Business not Minister’s business

June 14, 2018

NZ First MP Shane Jones has stomped with his clod hoppers where he has no business to be again:

Regional Development Minister Shane Jones has climbed into the leadership of dairy giant Fonterra, calling for chairman John Wilson to follow chief executive Theo Spierings out the door.

Jones said he told the company it should stop being political and instead focus on its business.

Says the Minister who uses personal attacks instead of polite discourse and ought to be focusing on politics not meddling in business.

They should focus less on interfering in politics and more on justifying the money they’ve lost overseas. I believe that they have become disconnected from the farming community.”

Jones said he had suggested to Agriculture Minister Damien O’Connor whether it was time to restructure the dairy co-op, and singled out Wilson for special mention.

Doesn’t he know that the Dairy Industry Restructuring Act (DIRA), under which Fonterra was created, is under review already?

The leadership of Fonterra, I believe, starting with the chairman, is full of its own importance and has become disconnected.”

He said there was an absolute absence of accountability for the “enormous amounts of dough” that the current chairman had presided over.

This sounds very like a minister full of his own importance presiding over a billion dollar slush fund with little accountability.

The CEO has gone, well that’s only one party of the double-Dutch we’ve had to put up with in Fonterra over the last nine years. I thoroughly believe this … that as the CEO leaves Fonterra, the chairman should in quick order catch the next cab out of town.

Double-Dutch? Is this a xenophobic reference to the retiring CEO Theo Spierings and past chair Sir Henry van der Heyden who stepped down nearly a decade ago?

“I’ve been bloody disappointed that Fonterra, in my view, the leadership has not accepted that there’s a new Government and there is a new narrative and I’ve had a gutsful of them believing they are bigger then what they really are.” . .

Believing they’re bigger than they are? That’s rich coming from the party with far more power – and voter money – than its voter support at the election entitle it to.

This sort of tirade does nothing to reassure  businesses which are already very wary of the policies and directions of the government.:

The time has come for the Prime Minister to step in and discipline her Regional Economic Development Minister who repeatedly seeks publicity by attacking business leaders, National’s Regional Economic Development spokesperson Paul Goldsmith said today.

“Business confidence in New Zealand is plummeting and the reasons for that are mounting.

“The Government’s low growth policies like higher taxes and stronger unions are causing businesses to hire fewer people and invest less in growth and it has them concerned about the future of New Zealand and who can blame them?

“Because on top of that you have a loudmouth Regional Economic Development Minister who’s putting his own ego and need for publicity ahead of the interests of New Zealand.

“Shane Jones’ attacks on Fonterra’s leadership are the latest burp from a man who is fast losing any respect he once had.

“He says Fonterra’s leadership is ‘full of their own importance’.  That sounds like a more apt description of himself.

“He even added he’s ‘worried about the absolute absence of accountability for the enormous amounts of dough that the current Fonterrra chairman has presided over’.

“This is startling hypocrisy from the same man who defended his own region getting the lion’s share of funding from his billion-dollar Provincial Growth Fund by stating ‘to the winner goes the booty’.

“Well it’s not his booty and it’s clear Shane Jones has no idea what accountability means.

“This Government has decided to spend $3 billion over the next three years on regional economic development, including roundabouts and church restorations. It’s critical the responsible is up to the job and focused on doing his job well.

“At the moment, all he seems good for is attacking business leaders whenever a few days have gone by without some of the media coverage for which he craves.

A friend who was at the KPMG breakfast at which Jones launched his tirade said it was entirely inappropriate, and a very poor reflection on the MP and the government.

Fonterra is a co-operative. The performance of the company and its chair are the business of its shareholders not an MP.

There is some dissatisfaction and there are concerns but this season’s  milk price is the third highest since the company was formed.

Shareholders could well be more concerned about the MP who has no business interfering in their business than the chair’s performance.

So Jones’s loose lips could well strengthen the position of Wilson who is up for re-election this year.

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Rural round-up

May 13, 2018

Farming programme empowers Maori women in Northland – Bayley Moor:

A programme aimed at upskilling and empowering Māori women in the farming industry has seen its first cohort from Northland graduate.

Graduates from across Tai Tokerau with backgrounds as private farmers, trustees on Māori land and working in the dairy and beef industries were presented with their certificate after completing the Agri-Women’s Development Trust’s Wāhine Māia, Wāhine Whenua programme. 

