Quote of the day

August 27, 2015

If you sit in a room with people with diametrically opposed views, you’ll ultimately find you have 80 per cent in common. Do you want a better environment, a world your kids can live in, to leave your farm a better place when you leave? We found in the GM debate that when you isolate the fundamentalists, they are never going to change their view. It’s about taking people with you; not ‘I’m right and you are wrong.’ By giving a bit, we’ve gained a lot in the last five years. . . Dr William Rolleston.


Rural round-up

August 21, 2015

Reducing waste to feed the world:

A 2013 Asia-Pacific Economic Cooperation (APEC) agreement to reduce food waste by 10 percent across the region is picking up pace as researchers and technical team members work towards their 2017 goal of developing effective strategies and actions to address urgent global food waste issues.

A third of the edible parts of food produced for human consumption is lost or wasted. That translates into about 1.3 billion ton per year. Lincoln University Associate Professor James Morton says reducing food waste is the logical first step in meeting the needs of a growing world population, which is predicted to reach nine billion by 2050. He recently attended the second of three APEC ‘Multi-Year Project’ meetings focused on addressing global food waste, where he spoke around the need to measure and reduce wastage in the livestock chain. . . 

Democracy, apathy or revolution – Allan Barber:

MIE has to be given credit for its persistence with its campaign to persuade Silver Fern Farms and Alliance to look seriously at the benefits of merging as opposed to continuing to beat their respective heads against the brick wall of competition. But the outcome depends on several planets aligning at the same time.

The present state of flux exists because of the uncertainty surrounding the results of SFF’s capital raising exercise, still to be announced at the time of writing, the outcome of two special general meetings called by a minimum of 5% of the shareholders in the cooperatives, and last but not least, the attitude of the majority of those shareholders.

The latest step in this process is the concept of Newco – the Visionary Meat Cooperative which expands on the Big Red proposal contained originally in MIE’s Pathways to Long-term Sustainability report launched in April. There is more detailed financial analysis in the latest concept plan which implies a net profit of $92.4 million in the fourth year after merger compared with a combined profit of $6.7 million if the companies remain separate. . . 

Revolutionary new trawling method improves quality of catch:

A revolutionary new sustainable trawling method is showing great potential for increasing the value of New Zealand’s fisheries by more than $43 million per year by 2025, industry leaders heard in Wellington today.

The Precision Seafood Harvesting (PSH) technology known as a Modular Harvest System (MHS) is a potential replacement for traditional fishing methods. Using a large flexible PVC liner with specifically sized holes along its length, it allows undersized fish to escape before being brought on board a fishing vessel. In addition, the fish that are brought on board stay in good condition because they are still swimming in the liner when they’re on the deck, resulting in less stress and reduced likelihood of injury. . . 

Seizing the global opportunities for New Zealand seafood:

The growing global demand for environmentally sustainable, natural, healthy food offers great opportunities for the New Zealand seafood industry, Seafood New Zealand Chairman George Clement says.

Speaking at the New Zealand Seafood Industry Conference in Wellington today, Mr Clement referred to the Food and Agriculture Organisation’s (FAO) prediction that global food production will need to increase by 40 per cent by 2030 and seventy per cent by 2050.

Growth in global seafood production (3.2 per cent annually) continues to outpace population growth (1.6 per cent annually), he said. . . 

New Zealand fish stocks performing well:

New Zealand’s fisheries are performing well overall, Dr Pamela Mace, the Principal Advisor Fisheries Science, with the Ministry for Primary Industries said today.

She was providing an update on the status of New Zealand’s marine fisheries at the New Zealand Seafood Industry conference.

“New Zealand’s fisheries are performing extremely well overall, at least as good as or beyond the standard of the best in the world,” she said. . . 

New Role Encourages Home Grown Talent:

Beef + Lamb New Zealand (B+LNZ) Genetics has appointed Dr Phillip Wilcox as its inaugural senior lecturer in quantitative genetics* at the University of Otago.

Dr Wilcox has a background in molecular and quantitative genetics and comes from the forestry-focused Crown Research Institute, Scion, where he was a senior scientist. He was also a part-time senior research fellow with the University of Otago’s Department of Biochemistry, working in the field of human genetics. . . 

