Rural round-up

22/02/2021

EU carbon tax: threat or opportunity? – Nigel Stirling:

New Zealand farmers have been quick to claim world champion status for carbon efficiency. So why are they so nervous about a planned European tax on the carbon emissions of imports? Nigel Stirling reports.

It has been described by the European Union’s top bureaucrat as the continent’s “man on the moon moment”.

An ambitious plan to decarbonise the European economy known as the “Green Deal”.

“The goal is to reconcile our economy with our planet,” European Commission president Ursula van der Leyen boldly declared when first revealing the plan in December 2019. . . 

M. Boris review gets underway – Annette Scott:

An independent review of the Mycoplasma bovis eradication programme is aimed at identifying lessons that can be learned from New Zealand’s largest biosecurity response.

Driven by the programme partners, the Ministry for Primary Industries (MPI), DairyNZ, and Beef + Lamb NZ (B+LNZ), the review is deemed best practice given the scale of the eradication programme.

It will also fulfil a commitment made to farmers at the start of the programme, DairyNZ chair Jim van der Poel says.

“Eradicating Mycoplasma bovis is hard work, but with the whole sector working together we have made really good progress,” Van der Poel said. . . .

A winning formula for good cows :

A Waikato dairy farming couple have proven they’re at the top their game, taking out two prestigious titles at New Zealand’s largest cattle showing event.

Tom and Francesca Bennett, Te Hau Holsteins, had both the best Holstein Friesian cow at New Zealand Dairy Event and Tom also took out the World Wide Sires, All Breeds Junior Judging Competition. The family was also named Premier Holstein Friesian Exhibitor.

“It was awesome, I did the Pitcairns Trophy judging competition at the Waikato Show and came second, but Dairy Event was my first really big judging competition to win,” says Tom. . . .

Dairy conversion Otaki style – Peter Burke:

From the outside it still looks like a dairy shed except it is painted white with black cow-like symbols. From the outside it still looks like a dairy shed except it is painted white with black cow-like symbols. Near the Horowhenua town of Otaki, dairy conversion has taken on a whole new meaning. It’s not a case of converting sheep and beef farms to dairy farms, rather it’s a case of just converting old dairy sheds to country style tourist accommodation. Reporter Peter Burke visited two such conversions by two pretty special and creative women.

The two conversions are complementary – one offers an experience on a commercial dairy farm while the other has a focus on horses.

Stacy Faith and her husband Andrew milk 360 cows once a day to supply Fonterra. They separately milk 20 more to supply A2 milk for the vending machine they have installed at their farm gate. It’s a farm that has long been in the Faith family. . . 

From working at the dairy farm to owning it – Ruby Heyward:

Raspberry Cottage owner Sarala Tamang is farming with a twist, but not without some help.

Originally from Nepal, Mrs Tamang moved to Waimate in 2010. She bought the Raspberry Cottage business and the attached farm from couple Barry and Margaret Little in 2019.

For the six years prior, Mrs Tamang had worked for Mr and Mrs Little, caring for the berries as though they were hers – and now they are.

Using her experience, and with the help of the previous owners’ continued guidance, Mrs Tamang wanted to grow what the supermarket did not offer. . . 

 

Mental health: young farmer recalls decision to quit farming >

A 23-year-old who had dreamed of being a farmer since he was a child had to quit the industry after his mental health started to slip.

Dan Goodwin from Suffolk has shared his story during the annual Mind Your Head, a week-long campaign raising awareness of farmers’ mental health issues and the support available to them.

When Dan turned 18, he moved from Bury St Edmunds and attended a land-based college in Norfolk.

Throughout his studies, he enjoyed learning and the structure that his apprenticeship with a small family-run farm gave him. . .

 


Rural round-up

01/01/2017

New Govt passing up prime opportunity for rural development:

The evidence this new Government will be no friend to farmers continues to stack up, National’s Primary Industry spokesperson Nathan Guy says.

“During Question Time yesterday, I asked Regional Development Minister Shane Jones whether his $1 billion fund will support regional water storage and irrigation projects that can grow jobs and exports, and enhance the environment.