Wāhine Māia, Wāhine Whenua is an intensive programme providing participants with skills from industry experts including measuring farm performance and potential, business planning, finding and accessing financial information – all condensed down into three, full-day workshops, to make it more accessible for time-poor women.  . .

DIRA distorts Fonterra decisions – Hugh Stringleman:

The review of the Dairy Industry Restructuring Act is well overdue considering the degree of added competition recently, which has implications for the open entry rule, Fonterra says.

“The industry has become highly competitive with a relatively large number of new entrants often backed by deep capital and global businesses,” it said.

“Open entry limits our farmer-shareholders’ and the industry’s ability to maximise value.

“It distorts investment decisions and leaves Fonterra’s farmers underwriting risk for competitors, who cherry-pick their suppliers.” . . 

Farmers want rules for agents – Nigel Stirling:

Mulitple lawsuits being brought by farmers against a South Island livestock firm looks like being the catalyst for regulation of the industry.

Five civil claims against Rural Livestock and a Serious Fraud Office investigation into a former employee of the Christchurch firm have prompted Federated Farmers to call for livestock agents to be licensed in a similar manner to their counterparts in the real estate industry. . . 

Scoring carbon emissions – Brian Easton:

A powerful social law suggests we often explain or do things the wrong way. This may be particularly true when we try to address Global Warming.

Gilling’s Law, one of the most powerful laws in the social sciences, states that the way you score the game shapes the way it is played.* A simple example is that once rugby was boring with a typical score of 9 to 6 – three penalties to two. Later the score for a try was raised from three points to five, bonuses were given for scoring a lot of tries (and also to a loser who gets close to the winner). The changed incentives led teams to take risks to score tries with the result of much bigger scores and a livelier game. . . 

Low cattle pressure, yet an environmental problem in New Zealand – Robert Bodde:

Mark and Pennie Saunders are milking 2,000 dairy cows on the New Zealand South Island. Due to the scale, the cost price is lower than average despite the solid financing. The entrepreneurs see availability of labor and environmental measures as the biggest threats.

Their cows and young cattle older than two months walk 24 hours a day, 365 days a year in the meadow. Mark and Pennie Saunders have therefore invested little in buildings. At the home location in Ashburton, 90 kilometers south of Christchurch, there are three pilots, one of which is out of use. One is for the housing of sober calves, and one contains some tractors and machines. The 4 tractors from 45 to 120 hp are 20 to 45 years old. They are, according to Mark, not worth more than € 165,000, including the tools.

The 80-stall rotary milking parlor, an outdoor fancier from 2004, has also been depreciated. In the first years, 1,200 cows went through twice a day. After an increase in business in 2007, 1,650 per day, 10 months per year. Since 2015, there are only ‘1,450’. That year they bought 130 hectares of the neighbor and they started a new location with 600 dairy cows on a 54-stall rotary milking parlor. “The decision to start at the second location was prompted by the scarcity of capable people”, says Mark. “It is certainly financially more attractive to milk for longer in the 80 stands. But with 1,650 cows, the employees were milking for nine hours a day. Then you will not keep your people. You can only bind them to you if they have varied work. ” . . .

(This was translated from Dutch, as internet translations do, it doesn’t get every word right).

Texas ranches manage cattle to improve pasture and watershed health – Sandra Postal:

The following is an edited excerpt from Replenish: The Virtuous Cycle of Water and Prosperity by Sandra Postel, published by Island Press.

Few animals get as bad a rap these days as cattle do. They are blamed for soil erosion, water depletion, overgrazed rangelands, greenhouse gas emissions, and, when eaten, human heart disease. Often missing from such indictments of the mooing, tail-wagging, and, yes, methane-emitting bovine, however, is our role. How we choose to manage cattle determines their environmental impact, not the animals themselves.

“Ninety percent of people think cattle are bad,” said Robert Potts, president of the Texas-based Dixon Water Foundation. “But grasslands need well-managed grazing to stay healthy. We need to educate people about that.” . . 


Rural round-up

August 15, 2017

Labour’s water plan ‘dangerous, deceitful’, says Marlborough grapegrower – Oliver Lewis:

A Marlborough grapegrower has blasted Labour’s irrigation policy as “dangerous” and “deceitful”.