Seeka Kiwifruit Industries Six Months to 30 June 2015 [Unaudited]:

Directors and management are pleased to present Seeka’s financial results for the six months to 30 June 2015. It was a challenging six months for the Company with a fire significantly damaging Seeka’s Oakside post-harvest facility just prior to harvest, then having to focus on managing a record 27.7m trays of kiwifruit; the first major lift in production since 2011’s previous high of 27.1m trays.

Profits are up. Profit before tax this half year is ahead of the previous corresponding period (pcp) by $2.87m [+115%] at $5.36m, reflecting record kiwifruit volumes handled by post-harvest along with good earnings achieved by the orchard division. The half year results include an allowance for the full second year cost of the three-year grower share scheme totalling $2.55m. . . .

Ballance Farm Environment Awards good for farmers and good for the industry, say Horizons entrants:

Halcombe dairy farmers George and Ellen Bartlett entered the 2015 Horizons Ballance Farm Environment Awards (BFEA) because they wanted to support their industry and learn more about sustainability.

Winning three category awards in their first time in the competition was a bonus for the Bartletts, who run a 950-cow operation on 526ha north of Feilding.

“We certainly didn’t expect to win anything,” says Ellen, “we entered because we wanted to find out what we were doing right and what things we could improve on in future. We also felt it was important to support the awards because they do such a great job of showcasing the good work being done by farmers.” . . 

Share Farmer Contest Heralds New Era:

The 2016 Share Farmer of the Year competition has big boots to fill – taking over from the highly regarded sharemilker competition.

New Zealand Dairy Industry Awards Executive Chair Gavin Roden says the Share Farmer of the Year is a hybrid of the sharemilker competition, with changes that better position it within the dairy industry’s evolving farm ownership and employment structures.

“We think the changes will make the contest better and enable more people to enter and gain the benefits from entering. . . 

Wanaka lake weed reduced by two thirds:

Lake Wanaka is healthier than it has been in decades, thanks to weed control work led by Land Information New Zealand (LINZ), Minister for Land Information Louise Upston said today.

“In 2005, LINZ and a number of other agencies developed a 10-year strategy to deal with lagarosiphon. A decade on, two-thirds of the lake is clear of the aquatic weed, and LINZ is ready to begin the next phase of control work.

“These results show how LINZ’s collaboration with others is helping protect New Zealand’s iconic landscapes and waterways,” Ms Upston said. . . 


Rural round-up

August 17, 2015

More women working NZ farms – Suzette Howe:

New Zealand is seeing a rise in the number of women working in farming. For years farming has been mainly viewed as a man’s world, but the tide is turning.

Nestled away on a north Canterbury farm, Louisa McClintock is not your average teenage girl. At just 17 she’s fallen in love with farming. She has quit school and is taking up the reins of her granddad’s farm.

“Everyone thought I was going to stay at school till year 13 and do the whole nine yards and go to uni, but I don’t think there’s anything I’d rather be doing; farming is it,” she says. . . 

Getting through the tough times – Andrew Hoggard:

We at least now know where we are with the much anticipated Fonterra forecast payment.  A price of $3.85 per kilo of milk solids is a real shocker.  There’s not going to be many farmers making anything on that payout.

That said, what can realistically be done about helping farmers through the tough times ahead for at least the next few months?

First, there is the no brainer stuff.  Talk to the bank manager.  Talk to advisers.  Put a bit more effort into communication with the family – they will be feeling the pressure as well.  . . 

Water Proposals jeopardise Southland’s farming future

Federated Farmers Southland strongly opposes Environment Southland’s draft ‘Water and Land Plan and are planning meetings to discuss the rural community’s concerns.

President of Federated Farmers Southland, Allan Baird, says “In its current form, the cost to Southland farmers will be crippling and there will be large flow on affects for the wider Southland economy.”

“As proposed, this Plan would severely limit or prohibit development, flexibility, and innovation for farming businesses, which will have huge consequences for Southland’s economy.”

