’t just to those who sell the land.

          SFL will invest $20 million to develop the Synlait farms and Pengxin is spending about $18m on development in the North Island.

The multiplier effect of that level of investment in infrastructure and services in a regional economy meant everyone would benefit, Rowarth said.

The proof was in the Southland economy, which was booming because of dairy conversions. Dairy investment involved huge expenditure.

Rowarth also counters the myth that foreign owners compete unfairly with locals.

While overseas investment would maintain farm values, it wasn’t pushing prices out of the reach of New Zealanders as long as milk prices and operating costs were at levels to make the farm business profitable, she said. . . .

While foreign direct investment was important for the economy, it was also important for New Zealanders to capture the foreign trade benefits through ownership of the processing and marketing companies, Rowarth said.

“I’m less worried about the foreign ownership of land than I am about the companies, because that is where the brands and the value is.

“We’ve got companies like (PGG) Wrightson and now Synlait Milk majority overseas owned and the questions are where are the profits going? Are they coming back to NZ?”

It’s not the profits but the loss of  intellectual property a company like PGGW has in seed development which might be of concern. But there’s not the emotional attachment to IP the way there is to land.

Synlait Milk had said it was not paying dividends but would invest in its assets and the risk was  NZ investors would sell out if they weren’t getting an income from it.

Nixon has also noted greater reaction to farm acquisition than to foreigners buying agri-businesses, saying that was surprising when agri-business had more impact on the daily lives of New Zealanders.

Having open markets that encouraged overseas investment was important for credit rating agencies, he said.

Without that NZ would face greater interest costs on overseas borrowing.

Higher interest rates, and the inevitable increase in the value of our dollar that would follow, would be a very high cost for banning sales to overseas interests when such a small amount of land is owned by foreigners.


Trend matters

February 16, 2014

Individual poll results show variations in rises and falls but the trend is consistent.

The latest Fairfax Media Ipsos poll has

National: 49.4% (Oct 2013 Fairfax-Ipsos poll: 50.2%)
Labour: 31.8% (33.6%)
Greens: 10.00% (10.7%)
NZ First: 3.6% (2.3%)

Other parties were in margin-of-error territories, led by Colin Craig’s Conservatives, which was up 1.3% to 2%. Kim Dotcom’s putative Internet Party drew no support.

National is still unusually popular for a second term government and Labour isn’t any better off with a new leader and the baby bribe.

It’s still several months until the election but the trend is encouraging for the centre right and must be causing considerable angst among the left.


Sunday soapbox

February 16, 2014

Sunday’s soapbox is yours to use as you will – within the bounds of decency and absence of defamation. You’re welcome to look back or forward, discuss issues of the moment, to pontificate, ponder or point us to something of interest, to educate, elucidate or entertain, to muse, amuse or bemuse.

>Positivity's photo.


February 16 in history

February 16, 2014

1032 Emperor Yingzong of China, was born  (d. 1067).

1646  Battle of Great Torrington, Devon – the last major battle of the first English Civil War.

1770 Captain James Cook sighted what he called Banks Island but later discovered was a peninsula.

James Cook sights Banks 'Island'

1804  First Barbary War: Stephen Decatur led a raid to burn the pirate-held frigate USS Philadelphia (1799).

1838 Weenen Massacre: Hundreds of Voortrekkers along the Blaukraans River, Natal were killed by Zulus.

1852 Studebaker Brothers wagon company, precursor of the automobile manufacturer, is established.

1859 The French Government passed a law to set the A-note above middle C to a frequency of 435 Hz, in an attempt to standardize the pitch.

1899 President Félix Faure of France died in office.

1899 – Knattspyrnufélag Reykjavíkur Iceland‘s first football club was founded.

1918 The Council of Lithuania unanimously adopted the Act of Independence, declaring Lithuania an independent state.

1923 – Howard Carter unsealed the burial chamber of Pharoh Tutankhamun.

1926 Margot Frank, German-born Dutch Jewish holocaust victim, was born (d. 1945).

1934 – Austrian Civil War ended with the defeat of the Social Democrats and the Republican Schutzbund.

1934 – Commission of Government was sworn in as form of direct rule for the Dominion of Newfoundland.

1936 – Elections brought the Popular Front to power in Spain.

1937 – Wallace H. Carothers received a patent for nylon.

1940 Altmark Incident: The German tanker Altmark was boarded by sailors from the British destroyer HMS Cossack. 299 British prisoners were freed.

1941  – Kim Jong-il, North Korean leader, was born (d. 2011).

1947 – Canadians were granted Canadian citizenship after 80 years of being British subjects. Prime Minister William Lyon Mackenzie King became the first Canadian citizen.

1954 – Iain Banks, Scottish author, was born.

1956 Vincent Ward, New Zealand director and screenwriter, was born.

1957 The “Toddlers’ Truce“, a controversial television close down between 6.00pm and 7.00pm was abolished in the United Kingdom.

1959 John McEnroe, American tennis player, was born.

1959 Fidel Castro becomes Premier of Cuba after dictator Fulgencio Batista was overthrown on January 1.

1960 Pete Willis, English guitarist (Def Leppard), was born.

1961 Andy Taylor, English musician (Duran Duran, The Power Station), was born.

1961 – Explorer program: Explorer 9 (S-56a) was launched.

1968 – In Haleyville, Alabama, the first 9-1-1 emergency telephone system went into service.

1973  Cathy Freeman, Australian athlete, was born.

1978 – The first computer bulletin board system was created (CBBS in Chicago, Illinois).

1983 – The Ash Wednesday bushfires in Victoria and South Australia claimed the lives of 75 people.

1985 – The founding of Hezbollah.

1986 – The Soviet liner Mikhail Lermontov ran aground in the Marlborough Sounds.

1987 – The trial of John Demjanjuk, accused of being a Nazi guard dubbed “Ivan the Terrible” in Treblinka extermination camp, started in Jerusalem.

1991 – Nicaraguan Contras leader Enrique Bermúdez was assassinated in Managua.

1999 – Across Europe Kurdish rebels took over embassies and hold hostages after Turkey arrested one of their rebel leaders, Abdullah Öcalan.

2005 – The Kyoto Protocol came into force, following its ratification by Russia.

2005 – The National Hockey League cancelled the entire 2004-2005 regular season and playoffs, becoming the first major sports league in North America to do so over a labour dispute.

2006 – The last Mobile Army Surgical Hospital (MASH) was decommissioned by the United States Army.

2013 – A bomb blast at a market in Hazara Town in Quetta, Pakistan, killed more than 80 people and injures 190 others.

Sourced from NZ History Online & Wikipedia


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