Wine Marlborough deputy chairman Simon Bishell said it was populist electioneering that would “drive a deeper wedge between the rural and urban divide”.

The Caythorpe Family Estate grower said international wine markets were incredibly competitive and any extra charge would put New Zealand exporters at a disadvantage. . . 

Concern for Hawke’s Bay farmers, growers over “water tax” – Victoria White:

Concerned members of Hawke’s Bay primary sector have waded into the debate on a Labour Party proposal for a royalty on commercial water.

Yesterday Labour leader Jacinda Ardern revealed their freshwater policy, which included charging an unspecified royalty on commercial water, with the revenue going to local regional councils to be used to clean up rivers, lakes and streams.

This royalty would include water bottlers, and farmers taking water for irrigation schemes. . . 

Horticulture New Zealand Responds to Scaremongering Claims:

Reacting to claims yesterday from Labour’s water tax spokesperson David Parker that its level of “scaremongering around this would make Donald Trump blush”, Horticulture New Zealand chief executive Mike Chapman says this is a disappointing way to start a policy discussion about water and land use.

“Since Labour announced last week that it planned to tax fruit and vegetable growers’ use of water, I have been contacted by many of our growers asking that Horticulture New Zealand speak out about this tax and its direct impact on the cost of healthy food,” Chapman says.

“The tax confuses water users with water polluters – they are not one and the same – and implies that people on municipal water supply already pay for water, when in fact nobody pays for water. The costs they are talking about relate to the infrastructure required to source water. . .  

Positive perception important to farmers – Sally Rae:

Dean Rabbidge is an advocate for telling the good stories in farming.

Mr Rabbidge (32), a Glenham sheep, beef and dairy farmer, is intent on not only growing his own farming business, but also defending what he views as a “bad rap” that farming receives from some.

He recently became a trustee and member of the Three Rivers Catchment Group, which was established to engage with all sectors of the community and educate around the management of fresh water.

The group comprised about 12 trustees, who were all farmers and who wanted to engage with the community around water quality issues. The catalyst for its formation was Environment Southland’s proposed Water and Land Plan.

Mr Rabbidge encouraged people to “do the right thing” and showcase best management practice. He wanted to “get some good noise” out there with all the good stuff that was happening, he said. . . 

Understanding meat behind marketing – Sally Rae:

When it comes to marketing meat, Wayne Cameron is in the enviable position of having experienced first-hand all aspects of the chain — from producer to restaurateur.

Mr Cameron has been heavily involved with the Silere alpine origin merino meat brand  established six years ago.

Originally a joint venture between the New Zealand Merino Company and Silver Fern Farms,  SFF later withdrew from the venture and Alliance Group took it up.

Mr Cameron’s latest role is as marketing manager premium products at Alliance Group, overseeing not only Silere but also Te Mana lamb, and other yet-to-be launched products, including a beef label due to be rolled out soon. . . 

NZ sheep numbers decline at a slower annual pace as farmers rebuild flocks –  Tina Morrison:

 (BusinessDesk) – The steady decline in New Zealand’s sheep numbers continued at a slower pace over the past year as farmers in some areas rebuilt their flocks following drought, natural disasters and the impact of facial eczema.

Sheep numbers reduced to an estimated 27.34 million as at June 30 from 27.58 million a year earlier, according to the latest survey from the Economic Service of farmer-owned industry organisation Beef + Lamb New Zealand. The annual 0.9 percent decline compares with last year’s 5.3 percent drop, and marks the fifth consecutive fall since 2012 when sheep numbers rose 0.4 percent. . . 

Farmers taking a hammering with One Plan, gorge closure :

“We won’t survive,” was Tararua District mayor Tracey Collis’ reaction to the Environment Court directed One Plan presented to Horizons Regional Council’s strategy and policy committee yesterday.

“The report is really scary,” Mrs Collis, an Eketahuna dairy farmer, said.

“We’ve seen the damage a loss of 30 per cent of business has meant to Woodville, with the close of State Highway 3 through the Manawatu Gorge. A drop in dairy farmer’s profit will be felt throughout our community,” she said. . . 