“Farmers want good water quality just like every other Southlander; by progressing the current outcomes based approach that focuses our resources on the priority hot spots. This is consistent with what the Parliamentary Commissioner for the Environment is encouraging in her recent report, but we can’t do that without the flexibility to adapt to the environment and regulatory changes.”    . . .

NZ and Australia likely to trigger milk quota – Allan Barber:

For the first time since 2004 New Zealand and Australian beef exporters look almost certain to run out of US beef quota before the end of the year. High kills in both countries have seen an excess of beef being processed, well ahead of the normal annual production trend.

New Zealand’s annual quota allows shipments of 213,402 tonnes, much of it manufacturing beef for the fast food industry, but also higher value prime beef cuts in the pre Christmas period. If the quota runs out, these cuts will be at risk. The excess production this year is a direct result of the high cow cull because of the downturn in dairy prices. One processor told me the present slaughter rate was four times the normal amount. . . 

Reducing waste to feed the world:

A 2013 Asia-Pacific Economic Cooperation (APEC) agreement to reduce food waste by 10 percent across the region is picking up pace as researchers and technical team members work towards their 2017 goal of developing effective strategies and actions to address urgent global food waste issues.

A third of the edible parts of food produced for human consumption is lost or wasted. That translates into about 1.3 billion ton per year. Lincoln University Associate Professor James Morton says reducing food waste is the logical first step in meeting the needs of a growing world population, which is predicted to reach nine billion by 2050. He recently attended the second of three APEC ‘Multi-Year Project’ meetings focused on addressing global food waste, where he spoke around the need to measure and reduce wastage in the livestock chain. . . 

TPP – it’s time for a breather – Keith Woodford:

The failure to reach closure at the recent TPP negotiations in Hawaii may be a blessing for New Zealand. It may give some time for our negotiators to reflect on what we hope to achieve and what we are prepared to concede.

Most farmers will be supporters of the TPP. They will be working on the apparently reasonable assumption that more free trade has to be good value. . .

Commission releases draft report on 2014/15 review of Fonterra’s base milk price calculation:

The Commerce Commission today released its draft report on Fonterra’s base milk price calculation for the 2014/15 dairy season. The base milk price is the price Fonterra pays to farmers for raw milk and is currently set by Fonterra at $4.40 per kilogram of milk solids for the 2014/15 season.

The Commission is required to review Fonterra’s calculation of the base milk price each year as part of the Dairy Industry Restructuring Act’s (DIRA) milk price monitoring regime. The review assesses whether Fonterra’s approach delivers incentives for it to operate efficiently and provides for contestability in the market for purchasing farmers’ milk.

The Commission’s overall view is that Fonterra’s calculation of the 2014/15 base milk price is largely consistent with both the efficiency and contestability purposes of the DIRA. . . 

 


Rural round-up

August 15, 2015

Central Plains Water irrigation scheme opens in Canterbury:

Primary Industries Minister Nathan Guy has welcomed the official opening of Stage 1 of the Central Plains Water irrigation scheme in Canterbury today, which has the potential to create more than $1 billion in new economic activity.

The Central Plains Water Enhancement Scheme, when completed, will irrigate 60,000 hectares of dairy, arable, horticulture and stock finishing land between the Rakaia and Waimakariri Rivers.

“This is an exciting day for the Canterbury region, given that farmers and growers have suffered through a severe drought this year. This shows the clear need for this kind of water storage project. . . 

INZ applauds Central Plains Water for providing farmers reliable water for diversification and efficiency:

“Today marks a big step for irrigation infrastructure in New Zealand. Central Plains Water will help sustain Canterbury,” says Nicky Hyslop, Chair of IrrigationNZ on the official opening of New Zealand’s largest irrigation scheme for some years, by the Prime Minister John Key.

Mrs Hyslop attended the opening with IrrigationNZ CEO Andrew Curtis.

“Access to reliable water is particularly important at the moment during a dairy downturn as it will allow farmers to diversify and weather the storm,” says Mrs Hyslop. . . 

Fonterra cuts back GDT whole milk powder by a third over the next year – Fiona Rotherham:

(BusinessDesk) – Fonterra Cooperative Group, the world’s largest dairy exporter, is reducing by a third the amount of whole milk powder, the key commodity export ingredient, it sells on the GlobalDairyTrade platform over the next 12 months due to persistent low prices.

