Rural round-up

July 6, 2015

Matt Bell wins 2015 ANZ Young Farmer Contest

After a nail-biting finish Matt Bell of Aorangi is the 2015 ANZ Young Farmer Contest Champion.

“This is the most surreal feeling, all the hard work has paid off. The blood, sweat and tears – it was all worth it! It’s somewhat of a dream at the moment” said Mr Bell.

Competition in the 47th ANZ Young Farmer Contest was fierce, with the Evening Show rounds resulting in a tie between East Coast’s Sully Alsop and Aorangi’s Matt Bell. Matt Bell won on a count-back of Practical Day scores. . . .

Young farmers ‘shattered’ after tough contest – Daniel Hutchinson:

The best young farmers in the land flocked to Taupo for a showdown as the town hosted the grand final of the Young Farmer Contest on Saturday.

Animal instincts and rat cunning were on display as the seven contestants battled it out with fencing duels (wire fences), shearing feats and even a speech contest during the three-day competition.

After a nail-biting finish on Saturday night, Matt Bell of Aorangi was declared the 2015 champion. . .

Plans to invest up to $30m goat plant:

A goats’ milk company has announced plans to invest up to $30 million to build processing and packaging facilities in Hawke’s Bay.

Fresco Nutrition’s managing director Greg Wycherley said there was growing demand for infant formula that came from goats and sheep milk, particularly in Asia.

He said Hawke’s Bay was the ideal place to produce and process the product. . .

Speech to Federated Farmers 2015 Annual Conference – Nathan Guy:

Good morning and thank you all for the opportunity to speak to your annual conference here this morning.

I would like to begin by acknowledging your President, Dr William Rolleston; Chief Executive, Graham Smith; members of your National Board; and all other members here today.

My congratulations go to Dr Rolleston who has just been elected as the Vice-President of the World Farmers Organisation.

I met with newly elected WFO President Evelyn Nguleka and Executive Director Marco Marzano in Europe recently.

As an organization “of farmers, for farmers” the main focus of the WFO is to represent the interests of its hugely diverse constituency in international forums where they are often the only voice for farmers. . .

 Low flyer wins top prize at NZ aviation awards:

The business is usually flying close to the ground. But this week, top dressing firm Ravensdown Aerowork was the high flyer when it took out the prestigious ServiceIQ Award for Excellence in Training at the Aviation Industry Association Awards in Queenstown.

ServiceIQ Sector Advisor Gary Scrafton, says the Wanganui-based aviation firm places a strong emphasis on its people, ensuring that they have the skills they need to do both a great job in the air, and to provide customers with top-class service. . .

 

Further boost for New Zealand Cycle Trail:

The Government is investing nearly $400,000 in six new projects to enhance and maintain the quality of the New Zealand Cycle Trail, Prime Minister and Minister of Tourism John Key announced today. 

“This is the second round of funding available through the Maintaining the Quality of Great Rides Fund and brings the total investment under the fund so far to $1.36 million,” says Mr Key.

“Priority has been given to proposals that aim to improve the safety and quality of the Great Rides – the premier rides on the New Zealand Cycle Trail. Three of the successful applications are for repairs to sections of trail that have incurred storm damage. . .

NZ blackcurrants improve mental agility

Researchers say New Zealand blackcurrants can keep people mentally young and agile, and aid in managing the effects of depression and Parkinson’s disease.

A study conducted by scientists at New Zealand’s Plant & Food Research, in collaboration with Britain’s Northumbria University, showed the compounds found in New Zealand blackcurrants increased accuracy, attention and mood.

The research also found juice from a specific New Zealand blackcurrant cultivar, Blackadder, reduced the activity of the enzymes which regulate serotonin and dopamine concentrations in the brain. . .

Seafood industry supports efforts to save Auckland Islands’ sea lions:

The seafood industry actively supports measures to conserve the Auckland Islands sea lion, Seafood New Zealand Chairman George Clement says.

His comments follow the International Union for Conservation of Nature (IUCN) upgrading the sea lions’ status from vulnerable to endangered.