Otematata wetland project gets funding boost – Elena McPhee:

Volunteers are fencing, clearing willows, and planting 2200 native plants before spring for a wetlands restoration project at the head of Lake Aviemore. 

Another $15,000 has been granted for the conservation project as part of an ongoing Environment Canterbury initiative to fund biodiversity projects around the district. 

The Otematata Ratepayers Association received the grant from the Upper Waitaki Water Zone Committee to enhance another section of the 50 hectare Otematata Wetlands at the head of Lake Aviemore. 

The wetlands site is a popular recreation area, and is being restored by the community-led group.  . . 

Draft Report on Fonterra’s Base Milk Price Calculation:

The Commerce Commission has today released its draft report on Fonterra’s base milk price calculation for the 2016/17 dairy season.

The base milk price is the price Fonterra pays farmers for raw milk, which is set at $6.15 per kilogram of milk solids for the 2016/17 season just ended. The report does not cover the forecast 2017/18 price of $6.75 that Fonterra announced in July.

The Commission is required to review Fonterra’s calculation at the end of each dairy season under the milk price monitoring regime in the Dairy Industry Restructuring Act (DIRA).

Commission Deputy Chair Sue Begg said with the exception of the asset beta component of the cost of capital estimate, Fonterra’s calculation of the 2016/17 base milk price is consistent with both the efficiency and contestability purposes of DIRA. . . 

Teacher resources bring primary industries into the classroom:

A new set of online resources will provide teachers with the information they need to help their students learn about New Zealand’s animal welfare, biosecurity and food systems, says Associate Minister for Primary Industries Louise Upston.

“The curriculum-linked resources are being rolled out so that teachers can help students to learn key knowledge and skills while also discovering how these key systems underpin the primary industries and play an important role in our economy, our environment and our way of life,” Ms Upston says. . . 

First female president of Agcarm:

Agcarm, the industry association which represents crop protection, animal health and rural supplier businesses, has appointed its first female president.

Dr Pauline Calvert heads the production animal business for MSD Animal Heath in New Zealand and was elected president at Agcarm’s annual meeting on July 27.

Under her presidency, Agcarm will continue to focus on promoting the responsible use of products, sustainable agriculture, environmental preservation, and sensible science-based regulation of crop protection and animal health products. . . 

Interesting Facts And Figures About The 2017 Bayer Young Viticulturist of the Year National Final:

With the Bayer Young Viticulturist of the Year 2017 National Final looming closer (29th August 2017 at Villa Maria) the contestants are well into study mode, researching their projects, writing budgets, revising a wide range of subjects such as pests & diseases, soil nutrition, pruning, trellising and tractor skills to name but a few. Each of them is very determined to be this year’s winner.

Here are some interesting facts about the competition:

• 2017 will be the largest national final to date with SIX contestants . . 


Rural round-up

October 25, 2016

Golden harvest from Fiordland farm – Sally Rae:

Growing saffron and Fiordland might sound an unlikely combination.

But Te Anau couple Steve and Jo Daley have big plans for their fledgling organic operation with an ambitious goal of becoming world-renowned for the costly spice.

“It’s just so damn exciting, the product, and people are so interested in what we’re doing,” Mr Daley said.

Mr and Mrs Daley have 1.5million crocus corms on their property and their intention is to  increase that  to 50million, which would make them the biggest saffron producers in New Zealand.

With a day job as a fencing contractor, Mr Daley, while stationed behind the post driver, got thinking about other ways to make a living.  . . 

Sand and milk: Dairy farming in the desert – Sally Rae:

For Clayton Buckley, the past 12 years working for Almarai — the world’s largest vertically integrated dairy company — have been quite an experience.

Suffice to say, it was ‘‘not like farming here’’, he said during a recent visit home. 

Mr Buckley (35) was brought up in North Canterbury, where his father Russ was a ‘‘part-time’’ deer farmer.

He used to head south during school holidays to stay with his aunt and uncle Gail and Trevor Meikle and help on their farm, near Oamaru.

He enjoyed it so much that when he was about nine, he announced to his parents he was going to buy Mr and Mrs Meikle’s farm, he recalled. . . 

Quad bike deaths at record high – Catherine Hutton:

The number of deaths from quad bike accidents has reached a record annual high of 14, and an agriculture expert says the rate is predicted to rise.