The Auckland-based cooperative’s forecast cut the offer volumes over the next 12 months for its total New Zealand products by a further 56,045 metric tonnes, following a 62,930 metric tonne decrease in the past three months, it said in a statement.

Fonterra managing director global ingredients Kelvin Wickham said the bulk of that is whole milk powder, and milk collected will be shifted from whole milk powder production into other value-add parts of the business that will achieve a higher margin. . . 

Fonterra ratings on review at S&P in face of high debt levels, low global prices – Jonathan Underhill:

(BusinessDesk) – Fonterra Cooperative Group’s credit ratings were put on CreditWatch with negative implications by Standard & Poor’s, which said there was a risk of weakness in the dairy exporter’s financial metrics given its high debt levels at a low point in the global price cycle.

The Auckland-based company has ‘A’ long-term and ‘A-1’ short-term ratings with S&P, which were put on CreditWatch following its announcement of a lower forecast milk price due to weak demand and surplus supply in the global dairy market.

“This ongoing weakness in the global dairy market has occurred when Fonterra’s debt is at very high levels due to a large acquisition and peak capital expenditure, placing downward pressure on Fonterra’s key financial metrics,” said Standard & Poor’s credit analyst Brenda Wardlaw. . . 

Fonterra – Anchor extends portfolio with additional Kids’ Milk range in China:

Our China Brands business recently hit another milestone with the launch of the ultra-premium Anchor Kids’ Golden Milk.

The new milk has 3.6g/100ml protein, a high calcium content and no added sweeteners or additives other than vitamins. 

Business Development Director of China Brands Manoj Namboodiri said the team designed and launched Anchor Kids’ Golden Milk to meet the growing demand from Chinese parents for ultra-premium quality, nutritious and unsweetened kids’ milk.  . . 

Misery peddlers are milking a crisis – Mike Hosking:

Yes, these are tough times for dairy farmers but we should trust those with the industry’s interests at heart.

My plea this morning is that we give our dairy farmers a break, that we cut them some slack and start to get on board with what they already know. Because, let’s be frank, they know dairy a lot better than all the others who, from the comfort of their urban existence, are lining up to tell us the world is ending.

Just to be clear, this will be a tough season. The return of $3.85 is not flash and it’s a mile away from $8.40.

Yes, most farmers won’t make a profit. Yes, some farmers might not make it out the other side, especially those who have gone in late and borrowed big to do so. But what I admire so much about the farming community is they’re realists. . . 

Is organic farming making climate change worse? Demand for ‘sustainable’ food has increased greenhouse gas emissions – Richard Gray:

It has a reputation for being better for us and the environment, but new research suggests organic food may actually be harming the planet.

Scientists have found that rather than reducing the amount of greenhouse gas emissions released, organic farming may actually be increasing them.

They found the shift to large scale organic farming in order to meet growing demand for organic products in shops has led to an increase in emissions for each acre of land. . .

Fit farmers with Farmstrong – Anna Russell:

The Mental Health Foundation of New Zealand and FMG Insurance, along with support from NZX-Agri, launched the initiative Farmstrong. It is an initiative designed to give farmers the skills and resources to live well, farm well, and get the most out of life.

The three areas they focus on are applicable in any work environment, and particularly can help during times of transformation and change:

Time Out – taking regular breaks is an important part of remaining fresh and positive in day-to-day work. So is getting a good night sleep. . . 

Jordy Nelson’s offseason activity? Farming – Anna Katherine Clemmons:

FOR MANY NFL PROS, the offseason means private islands and poolside cabanas. Not for Jordy Nelson. The 30-year-old, who set the Packers’ single-season receiving record last year with 1,519 yards, swaps his cleats for work boots on his family’s 4,000-acre Kansas farm. For five or six weeks each year, he drives a combine and cuts wheat, sometimes for 12 hours a day, or rounds up some of the 1,000-cow herd. “Working cattle is my favorite farm duty,” he says. “It’s interactive, and you’re on your feet all day.” . . .