“The decline in the sea lion population at the Auckland Islands has been a cause of concern for some time, although other populations are increasing. . .

Winter Mixed Bloodstock Sale Catalogue Out Now:

The catalogue for New Zealand Bloodstock’s Winter Mixed Bloodstock Sale are due in letterboxes early next week and can be viewed online now.

There are 73 horses catalogued, consisting of broodmares (40), weanlings (6), yearlings (4), two-year-old’s (9), unraced stock (2), racehorses (11) and stallion shares (1).

A range of sires will be on offer at NZB’s Winter Mixed Bloodstock Sale with 53 sires represented, including the progeny of leading sires from New Zealand and Australia, Savabeel and Fastnet Rock. . .

 


Milk mountain must move before price will rise.

July 3, 2015

Yesterday’s GlobalDairyTrade auction resulted in a 5.9% drop in the price index.

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The end of EU milk quotas, embargoes on trade with Russia and lower feed prices in the USA are all contributing to an increase in the supply of milk.

Another cause for the price drop is less demand from China which has stockpiled a mountain of milk powder.

Until that mountain moves we’re not going to see much improvement in prices.

 

 


Trade works

July 1, 2015

Trade Minister Tim Groser’s speech on the future of global trade highlights the benefits of trade:

·         First, consider the evidence for developed countries. Of the 14 main OECD multi-country econometric studies undertaken since 2000, all 14 have concluded that trade plays an independent and positive role in raising incomes.

·         Second, the evidence for developing countries leads to exactly the same conclusion. Case studies reviewing the experience of the 12 most rapidly growing emerging economies over the past 60 years concluded that harnessing the power of the global economy was a central feature common to all and that there was what they called ‘overwhelming’ evidence that trade played an essential role in raising incomes. Sorry guys, the North Koreans got it wrong. The South Koreans got it right.

The final concluding comment of these international experts is dripping with irony. Normally, international officials don’t do irony; it takes extreme frustration to drive experts to use ironic humour. Listen to their words:

“Despite all the debate about whether openness [on trade] contributes to growth, if the issue were truly one warranting nothing but agnosticism, we should expect at least some of the estimates to be negative…The uniformly positive estimates suggest that the relevant terms of the debate by now should be about the size of the positive influence of openness on growth….rather than about whether increased levels of trade relative to GDP have a positive effect on productivity and growth”. . .

I can of course understand vested interests who oppose trade agreements. If, say, your family owns an inefficient sugar processing plant in the wrong part of the United States and which survives only because of sugar subsidies and high protection, I get it. What you need is a long time to adjust to competition, sweetened by a good dose of adjustment assistance. You may even surprise yourself by what you can do to improve your competitive position over a long period of time – I could take you to dozens of examples in this country of industries and companies which vigorously contest our first liberalisation moves in the1980s, staring with the NZ wine industry which used to be deeply protectionist and for understandable reasons. But I am zeroing-in here on the anti-trade, anti-globalisation ideologues who are present around the globe. Even in Germany, a post-war bastion of the open trading system, they have become quite recently a growing element of the political debate on trade. This will complicate the TTIP negotiation.

Here in New Zealand we have anti-trade activists who are relentlessly consistent: they have never supported a single Trade Agreement and they never will. They are politically irrelevant to my political party. However, they get an enormous amount of airplay and are not politically irrelevant to other important elements in our democracy. For reasons I explained earlier, I believe broad bipartisan support for open trade strategies is vital to avoid your country being marginalised.

There is no point in asking them to explain how on earth New Zealand could have survived, let alone prospered, without CER, without the Uruguay Round, the China FTA, the network of FTAs that New Zealand has with ASEAN countries – they opposed even the Singapore/NZ FTA, the first building block of the DNA of TPP. To paraphrase a well-known quote of our Prime Minister, are we meant to earn our living just be selling to ourselves?

There is no point in asking them to explain this, because this is not an evidence-based fight. This is about ideology and the role of markets. On a purely personal note, and going back to my political past in the late 1960s and on which I will not elaborate, I understand exactly how and why these people think like this. I recall wistfully an old political doctrinal statement ‘The final battle will be between the socialists and the ex-socialists’.