A quad bike accident in Taupō on Saturday night left one person dead and another with moderate injuries, bringing the number of deaths from quad bikes this year to 14, a record for a single year.

The former director of Lincoln University’s Telford campus, Charley Lamb, said the deaths were occurring as a result of crush injuries, which research showed roll bars would prevent.

“Very few bikes have roll over protection, which of course they should do. Whether people want to debate that and argue that, they can. But they used to do the same about safety frames on tractors and they did the same about seatbelts in cars.” . . 

DIRA changes don’t go far enough – Neal Wallace:

Fonterra has criticised proposed changes to the Dairy Industry Restructuring Act as not going far enough because they continue to impose constraints on the co-operative that help its competitors.  

The proposed changes to DIRA announced by Primary Industries Minister Nathan Guy provided a mixed bag for Fonterra which its Farm Source chief operating officer Miles Hurrell labelled a “lost opportunity to address artificial constraints”.  

While an end was in sight for the requirement to sell milk to its largest competitors, Hurrell said Fonterra was still obligated to accept and process all milk produced which meant shareholders having to invest in stainless steel. . . 

Age ousts three directors – Sally Rae:

Three directors, including founder and chairman Graham Cooney, have stepped down from the board of Blue Sky Meats due to an age-related clause in the company’s constitution.

A letter sent to suppliers of the Southland-based meat company this week, signed by chairman Scott O’Donnell and directors Peter Carnahan and Andy Lowe, said Mr Cooney, Peter Houlker and Malcolm McMillan were unable to continue as the constitution precluded any individual from being a director once they reached 65. . . 

Don’t blame staff – Annette Scott:

Agri businesses are bad at attracting the right staff rather than being victims of a shortage of skilled and experienced people, Synlait Milk chief executive John Penno says.  

“Effectively, I’m saying our primary industry business models are not strong enough to compete for the right people.  

“We need leaders growing up in our businesses and we need businesses growing these leaders.”  Penno focused on the challenges of knowledge and skills for land-based industries towards 2030, in a presentation to an Agricultural and Horticultural Science Institute forum.  

“This really made me think,” Penno said. . . 

A changing of the guard for DWN:

Dairy Women’s Network has a new skipper at the helm after today’s AGM, with incumbent chair Justine Kidd stepping down and Cathy Brown of Pahoia being warmly welcomed into the role.

A crowd of about 60 DWN members, staff and sponsors gathered at Wintec in Hamilton today to celebrate another successful year for the 9000-strong not-for-profit organisation that is dedicated to supporting and inspiring women to succeed in the business of dairying.

Brown has been involved with DWN since the late 90s, first hearing about the organisation when she worked at CRV Ambreed. She quickly became a member of what was at that point a largely internet based network and attended the organisation’s first conference in 2001. . . 


Cathy Brown (left) with Justine Kidd.

‘Good dog’ makes dog training easier – Anna Holland:

Two words I find invaluable when training dogs are “good dog”.

The secret to their effectiveness is understanding, timing and correct usage; overuse them and their power is lost.

Not only do you need to understand when and how to use “good dog”, but the dog needs to understand the meaning. I once commented to someone, “You never say ‘good dog’.” And the next thing he was like a stuck record with the words; the trouble is he may as well have been speaking a foreign language because the words had no meaning for his dogs. . . 


DIRA improvements

October 25, 2016

Primary Industries Minister Nathan Guy has announced changes to the  Dairy Industry Restructuring Act 2001 (DIRA):

“When Fonterra was formed as the dominant market player, DIRA was established to ensure an efficient and innovative dairy industry to promote the long-term interests of farmers and consumers,” says Mr Guy.

“A report from the Commerce Commission earlier this year found that competition is not yet sufficient to warrant deregulation at this point. Once sufficient competition is in place, competitive pressure, rather than the DIRA regulatory provisions, should drive the efficiency of New Zealand dairy markets. Competition helps keep businesses efficient, giving individual dairy farmers more options and choice.

“Around 100 submissions were received on the Government’s subsequent proposals to amend DIRA. These were split between those who wanted further deregulation of Fonterra and those who said Fonterra was still in a dominant position.

“Having considered these submissions, the Government has now agreed to a number of changes to the DIRA regulatory regime.”