 


Rural round-up

August 14, 2015

Support extended for drought-affected South Island:

Support for the drought-affected eastern South Island has been extended with an extra $100,000 for Rural Support Trusts and the medium scale event officially extended to February next year, Primary Industries Minister Nathan Guy has announced today.

Mr Guy met with local farmers in the Hurunui district today and says North Canterbury is the worst affected region with little rainfall all year, despite being well into winter.

“North Canterbury, Southern Marlborough and parts of South Canterbury and Otago continue to experience very dry conditions. Pasture growth is well behind normal for this time of year and with lambing and calving starting, the situation remains serious for some,” says Mr Guy. . . 

Low stress the key to success at Whangara – Kate Taylor:

Robbie and Kristin Kirkpatrick’s eyes light up when they talk about the opportunities they have been given at Whangara Angus since 2009.

The business is owned by Patrick Lane but is still officially Lane Bros after Patrick’s father and uncle who bought the first part of the farm in 1929.  Whangara Angus was formed in 1966.

Robbie started working as a shepherd at the station, north of Gisborne, six years ago and is now managing the 1800ha property. . . 

Mushroom battle faces more delays –  Patrick O’Sullivan:

Te Mata Mushroom Company has accused Hawke’s Bay Regional Council of keeping it in the dark.

The council is prosecuting Te Mata for six allegedly smelly discharges between March and April.

The 48-year-old Havelock North company has been the subject of regular complaints from a nearby new housing development about the odour it produces when making compost. . . 

Rebuild of US beef cow herd will hit NZ:

New Zealand’s beef prices could fall as the United States rebuilds up its beef herds.

A new Rabobank report suggests the US is well on its way to rebuilding its herds as it recovers from a drought which has lasted since 2011.

It is expected to reduce the demand and record prices for New Zealand beef in this country’s biggest market.

The report – Beef cow repopulation, the case for diversification – showed the US beef industry expected to grow by 3,000,000 head of cattle in the next three to five years. . . .

New technology for sustainable snapper fishing:

The New Zealand seafood industry makes a serious commitment to the sustainability of our fisheries through significant investments in world-leading technologies, Chief Executive Tim Pankhurst says.

He was commenting on today’s announcement that fishing companies Aotearoa Fisheries, Sanford and Leigh Fish are stepping up their efforts to bring greater transparency into the inshore fleet. The companies are some of the first to commit to fitting vessel monitoring systems (VMS) on all vessels within their fleets that are part of the snapper fishery operating on the east coast of the North Island from the far north to the bottom of the Bay of Plenty. . . 

Hawke’s Bay Viticulturist Encourages Other Farmers and Growers to Enter East Coast Ballance Farm Environment Awards:

Winning a category award in the East Coast Ballance Farm Environment Awards was a nice little pat on the back for viticulturist Steve Wheeler and his employer, Mission Estate Winery.

Steve manages 33ha of vines for Mission Estate, one of New Zealand’s oldest and most well-known wine producers.

Based near Napier and owned by Marist Holdings Ltd, the winery prides itself on “delivering excellent wine to consumers in a way that enables the natural environment, the businesses and the communities involved to thrive”.

“Mission Estate has being doing some great work in the sustainability field,” Steve says, “so entering the Ballance Farm Environment Awards (BFEA) was an excellent way to showcase this work and to encourage others to do the same.” . . 


Very unlike Lotto

July 31, 2015

The NBR’s annual celebration of achievement will no doubt attract derision from the usual suspects who don’t understand wealth creation, what it takes and what it provides for others:

. . .  New riches have been amassed, much of it self-made from creating businesses that employ thousands of people here and overseas. . .

The list attempts to quantify the value of people’s assets. It doesn’t measure the value their success provides for those they employ,  for those who service and supply them and for the economic, environmental and social fabric of the country.

There might be an element of luck in any endeavour but the success this list celebrates owes far more to hard work, skill and the willingness to take risks.

Vicki Jayne, who led the team who put the list together, says:

“But in many ways the actual money is not that important. It’s the stories behind it and the fact that these people have achieved a high level of success. You don’t get the money unless you achieve at a high level in the area you are functioning. It’s very unlike winning Lotto.”