If it were just these anti-trade activists, they could be safely ignored by everyone. But their modus operandi is to give currency to concerns about policies that middle New Zealand, which is anything but ideological, cares about – and then to exaggerate those concerns out of the park.

Happily, those concerns of middle New Zealand are widely shared starting with me, my colleagues in Cabinet and Caucus and the Kiwi voters who elected us. And as I survey the likely landing zone for these issues, I am extremely confident that our negotiators, who are world class, have done an excellent job. We shall be able to defend our position.

He counters some of the scaremongering from opponents of the TPP:

So, to put it bluntly, we are not going to sign up to poorly constructed ISDS provisions that ‘transfer control of the country’s sovereignty’ to foreign corporations. We are not going to sign up to agreements that undermine a central pillar of our Public Health system – the pharmaceutical purchasing agency called Pharmac, which is used to keep the cost of medicines very affordable for middle New Zealand. We are not going to sign up to agreements that stop this or future Governments putting well-designed environmental protections in place. We are not going to sign up to provisions on ISPs that make every mother in Lower Hutt worry that the TPP electronic police are going to fly in from Houston to cart their 16 year old son off to jail for file-sharing with his girlfriend.

If and when we get TPP in place, extreme claims that the sky is going to fall in will be made, irrespective of a balanced and sober reading of the final agreed TPP texts. It will be ground hog day for Chicken Licken. I recall, for example, at the end of the Uruguay Round where I was our chief negotiator, absurd claims that the Uruguay Round TRIPs agreement would ‘destroy the Maori economy’, in spite of the fact that the vast bulk of Maori assets, today valued at $40 billion, are in the export sector with much to gain from the Uruguay Round.

That exciting new dairy export company near Taupo called Miraka, the Maori name for milk, that combines significant Maori business assets, locally available renewable geothermal energy and overseas capital invested in it, simply would not exist without the Uruguay Round export subsidy disciplines that allowed our dairy industry to grow against grossly unfair competition, along with the more recent FTAs that created markets and created the interest of Asian investors in investing in New Zealand’s future alongside our own people. . .

He is aiming to get the political deal done by the end of this month:

The deal is ripe for the picking politically, which does not mean it will be easy to reach up and pick nice ripe fruit without damage. I have been deeply involved in the endgame of some pretty significant international negotiations over the last few decades and sometimes it isn’t very pretty. If I told true stories of what I have seen – right up to and including fist fights and negotiators sobbing over the phone, I really don’t think people would believe me.

So please remember this: nothing is ‘too big to fail’. Nor can I be 100% sure that all twelve countries will arrive on the right page at the same time. The one thing I can say with near certainty is that in the course of the endgame, something will come out of left field that we knew about but which no-one had seen before as a deal-breaker.  . .

But I think we will get there – metaphorically, I have called it in some interviews a 7/10 probability. It is not going to be a perfect deal – there never will be a perfect deal because compromises are now required. From a New Zealand point of view, the assessment my team of negotiators, led by Dr David Walker, and I have made and conveyed to other Ministers including the Prime Minister is that there is potentially a landing zone for a good deal that will indeed shape the future of trade and investment integration in the Asia Pacific region and quite decisively.

I would be much more positive in public than this, but for the current lack of clarity on a possible landing zone for our most important export – dairy. It is not that there is nothing on the table on dairy. Nor, let me assure the deep pessimists, do I believe there is any possibility of dairy simply being ‘excluded’ simply because it is too sensitive. That of course would take New Zealand right out of TPP. The issue for us is the quality of the deal on dairy and it is nowhere near there yet.

That will change because it has to change. People have not been putting their real cards on the table until they knew they had to. And until we heard from the US Congress, they were never going to do that. It is going to be an interesting few weeks.

Ladies and gentlemen, if the negotiators representing the 12 countries involved in TPP – almost 40% of global GDP – can pull this together, it will indeed be a big deal. Andrew Robb, my Australian counterpart, calls this ‘the biggest trade deal since the Uruguay Round’. I think he is right. And if we can do it, the TPP bus will not stop finally at the Tokyo station – Japan being among the last TPP entrants. TPP will indeed shape the future integration of the region and possibly strategic thinking elsewhere.