The changes are:

  • Prevent the efficiency and contestability provisions of the DIRA from expiring in the South Island, and require that the next review of the state of competition in the New Zealand dairy industry commence during the 2020/21 dairy season (20 years since DIRA began).
  • Enable ongoing monitoring of dairy markets.
  • Allow Fonterra discretion to accept applications to become shareholders from new dairy conversions from 2018/19.
  • Alter who is eligible for regulated milk from Fonterra, and the terms that it is available on. Specifically:
  • Fonterra will no longer be required to sell regulated milk to large, export-focused processors from the start of the 2019/20 season.
  • All processors purchasing regulated milk will have reduced flexibility in forecasting the volume of regulated milk they intend to purchase from Fonterra from the start of the 2018/19 season.

“Consultation provided new information about risks of some of the originally proposed changes to regulated milk – particularly for downstream markets and consumers. The Government is therefore deferring the consideration of those potential changes to regulated milk for Goodman Fielder and small or domestically focused processors.

“Officials will start a body of work to understand the complexities in this area and any outcomes will inform the next review.

“The next review will commence by the 2020/21 season – 20 years since DIRA was created. The scope of this review will be wider than just competition policy to take into account any impacts from the work on downstream milk markets,” says Mr Guy.

An Amendment Bill is likely to be considered by the Primary Production Select Committee in early 2017. The Select Committee process will provide further opportunity for public input. Changes to the Raw Milk Regulations will be made via Order in Council. . . 

The wrong question on business formation has been asked if government legislation is the answer.

However, the legislation was passed 15 years ago and the change to allow Fonterra to turn down applications from new suppliers is a welcome one.

The requirement to accept all applications from new suppliers has forced the company to pick up milk from farms in far-flung places. Without that requirement many of these farms would not have converted which would have been better for the company and possibly the environment.

This requirement has also forced the company to over-invest in processing.

No longer requiring Fonterra to supply the larger exporters which are its competitors will be better for it without harming them as they are well able to get alternative supplies.


Rural round-up

August 15, 2016

Unreliable rain reduces sheep numbers – Kate Taylor:

The seasons are changing at Patoka Station and less reliable rainfall is affecting the way it’s farmed. Kate Taylor reports.

It looks green but the grass is much shorter than normal for late winter on Patoka Station in Hawke’s Bay.

That picture is about to change, though owners Ben and Suzie Crosse are unaware of it as they discuss their upcoming lambing, starting from August 31. A storm is approaching the central North Island and will dump 190mm of freezing-cold rain on the 1200ha farm.

The farm has monthly records going back to 1948 but the rainfall hasn’t been reliable lately, Ben says. . . 

Biggest year’ ever for avocado growers

With avocados back on the menu, New Zealand growers are gearing up for their best season ever.

That’s according to John Carroll, director of the country’s largest exporter Avoco, who says his firm expects to ship off about 3.2 million trays of the fruit in the coming months.

In total, 5.1 million trays, about 28,000 tonnes, are predicted to depart our shores, mainly bound for Australia and Asia. . . 

Forest industry’s challenge to manage supply fluctuations:

The pan forest and timber processing industry organisation, the New Zealand Wood Council (Woodco) says there is a supply challenge for many regions in the domestic processing industry.

Woodco Chair, Brian Stanley says timber processors are being hindered by a current lack of logs, especially in the higher grades.

He says small scale woodlot owners are being enticed into quick export contracts instead, where the buyers are not providing the domestic processors with an opportunity to purchase these logs. . . 

Deputy PM Bill English visits Blue River dairy factory – Dave Nicoll:

It was a bit surreal for Deputy Prime Minister Bill English to see award winning cheeses named after places his mother grew up.

English made a special visit to the Blue River Dairy factory in Invercargill on Friday as part of a trip to the Southland region.

Blue River Dairy produced a number of award winning cheeses, and milk powder from sheep milk and has expanded into exporting sheep milk baby formula into China. . . 

Fonterra Announces New Palm Products Sourcing Standard:

Fonterra has adopted a new standard for sourcing of palm products as part of its commitment to sustainability.

The standard was developed in consultation with key supply partners, and it follows discussions with Greenpeace that began in December 2015 to strengthen Fonterra’s existing sustainable palm products sourcing procedures.