“Alarmingly, all he could say was that the final criteria for this fund is yet to be determined. . . 

Expanding global production set to increase competition in animal proteins sector in 2018:

Animal protein production is expected to expand around the world in 2018 increasing both trade competition and competition between different meat types, according to a new industry report from agricultural banking specialist Rabobank.

Rabobank’s Global Outlook for animal protein in 2018 says production increases are likely in most regions with Brazil, China and the US expected to record particularly strong production growth. In New Zealand, beef and sheepmeat production is forecast to remain similar to 2017 levels.

The report says beef and pork will be the strongest contributors to global animal protein expansion – with global beef production projected to increase for a third consecutive year in 2018, and a further year of significant growth in pork production anticipated. . . 

CPTPP to the rescue – Allan Barber:

This is truly the age of acronyms – TPP morphed into TPP11 which has now added a couple of initials while actually shrinking in scope from its original intent. But unlikely as it has seemed at several points along its tortuous journey, the mother of all trade deals, or maybe now the stepmother, is still alive in spite of Trump’s and Trudeau’s unsubtle efforts to hijack it.

My major concern before the APEC meeting in Vietnam was the strong possibility the new government would withdraw from TPP11 as it sought to renegotiate the Investor State Dispute Settlement and foreign investment clauses, when all the other signatories were willing to accept them. I freely admit I was wrong to underestimate Labour’s commitment to free trade, while overestimating the influence of New Zealand First. In the lead up to the election all the signs pointed the opposite way, while the concession extracted by Winston Peters to pursue a trade agreement with Russia provided further evidence TPP and its successors may no longer be at the front of the queue. . . 

Beef + Lamb studies threat posed by alternative proteins, considers how to respond – Rebecca Howard:

(BusinessDesk) – Beef + Lamb New Zealand is carrying out consumer research into alternative proteins in China and San Francisco in response to the rise of the rival products and wants to report back to the sector before the end of the year.

“What we have discovered is that for better or worse alternative protein is here. We are not seeing it as a replacement for now, but we are definitely seeing it as an alternative for certain types of consumers. The consumer research that we doing is to understand who those consumers are and what’s driving that behaviour,” Damien Cullinan, market innovation manager for Beef + Lamb, told BusinessDesk. . . 

New app to bring in water allowance sharing – Tracy Neal:

Farmers and growers in Marlborough will soon have use of an online tool that tells them how much water they can use on a given day.

The council is grappling with an increasing strain on water supplies, with projections for demand and the effects of climate change showing it is likely to get worse.

A new cloud-based digital system, from which users will be able to download information to a portable device, was presented to councillors at a meeting in Blenheim yesterday.

Gerald Hope of the council’s environment committee said the tool would allow real-time information that would lead to better use of water. . . 

New Zealand farmers and growers welcome EU glyphosate decision:

New Zealand farmers and growers welcome an EU majority decision backing a five-year extension to glyphosate’s licence, which was due to expire next month.

Glyphosate, a herbicide widely-used in agriculture and by gardeners, is “an efficient and cost-effective means to keeping our agricultural economy growing, our environment protected, and our country weed-free,” says Agcarm chief executive Mark Ross.

“The decision is good news for farmers as they won’t be forced to find an alternative solution for use on exports,” adds Ross. . . 

$21 million Government & dairy research collaboration to improve waterways:

The dairy sector welcomes the Government’s announcement today that it will invest alongside farmers in a seven-year $21 million research partnership that will boost the current effort to clean up rural waterways.

Minister of Business, Innovation and Employment, Dr Megan Woods, confirmed today MBIE will provide $8.4 million towards the project which aims to tackle the difficult nitrogen leaching question, nitrogen being one of the nutrients impacting water quality.

A further $11.5 million will be invested by dairy farmers through the levy they pay to DairyNZ, with additional funding support to make up the $21 million coming from CRV Ambreed and Fonterra. . . 