While we celebrate success in sport and the arts, the tall poppy choppers too often deride business success.

That’s a pity, not for the money made but for what it takes to make it and what the people who’ve got it do with it.

This year’s list includes farmers among the newcomers:

When it comes to promoting farming investment in New Zealand, Craigmore Sustainables chief executive Forbes Elworthy could hardly have a better pedigree.

Not only has his family farmed in the South Canterbury foothills for five generations but he can also boast a stellar career trajectory that suggests he knows a thing or two about business. . .

Craigmore Sustainables is now responsible for 40 New Zealand farms which, as the company name suggests, are being run according to a series of community, environmental and business principles that have sustainability at their core. . .

A regular speaker at global investment conferences, he champions New Zealand as a safe haven for farming investment and explains why his company emulates “family farmer behaviours” rather than being “too corporate” in its approach.

Three of Craigmore Sustainable’s farms are in our neighbourhood. They’ve made a big investment in improvements to the properties some of which have enhanced the part of the Alps to Ocean cycle way which goes through their land.

A little further north are the van Leeuwens:

Robots, rubber-floored stalls, cows that live indoors and choose when to be milked – South Canterbury farming couple Adriaan and Wilma van Leeuwen are busy pioneering new frontiers in New Zealand’s dairy industry.

Last year, they opened the world’s biggest ever robotic milking operation under one roof in the small settlement of Makikihi. They even have a plaque from global dairy solutions supplier DeLaval to commemorate the event – and it marks a step change in how farms in this country are managed.

A massive barn houses 1500 cows who decide for themselves when they will head off to one of the 24 robotic stalls for a quiet feed while their udders are automatically prepped and milked. No longer having to deal with inclement weather, the cows are more contented, production goes up and employment costs go down. It’s also easier on the environment – the effluent is collected and reapplied to the farm as fertiliser, thus helping to grow the crops needed to feed the herds and make the whole system self-sufficient. . .

Wilma was a finalist in this year’s Dairy Woman of the Year award.

 

 

 

 


Growing economy supports healthy environment

July 23, 2015

Federated Farmers’ president Dr William Rolleston addressed Local Government New Zealand’s conference on how a growing economy can support a health environment:

Farmers and governments around the world worry about food security and climate change. How could we increase our production while mitigating our environmental footprint? How could we build resilience in a changing climate?

If agriculture is to continue its contribution to New Zealand’s economy we must also address the issues of productivity and environmental impact.  We must continue to enhance our economic benefit by increasing productivity, adding value to our current products and developing new high value products.  We must address the risks which exist in the market, in our social licence to operate, in biosecurity (including pests), and in our climate.

It is not axiomatic that economic progress means environmental deterioration.

Rather economic progress is needed to pay for environmental protection and enhancement.

As a farming leader I have looked for solutions which enable economic progress while supporting a healthy environment.  In this way the incentives line up and the need for punitive resource rentals, taxes and similar instruments is obviated.  Let me give you some examples:

  • Nitrogen, whether in chemical fertiliser, organic fertiliser or fixed by legumes is a significant expense on many farms.  It always shocks me just how little is actually utilised in product which moves off farm and how much is lost to the atmosphere and beyond the root zone. These losses contribute to adverse water quality outcomes as well as greenhouse gases.  Interventions which increase the utilisation of nitrogen will result in better environmental outcomes as well as reduced expense for the farmer.
  • It is a myth that water is free.  Farmers pay big dollars to have water reticulated to their farms through their own or other schemes.  The proposed Ruataniwha Dam is a good example. In Canterbury we have seen significant increases in water efficiency through spray irrigation and now precision irrigation.  Research is continuing to improve drought tolerance and water efficiency in the very plants themselves.
  • Soil erosion is a loss of capital from the farming system.  It is not new and it occupied the minds of my farming grandparents on our property for as long as I could remember.  New techniques such as no till agriculture where paddocks are sprayed with herbicide and direct drilled not only increases productivity but retains soil structure helping to preserve this valuable resource from wind and water erosion that ploughing would leave it vulnerable to.
  • Even without putting biological emissions into the Emissions Trading Scheme farmers have improved their carbon efficiency by 1.2 percent per year, for the past decade, through improved productivity.  Not only that though, New Zealand farmers are amongst the most carbon efficient animal protein producers in the world.  In the absence of mitigation tools and any charges on our competitors, penalising farmers to the extent it would reduce biological emissions would mean a movement of production to less efficient producers offshore and an increase in global biological emissions.