“The new standard requires us to purchase only segregated supply palm oil by 2018, and to work with suppliers of palm products to ensure that plans are in place for full traceability to plantation by 2018,” said Fonterra’s Director of Social Responsibility, Carolyn Mortland. . . 

Action to help farming productivity in Manawatu-Whanganui:

Primary Industries Minister Nathan Guy says $465,000 towards primary sector initiatives in the ‘Accelerate 25 Manawatū-Whanganui Economic Action Plan’ launched today will make a real difference to the region.

“Manawatū-Whanganui has the largest sheep flock and beef herds of any region in the country, and half of New Zealand’s lamb exports come from within two hours’ drive of Feilding. We need farming to do well to drive economic prosperity here,” says Mr Guy.

Speaking at Ross and Wendy Humphrey’s farm in Cheltenham, Mr Guy says much of the funding will be used for information sharing to lift productivity.   . . 

Report shows good results from flood recovery money:

A report on Government assistance to farmers following the June 2015 Taranaki-Horizons storm shows that good results were achieved, says Primary Industries Minister Nathan Guy.

“These storms had a major impact on the region and caused widespread damage, so it’s pleasing to see that Government funding has made a real difference,” says Mr Guy.

“The storm on 18-20 June 2015 brought widespread heavy rainfall, flooding and erosion to the Taranaki and Horizons regions. Hill sheep and beef farmers were particularly affected by flooding of river margins and damage to tracks and fences, with damage also to dairy land and young forest plantations.” . . 

Wools of New Zealand well set for end of grower-funding

Wools of New Zealand (WNZ) Chairman Mark Shadbolt says the company is making strong commercial progress with an expected maiden profit for the 2016 financial year.

Shadbolt was responding to a recent shareholder comment in a local rural newspaper that the company would “almost certainly fail” without income from farmers’ Wool Market Development Commitment (WMDC).

“To the contrary, WNZ is making investments that are reducing the company’s reliance on the WMDC.” . .

Commission releases draft report on Fonterra’s 2015/16 base milk price calculation:

The Commerce Commission today released its draft report on Fonterra’s base milk price calculation for the 2015/16 dairy season. The base milk price is the price Fonterra pays to farmers for raw milk and it is currently set by Fonterra at $3.90 per kilogram of milk solids for the 2015/16 season just ended. The report does not cover the forecast 2016/17 price of $4.25 that Fonterra recently announced.

The Commission is required to review Fonterra’s calculation each year at the end of the dairy season under the milk price monitoring regime in the Dairy Industry Restructuring Act (DIRA).

Deputy Chair Sue Begg said Fonterra’s calculation of the 2015/16 base milk price is consistent with both the efficiency and contestability purposes of DIRA. . . 


Feedback sought on DIRA changes

May 30, 2016

Minister for Primary Industries, Nathan Guy, is seeking feedback on options to amend the Dairy Industry Restructuring Act 2001 (DIRA) and its regulations.

The document is in response to the Commerce Commission’s report on the state of competition in the New Zealand dairy industry, which was released on 1 March 2016. By law the Minister is required to respond to this report within 90 days of receiving it. . . 

Among suggested changes are:

• Amending the Dairy Industry Restructuring Act (Raw Milk) Regulations 2012 so that Fonterra no longer needs to sell milk at a regulated price to large, export-focused processors, and the volumes of regulated milk available to all other processors are gradually reduced.

At the moment, Fonterra is required to sell to competitors at a regulated price, even though they are big enough to stand on their own feet.

• Amending the open entry provisions so that Fonterra no longer has to collect milk from new dairy conversions. . . 

This requirement has forced Fonterra to direct investment to more processing when it’s not necessarily the best way to maximise returns for farmers.

It also led to dairy conversions in places where no-one would have contemplated dairying. It has imposed greater costs on Fonterra which has no choice but to collect the milk and some also argue it’s led to farms converted in areas where the environment isn’t suited to dairying.

If legislation is the answer to business success then it’s almost always because the wrong question has been asked.

We can’t turn back the clock. Fonterra was formed and the DIRA passed to ensure it didn’t have an unfair advantage.

However, the clause requiring Fonterra to sell milk at a regulated price to its competitors is no longer needed and requiring it to pick up all milk it’s offered has proven to be a mistake.

 

 


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