The future for New Zealand is not to shut up shop, to be fearful of foreigners, foreign investment, even targeted migration and suspicious of all Trade Agreements – my word, it must be so depressing to be part of the anti-trade movement. We need to engage with the world. We should back ourselves. We have every reason to be optimistic about our place in the world in the first quarter of the 21st Century. Concluding a high quality TPP Agreement is part of that future.

I am old enough to remember the past when New Zealand businesses were highly subsidised, when the power and money was in the hands of the few who had import licences, when we all paid dearly through higher prices and higher taxes for inferior local goods than higher quality and lower priced alternatives from overseas.

Those who oppose free trade would have us go back to that.

Free trade is fair trade which benefits the buyer and the seller.

As a very small country needing to sell what we produce to people in other countries in order to afford what we can’t produce ourselves, we need free trade and the TPP is an important part of freer trade.

 


Rural round-up

June 30, 2015

Trade agreements are tricky animals – Alan Barber:

There’s a lot of activity going on with trade negotiations at the moment, but not much certainty about outcomes.

Ranging from the TPP, the grandfather of them all from New Zealand’s point of view, to the murky negotiations with the Gulf Cooperation Council, the only deal signed off this year is the long awaited FTA with South Korea.Although this FTA is good news for our primary sector, it is only a comparatively minor achievement which should have already happened years ago. Even the much vaunted FTA with China appears to have been gazumped by Australia’s more recently signed agreement. . .

‘Decades-old frozen meat’ seized in China :

Almost half a billion dollars worth of smuggled frozen meat – some of it rotting and more than 40 years old – has been seized in China, reports say.

More than 100,000 tonnes of chicken wings, beef and pork worth up to three billion yuan were seized in the nationwide crackdown, the state-run China Daily newspaper said.

“It was smelly, and I nearly threw up when I opened the door,” said an official from Hunan province, where 800 tonnes were seized. . .

Flooding likely to increase vegetable prices:

Vegetable growers in the lower North Island may have lost up to 30 percent of their winter crops from the weekend flooding.

The industry body, Horticulture New Zealand, is still trying to build up a clear picture of the damage to market gardens and orchards.

Communications manager Leigh Catley said some vege growers in Horowhenua and Manawatu were reporting heavy losses. . .

Dart Valley track could be closed for moths –  Sally Murphy:

The Dart Valley track in Mount Aspiring National park could be closed for the rest of the year after wild weather caused land-slips, and heavy rain and flooding washed away parts of the track.

Hillsides have slipped and trees have been washed away.

Department of Conservation services manager John Roberts said it was frustrating as it had undone months of work on the track.

“In recent months we have toiled to find a new route through very difficult country, we hoped to build a basic track around what used to be Sandy Flat, linking up with the temporary track around a new lake.” . .

Water rights and democracy:

The president of Federated Farmers William Rolleston is supporting the Government’s plan for partial return to democracy for the Canterbury Regional Council.

The government is about to confirm its preferred option after consulting on a mixed model of six appointed commissioners and seven elected councillors.

It said the work the commissioners had been doing to bring in a water management plan for the region would be put at risk if there was a full return to democracy. . .

MP delighted at fund announcement for food processing research:

The Ministry of Business, Innovation and Employment has awarded funding of $16.65million over the next six years to transform New Zealand’s primary food production into added-value products.

The programme will be hosted by Massey University, with Professor Richard Archer as national science leader, and partner organisations are AgResearch, Plant and Food Research, the Riddet Institute, the University of Auckland and the University of Otago.

National List MP and former member of the FoodHQ board Jono Naylor is delighted by today’s announcement. . .

Lessons from the GFC farmers can use to bank more effectively:

There are good lessons to be drawn on from the global financial crisis (GFC) for dairy farmers in managing volatility and getting the most from their banking relationship, says Hayden Dillon, Head of Corporate Agribusiness and Capital Advisory for Crowe Horwath.