How NZ ag can stop getting beaten up –  St John Craner :

NZ Ag is always on the back foot. Despite the rhetoric from leaders in industry about how we need to tell our story better, we continue to be out-gunned by lobby groups like SAFE, PETA and Greenpeace. Whether it’s bobby calves, PKE, dirty dairying or most recently false free-range eggs, we’re always playing a defensive position that risks our social licence to operate.

NZ Ag could learn from those brands that have had the foresight and planning to build a strong equity. SouthWest airlines is a great example. When 9/11 occurred they were inundated with customers sending them cheques because they were worried about their viability. This was because their customer base had a fond affection for them and what they stood for: everyone has a democratic right to fly. When the botulism scare kicked in for Fonterra they found they had few friends. GSK’s Ribena got caught out after its false claims of Vitamin C was unearthed by two 14 year old school girls from Auckland. I doubt they’ve ever restored consumers’ trust. . .

NZ structural log prices rise to 24-year high, A-grade export logs hit record – Tina Morrison:

(BusinessDesk) – New Zealand structural log prices rose to the highest level in 24 years and A-grade export logs hit a record as local mills compete with the export market to secure supply for the domestic construction market amid strong demand from China.

The price for structural S1 logs increased to $130 a tonne this month, from $128 a tonne last month, marking the highest level since 1993, according to AgriHQ’s monthly survey of exporters, forest owners and saw millers. Export log prices lifted between $2-to-$5 a tonne for the majority of grades, with the price for A-Grade logs touching $128 a tonne, up from $127 a tonne last month and the highest level since AgriHQ began collecting the data in 2008.. . .

Jason Minkhorst to join Ballance Agri-Nutrients:

Senior Fonterra executive, Jason Minkhorst, has been confirmed as General Manager Sales for Ballance Agri-Nutrients, joining the farmer-owned Co-operative in early March 2018.

Jason is currently Director Farm Source Stores of Fonterra’s rural retail business, Farm Source, and has extensive commercial experience from more than 15 years in senior executive and governance roles in the dairy sector.

Ballance CEO, Mark Wynne, says Jason’s deep knowledge of agri-business and genuine passion for the primary sector will be hugely valuable as Ballance focuses on the changing needs of New Zealand farmers and growers – providing tailored nutrients and advisory services, backed by the best science and technology. . . 


Rural round-up

22/07/2016

Agriculture could be included in Emissions Trading Scheme – Kate Gudsell:

The Treasury has raised the possibility of agriculture being included in the Emissions Trading Scheme (ETS) after years of being exempt from charges.

The move is suggested in a March Treasury briefing to Finance Minister Bill English and his two associates Steven Joyce and Paula Bennett.

The briefing outlines the financial risk the government faces from scrapping the one-for-two scheme – a 50 percent subsidy for polluters which meant they paid half the value of their greenhouse gas (GHG) emissions. . . 

Local government needs you:

With nominations for this year’s local authority elections opening on Friday, Federated Farmers is calling on farmers and other business-minded people to consider standing for election.

Federated Farmers’ Local Government spokesperson Katie Milne said it’s  vitally important that we get good candidates to put themselves forward.

“Being a councillor is a challenging role but farmers can make a real difference on councils as they can inform and educate their colleagues and staff about what happens on-farm. . .

Battle for our Birds 2016 operations begin:

The largest pest control operation in New Zealand’s history has been launched today by Conservation Minister Maggie Barry.

Battle for our Birds 2016 will protect our nation’s most vulnerable native species from the potentially catastrophic explosion of rats and stoats in New Zealand forests as a result of a beech mast event.

At an event at Bob’s Cove near Queenstown today Ms Barry announced aerial 1080 drops have been confirmed for 19 sites covering more than 720,000 hectares of high value land. . . 

Meat exporters facing foreign exchange headwinds:

Meat Industry Association Chief Executive Tim Ritchie says uncertainty in the EU as a result of Brexit is one of the causes of a higher exchange rate, which will significantly affect prices our exporters receive in the European market. This, in turn, affects the prices meat processors can pay farmers for their livestock. Volatility in exchange rates has already had a significant impact on meat exporters, which led to eroded margins in the last season.