So in many areas economic and environmental goals are already aligned which is good business for councils.  But alignment is not always possible and we can’t pretend that human activity does not have an effect on the environment.  Of course it does. Our response could be to wind agriculture back, to reduce production to mitigate environmental impacts but this also has consequences.

We live in a global world whose population continues to expand.  The FAO predict we will need to increase world food production by 60 percent by 2050 to meet demand.  

New Zealand cannot feed the world, but we must play our part.  It would be irresponsible of us to squander or underutilise our resources.  Even if we are only feeding the rich and privileged – the worried well if you like – wetlands and forests will need to be converted to farmland at the bottom end to compensate for this indulgence.  This is not supporting our environmental credentials.

When it comes to resources our Resource Management Act (RMA) works on a first come first served basis.  This works well at the front end.  Decision makers at that point cannot have the foresight to know what the demand for a resource will be.  However first in first served becomes problematic as a resource reaches its limits when a more strategic approach is needed.  Councils have grappled with this.  Creating property rights through tradable quota however this is not the answer.

There is no doubt scarcity through quota creates value.  However this is a double edged sword.  On the one hand increased value can mean increased attention by the custodian, on the other hand that value can be artificial and limit options for more creative solutions.

In Canada for example, milk is produced under a quota system.  Many Canadian dairy farmers oppose free trade because it will erode their quota value.

Creating ownership in water could have a similar outcome where water storage or increased supply may be resisted by the status quo.

But here decision makers have a problem, which the RMA is yet to solve satisfactorily. How do you allow movement of a resource to the best use in an efficient and equitable way without creating a property right that would flow simply to the entity that can afford to pay the most, or worse still, one which is banked to the detriment of the economy and the environment?  How do you allow for new entrants?

Three potential answers lie in resource expansion, science to increase efficient use, and collaboration.

Water storage is a good example of resource expansion and remains at the top of Federated Farmers’ agenda.  

Water storage builds resilience – the trifecta of economic resilience, community resilience and environmental resilience.  It also creates headroom to dissipate the issue of constraint.  The rationale however is still governed by cost.

The Opuha Dam in South Canterbury remains the leading example of water storage for irrigation.  As well as economic benefit the Opuha Dam has increased river flows, generated electricity, provided Timaru City with water as well as recreation for water craft, fishers and campers.

The courage of a few to build the Dam has, through its living example, made possible the Canterbury Water Management Strategy and in turn the Land and Water Forum. The protagonists knew that economic and environmental gain together was possible.

Solutions for Maori economic aspirations in water could well come through water storage.  By contributing to the development of water storage, government can help create the headroom for negotiation and settlement, if such a settlement is justified.  

And note I used the word “contribute”, not “invest”.  We already have Crown Irrigation Investments to address the hurdle of early capital shortfall and the Irrigation Acceleration Fund and these have been welcomed by Federated Farmers.  But there is a case for government to directly contribute to water storage infrastructure, to create headroom for negotiation as I have just said, but also to reflect the contribution water storage makes to the environment and the community.  Consider that at the time the Opuha water was switched off to farmers, 8 cumecs were still flowing to meet environmental needs – four times the natural inflows.
Farmers are willing to pay for the benefit they receive from water storage.

But as I have mentioned water storage also provides the opportunity to improve habitat, increase environmental flows and provide recreation.  Both local and central government should also consider their financial contribution to reflect the public good.

If we are to truly make economic gain while supporting a healthy environment, decision makers need to ensure they get the science right.  As I mentioned at the beginning of this presentation the systems in which we operate are uncertain by their nature and information is often incomplete.  