Major rural banks were expected to support their dairy clients despite many farm budgets indicating negative cash flow positions for the coming year, he said. And post-GFC, banks had undergone significant reforms and were now well-positioned in terms of access to capital. . .

 


What goes down . . .

June 17, 2015

The GlobalDairyTrade price index dropped 1.3% in this morning’s auction.

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If what goes up must come down, what goes down can come up, here’s hoping it doesn’t go down further first.


‘Choice’ between sustainability and prosperity false dichotomy

June 12, 2015

The ‘choice’ between sustainability and prosperity is a false dichotomy, Treasury secretary Gabriel Makhlouf said in a speech at the Fieldays.

There is a lot more in the speech, entitled Making Informed Decisions about our Natural Resources, which I am reproducing in full:

Hello, it’s a pleasure to be here with so many people who help our primary sector to thrive.

We live in a remarkable country, one that’s rich in natural beauty and wealthy in natural resources. New Zealand has plentiful, fresh water; clean air; fertile soil and a climate well-suited to growing things. We have long coastlines and significant aquaculture resources; sizeable mineral and petroleum reserves; and extraordinary bio-diversity.

 The World Bank estimates that New Zealand ranks eighth out of 120 countries and second out of the 34 OECD countries in natural capital per capita, which helps explain why three-quarters of our merchandise exports are from the primary sector. While primary sector exports may have dipped over the past year, steady growth is expected in the four years ahead.

Of course a big part of those exports come from the dairy industry, and I know there’s concern about the direction dairy prices have been heading recently. The Treasury’s base forecast in last month’s Budget is for dairy prices to recover towards the long-term levels forecast by the OECD-FAO of around US$3,900 per metric ton towards the end of 2016 as supply and demand become more balanced. But like dairy farmers everywhere in New Zealand the Treasury is closely watching the fortnightly auctions and monitoring developments.

We are fortunate to make our living off the land in a land worth living in. But we cannot be complacent if we want things to stay that way. We’re not pristine, and we can do better. New Zealanders have to make well-informed choices about how we conserve, use and manage our natural resources for the greatest overall benefit to society now and into the future.

Today I want to talk about choice.

I want to challenge some false ‘choices’; expose a few choices that we are denied by the systems we have created; and highlight the fact that more informed public debate can deliver us a system with more choice in it.

For a long time discussions over natural resources have been dominated by false dichotomies.

A key example is the supposed ‘choice’ between sustainability and prosperity. It’s nonsense to believe you have to pick one or the other and can’t achieve both.

A more prosperous economy creates higher incomes and jobs for New Zealanders. Higher incomes are linked to better outcomes across a range of economic, social, and indeed environmental measures that matter for living standards. And the Treasury knows that economic performance is not just about prosperity today; it’s also about prosperity tomorrow and the future prosperity of our children. Sustainable growth depends upon good management of our environment and natural resources, and the productivity with which we use these resources. 

Sustainability and prosperity are interconnected in the Treasury’s wider view of wellbeing and are encapsulated in our Living Standards Framework.

This identifies five ‘dimensions’ which we seek to advance when developing policy: sustainability; equity; social infrastructure; risk management; and of course economic growth. When wellbeing is understood in this broader sense, the assumption that there’s immutable conflict between prosperity and sustainability just doesn’t stack up.

Norway is a good example of a country that has grown wealthy from its natural resources – in its case oil and gas – while playing a pioneering role in environmental protection and sustainable development. As the OECD notes, the Norwegians have simplified their regulatory procedures related to environmental permits and reduced the administrative burdens people face.  Enforcement is risk based and better targeted.

Closer to home, many Māori-led businesses are demonstrating how prosperity and sustainability work together by embracing the concept of kaitiakitanga. They take a very long-term view and manage their assets in a way that meets their aspirations for people, the land, rivers and the sea. Last year a group from the Treasury visited Parininihi ki Waitotara or PKW, a company based in Taranaki who run a number of businesses in the primary sector. PKW are combining successful dairy farming with sustainable practices: protecting waterways, carefully managing nutrients, and even using solar energy to power their cowsheds.   