This year, the volatility looks like it will get worse. A year ago, a NZD was worth 0.43 GBP, but is currently 0.53 GBP, with the NZD rising sharply against the GBP since the Brexit referendum.  . . 

Rabobank Global Wine Quarterly Q3: Opportunities for wine supply and trade in South-East Asia:

Markets in South-East Asia are calling out to be explored, as opportunities in the region lie beyond China and Japan. Meanwhile, the short South American harvests and the Brexit are leading developments in global wine supply and trade, according to the Rabobank Global Wine Quarterly Q3 2016.

‘Other’ Asia

Headwinds for wine consumption in South-East Asia still dominate the outlook in the near term, however opportunities are nevertheless apparent, and some positive longer term fundamental drivers are present should the necessary catalysts set them in motion.. . .

LIC full year result 2015-2016:

Farmer-owned co-operative, Livestock Improvement Corporation (NZX: LIC), has announced its result for the year ending 31 May 2016.

The financial result is summarised below with background information attached to NZX, including Chairman Murray King’s letter to LIC shareholders.

Revenue: LIC revenue from ordinary activities was $205 million and including other income from grants, totals $211 million, 9% down on the total $232 million achieved during 2014-2015. Lower milk prices have impacted on-farm buying decisions, as many farmers look to reduce costs and indeed go into survival mode through the difficult financial times facing dairy farmers. . .

How the EU Budget is spent – Common Agricultural Policy – Gianluca Sgueo, Francesco Tropea and Marie-Laure Augere-Granier:

With 52% of the European Union (EU) territory classified as predominantly rural, more than 170 million hectares of agricultural land, and 113 million people (nearly one quarter of the EU population) living in rural areas, the Common Agricultural Policy (CAP) represents one of the largest shares of expenditure from the EU budget. The CAP pools European Union resources spent on agriculture to protect the viable production of food, the sustainable management of natural resources, and to support rural vitality.

The CAP consists of two ‘pillars’, the first includes direct payments (i.e. annual payments to farmers to help stabilise farm revenues in the face of volatile market prices and weather conditions) and market measures (to tackle specific market situations and to support trade promotion). The second pillar concerns rural development policy and it is aimed at achieving balanced territorial development and sustaining a farming sector that is environmentally sound, as well as promoting competitiveness and innovation. . .  (Hat Tip – Utopia)

Wool Market Steady:

New Zealand Wool Services International Limited’s CEO, Mr John Dawson reports that the North Island Wool Auction received revived support this week with an improved 81 percent of the 5700 bales selling.

The weakening NZ dollar across the board saw the weighted currency indicator fall 4.22 percent. Despite these positive factors, local prices were still below last week’s South Island auction, but only marginally under the last more comparative North Island selection. . .


Rural round-up

07/07/2016

Need for young blood – Peter Burke:

The aging population in agriculture is working against New Zealand, says Lincoln University’s Jon Hickford.

Speaking to Rural News at the Careers in Agriculture hub at Fieldays, Hickford says this is a huge problem, compounded by NZ’s rapid urbanisation and disconnection from the agri sector.

The problem now is to find enough good young people to work in agriculture.

“The problem across the western world is that young people are entirely urbanised and don’t realise the job opportunities out there on the land. In the case of NZ, agri defines our existence as a country. . . 

Cheap food has high price:

A Lincoln University expert is warning of the cost of focusing on producing food cheaply.  

A report into European farming policy ‘Does the CAP still fit’, co-authored by Lincoln University Professor of Farm Management Alison Bailey, says there is overwhelming evidence at local, national and global levels that food systems need to change.  

The paper was for the Food Research Collaboration on the European Union’s Common Agricultural Policy (CAP) which provides support to Europe’s farmers. . . 

Feds support stance on GMOs by 107 world-leading scientists:

As more than 100 world-leading and award-winning scientists voice their support of genetically modified organisms (GMOs), Federated Farmers continues to endorse farmers’ rights to decide what technologies are used on their farms.

Federated Farmers’ spokesperson Katie Milne said it’s clear that the long-term stance opponents have against all GMO is well and truly outdated and lacks scientific scrutiny.