The Prime Minister’s Science Advisor, Sir Peter Gluckman, is concerned that decisions made without the proper application of science can entrench policies which are of little value and are not easily reversible, because there may be a popular or political perception that they are effective when in fact they are not.  I share his concern. 

So our challenge is to ensure regulators, politicians and the judiciary make decisions that are in line with the science, and reflect the uncertainty of the time but are not paralysed by it.

The use of caution in the decision making process is essential, but the activist view of the Precautionary Principle, which in essence says do nothing until all risk is eliminated, is an example of the paralysis which we should avoid.
Decision makers need to distinguish between disagreement between parties and scientific uncertainty.  They need to understand what drives the certainty of any one party and put the uncertainty of experts in context. 

We have some evidence that councils and other decision makers are starting to get it right.

In the discourse on fluoridation, immunisation and 1080 we are seeing the public and decision makers starting to back science and reject the worn out and unsupported rhetoric of the anti-campaigners.

Water is more complex but the same principles apply.    

For some council’s the science surrounding genetic modification has not yet penetrated.  Are they playing a political game hoping central government will play the bad cop and get them off the hook?  I don’t know.  What I do know is that that attempts to duplicate control of genetic modification at the local level is based on scientific fantasy as much as anti-fluoridation, anti-immunisation and anti-1080.  What I do know is that significant biosecurity risks lurk in the garden plants of ratepayers but there is no call for strict liability there.

Is there uncertainty?  Of course there is, but conventional breeding is uncertain too. Do we need regulation? Of course we do, but that regulation should be seated in a competent central government authority and based on the risk not the technology.  

 Opportunities to be pest free, to reduce our environmental footprint, to increase productivity and create new products exist with such modern technologies.  These are the things which will prove our environmental credentials, not labels.  If you as councils want to have economic growth supporting a healthy environment then you need to ensure farmers have choice and access to the modern tools of science such as genetic modification and nanotechnology.

A lot has been said about farming to limits and for councils numbers make decision making much easier.  But I would remind you that the RMA was set up to be effects based and that blunt tools lead to dull outcomes.  We need to remind ourselves that farmers have only been talking nitrogen for about a decade.  The science is progressing quickly.  The challenge for regulators is to ensure that regulations are flexible enough to cope with the evolving evidence and to take account of improvements or reductions in water quality. 

It is my experience that farmers are environmentalists; why else would they dedicate their life to the land and spend over $1billion on the environment in five years? They are also problem solvers.  But they need to understand the problem before buying in.

However to make fast progress it requires strong balance sheets and good cash flows.  While it is unacceptable to go backwards regulators, environmentalists and the public need to understand that the rapid progress made in the last few years cannot be sustained when farmers are making a loss.

A growing economy can support a healthy environment but a shrinking one doesn’t stand much of a chance.  

The best way to achieve both a growing economy while supporting a healthy environment requires sound judgements by councils, with the appropriate use of science, engaging not enraging farmers, providing them with the tools of modern technology and seeking solutions which align economic and environmental outcomes. These are all requirements to grow sustainably.

 The downturn in dairy income isn’t an excuse  to ignore any requirements to be environmentally responsible but it will limit the ability to do more than necessary.

Apropos of the link between the economy and environment, Jim Rose says richer is greener:

The Kuznets environmental curve describes an empirical regularity between environmental quality and economic growth. Outdoor water, air and other pollution first worse and then improves as a country first experiences economic growth and development.

While many pollutants exhibit this pattern in the Kuznets environmental curve, peak pollution levels occur at different income levels for different pollutants, countries and time periods. John Tierney explains:

“In dozens of studies, researchers identified Kuznets curves for a variety of environmental problems.

There are exceptions to the trend, especially in countries with inept governments and poor systems of property rights, but in general, richer is eventually greener.

As incomes go up, people often focus first on cleaning up their drinking water, and then later on air pollutants like sulphur dioxide.

As their wealth grows, people consume more energy, but they move to more efficient and cleaner sources — from wood to coal and oil, and then to natural gas and nuclear power, progressively emitting less carbon per unit of energy. . . “

 Poorer people and countries have other priorities than the environment.

As the economy grows and incomes improve priorities change. The environment becomes more important and they can afford to protect and enhance it.


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