The falseness of the ‘choice’ between prosperity and sustainability is being shown up not just by countries and companies, but by consumers too.

The premium on ethical, sustainably produced, healthy goods continues to rise. Interest in working practices and supply chains means that companies have to be able to clearly demonstrate their sustainability credentials.

It’s also clear that productivity and sustainability are converging in ways not seen before.

For example, in recent years we have seen irrigation infrastructure, originally installed to boost farming productivity, helping to alleviate further pressure on struggling river and stream ecosystems. 

Central Plains Water scheme in central Canterbury is currently under construction, and will from September this year relieve climatic and allocation pressures on groundwater and lowland streams around environmentally and culturally important Lake Ellesmere Te Waihora.

The Opuha dam was able to keep streams flowing in South Canterbury during this year’s drought, which would otherwise have stranded fish.

The small Eiffelton scheme in mid-Canterbury pumps groundwater into ecologically important streams that would also have stopped flowing last summer without it. This leads me to the second false ‘choice’ I want to shed light on – between high technology and our primary industries.

Through companies specialising in precision agriculture, such as Varigate, Agroptics and others, New Zealand’s world-leading tech is both increasing productivity and serving environmental outcomes.

By mapping soil characteristics, tailoring the use of irrigation, fertiliser and other inputs to match, and ensuring accurate spatial delivery, the use of inputs can be reduced. This results in savings of energy, time and inputs, while pasture and crop yields increase and less nutrients are lost to the environment, leading to better water quality in our rivers and groundwater.

Progress in GIS technology and nutrient management data is enabling farmers to understand their farms in new ways. This is delivering environmental improvements and driving the best increases in productivity in the whole economy.

Another false ‘choice’ is between protection and use of natural resources.

As a country, we protect around a third of our land area for conservation, but the mountains and forests making up most of this area are used as a playground by our people.  They’re also a workplace for some of the 166,000 people employed in tourism industry; an industry that relies on us continuing to protect our outstanding natural beauty.

Instead of accepting these false ‘choices’ we have an opportunity to focus on ensuring our system gives us the freedom to make the choices we actually want.

One example is in the space of bio-technology.

I am not going to get into the question of genetic modification specifically.

What I will say is that when new technologies come along – both GM and non-GM – our current system denies us the choice over whether we want them. Meanwhile, our international competitors do have this option.

There is, for example, a new variety of high-yielding eucalyptus tree which has just been approved for cultivation in Brazil.  Using this variety, growers can get a 15 percent increase in wood for the same area, processors can get a 20 percent reduction in the cost of wood production, and the environment benefits from a 12 percent increase in the amount of carbon dioxide stored per hectare.
High-yielding wood is at the core of our pulp and paper industry.

However our current regime for regulating new organisms is highly restrictive in practice, which means we do not have the flexibility to choose whether this is something we would want in New Zealand.

I’ve heard it said that our current regulatory regime would deny us the choice to adopt many new plants and species that today offer us huge advantages: kiwifruit, rye grass, and even the ubiquitous pinus radiata.

Another example of a choice we are currently denied is found in our approach to risk.

This is particularly important when we consider the potential to sustainably use the resources contained in our precious marine environments.

I am not going to stand here and tell you that New Zealand does not take enough risk. That is for the country, through elected representatives, to decide.

The point I want to make is that we often deny ourselves the choice over how much risk we want to take. When systems adopt rigid approaches to risk, for example, rather than genuinely enabling adaptive management approaches, we limit our ability to explore and assess the potential risks of our actions.

Another restriction on our choice comes when we have inefficient systems. In these instances we deny ourselves the chance to decide, clearly and efficiently, how we want to manage our resources.

From an economist’s point of view, a resource management system like ours is intended to reduce the costs of allocating resources, account for factors which market forces don’t value, and manage collective action problems – including intergenerational fairness.

Our current system could be better on all of these fronts.

As we saw with the establishment of the Kaikoura marine protected areas, the transaction costs of making decisions on how to manage our resources can be extremely high.

Many of our resource management systems come in for regular criticism, although it’s often directed at how the decisions are made rather than the decisions themselves.

And our limited framework for valuing natural capital and ecosystem services often prevents us from understanding how much they are really worth to us. It also means weighing public benefits against the gains to be made from resource use is hard for decision makers.

But it’s not all doom and gloom.

We are starting to reclaim some of these choices.

A number of Government departments are working together to assess the feasibility and benefits of more systemically gathering natural capital information to feed into decision-making.  Appropriately considering the impacts on natural capital, such as clean water, soil or habitat for threatened species, will allow us to make better, more balanced decisions.

The Government’s resource management reforms aim to provide greater certainty for communities to plan for, and meet, their area’s needs in a way that reduces costs and delays, while maintaining the environmental standards that are important to them. 

Freshwater policy is another area where we are reclaiming choice.

Here, communities are able to debate the value of public goods; public discussion is exposing and trading-off risks; and collaboration through the Land and Water Forum continues to help create a management system which is responsive to the goals of users.

But there is a price for moves to systems such as this, which give us the choices we really want.

The quality of information and the level of public debate must be raised. This is something for which all parties must share responsibility.

Government doubtless has a role here. The work to develop a Māori Land service is one example.

Here the Crown is providing the information and support that Māori landowners need to assess the different choices available to them from their land. This in turn exposes the true value to Māori of systems which allow us to choose how our resources are managed. 

However, businesses and industry sectors must play also play a part in setting the conditions for a more informed debate.

On the issue of climate change, for example, the agriculture sector has the opportunity to contribute to the public debate about New Zealand’s future emissions targets, and options for meeting these targets. 

It is important that we focus on what the science tells us.  

As the IPCC told us last year, carbon dioxide emissions fundamentally drive long-term global warming.  Methane has a larger impact initially, but its effect is only short lived. This clearly has little impact on most other developed countries whose emissions consist mainly of carbon dioxide, but it makes a huge difference for New Zealand because of our high agricultural emissions.

New Zealand has invested heavily in finding ways to mitigate the effects of biological emissions, though commercialisation is still some way away.

So science clearly plays an important role in helping us work out how we can have the greatest impact in reducing emissions.  And it has an important part to play in informing the public, in helping us avoid false dichotomies and giving us greater choices to enable living standards to continue to rise for generations to come.  And as part of this, the business community has the opportunity to explain how its actions contribute to increases in all areas of wellbeing.

I, for one, look forward to working together to make these challenging, but ultimately vital, choices about the future of our natural resources, the prosperity of our country and the living standards of New Zealanders.

Sustainability and prosperity aren’t mutually exclusive.

Furthermore,unless we want to return to subsistence living, which may or may not be environmentally sustainable but certainly isn’t socially and economically sustainable, prosperity is essential for sustainability.

That doesn’t mean that prosperity should be at the cost of the environment or people.

The challenge is to balance economic, environmental and social considerations.

 


Fonterra model not best for milk or meat

June 8, 2015

Does Fonterra need to change?

Waikato University’s Professor of Agribusines Jacqueline Rowarth told Nine to Noon Fonterra was trying to do everything – supplying as well as branding and marketing – and there should be a major rethink of the structure.

“It’s too difficult to be milk supply, processing, branding and then the marketing of the brands at once, as well as expanding overseas.”

Past president of Federated Farmers’ Southland Russell MacPherson told the programme the business needed to be better run and simplified. . .

Fonterra is often cited as a good model by people wanting reform of the meat industry.

I don’t think it’s the best model for milk or meat. That the milk industry is following the meat model with more new processing companies being set up shows the single dominant company isn’t what all suppliers want.

There is competition for raw milk and the growth of new companies shows farmers want it.

Would there be so much criticism of Fonterra if the milk price was higher? Possibly but they wouldn’t be as strong.

Fonterra’s dividend was lower last year because the milk price was higher. The milk price is well down this year but losses on stock processed from last year’s high priced milk that was sold on this year’s market has eroded the dividend this season.

That is difficult to argue with that reasoning.

But the measure of a business is how it performs in tough times and it is fair to ask why Fonterra isn’t doing better.


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