“Federated Farmers recognises GMOs can provide many positive benefits to farmers and it’s up to individual farmers to decide whether to use GMOs or not. We have a neutral stance on this.

“Through GMOs farmers could have cows without horns or have the ability to not breed calves, there are many positive animal welfare outcomes for the industry,” said Ms Milne. . . 

Feds unveil guide to local government excellence:

See full Federated Farmers Local Government Manifesto here.

A best-practice, practical and common-sense approach to governance has been unveiled by Federated Farmers at its national conference in Wellington today.

Federated Farmers’ Local Government spokesperson Katie Milne said this tri-annual guide promotes the latest thinking on how councils should be engaging with and providing services to farmers and other ratepayers.

“Farmers are some of the largest funders of local government and the sector most likely to be impacted by regulation developed and implemented by councils. “Farmers need level-headed councillors who prioritise real needs over the ‘nice to haves’. They also need to respect the considerable contributions from ratepayers,” said Ms Milne. . . 

Livestock and sustainability – challenges and opportunities for New Zealand:

Livestock may provide one-third of the value of global agricultural production, but it comes at a big cost for the planet. Livestock uses 80 per cent of the world’s agricultural land, putting pressure on water resources and biodiversity and emitting 14.5 per cent of the planet’s greenhouse gases.

The benefits, risk, trade-offs and consequences are complex and policy makers are always looking for guidance. Now, new guidelines have been developed by the Committee on World Food Security’s High Level Panel of Experts (HLPE). The Committee’s report Sustainable agricultural development for food security and nutrition: what roles for livestock? was launched last week at the Food and Agriculture Organization of the United Nations in Rome. . . 

UK referendum opens can of worms and some opportunities  – Allan Barber:

The referendum on EU membership produced a result nobody really expected and nearly half the voters didn’t want, but now everyone has to plan for an uncertain future. There have even been suggestions the exit might not happen, unless the Westminster Parliament passes the required motion to activate the start of the exit process. It’s not worth thinking about the implications for British democracy, if that were to happen.

In the immediate aftermath of the 23 June referendum there are only two certainties in a sea of uncertainty – the pound is worth a lot less than it was which will affect export receipts, but red meat access to the EU including the UK will not change for two years from the time the UK invokes Article 50 of the Lisbon Treaty which sets the exit process officially in motion. . . 

Agriculture set for slow-down – OECD:

The latest 10-year outlook from the OECD warns the recent period of high agricultural commodity prices is most likely over.

The report, produced with the Food and Agriculture Organisation, said overall market growth was projected to slow and agricultural trade was expected to grow at less than half the rate of the previous decade.

The report – ‘OECD-FAO Agricultural Outlook 2016-2025’ – said global agricultural trade was expected to grow by 1.8 percent per annum in volume during the next 10 years. . . 

Do possums howl at the moon?

Knowing if nocturnal pest mammals are more affected by the phases of the moon or by illumination could bring New Zealand one step closer to being pest free and save control agencies significant sums of money.

Lincoln UniversityEcology Master’s student Shannon Gilmore’s research into the effect lunar phases and illumination have on activity levels in possums, stoats, rats and mice is aimed at finding more effective and efficient means of targeting and managing these pests.

“It costs millions every year to control their populations,” says Shannon. “We’re waging a kind of war on pests. We need to discover their weaknesses. What trait do all four have in common that we can take advantage of? They are all nocturnal, and many nocturnal animals dramatically reduce their activity with the full moon, while others can become more active. . .

 


Rural round-up

09/11/2015

Alliance in good shape, Donald says – Sally Rae:

He’s been sitting around the board table at Alliance Group for 24 years but Murray Donald has finally called time.

Come December 17 and the Southland farmer will be gone, as he is standing down as a supplier representative at the company’s annual meeting in Oamaru.

Mr Donald (54), who farms near Winton, and fellow long serving director Doug Brown, of Maheno, who was elected in 2001, have decided not to seek re election. . . 

Exit from EU could cripple UK agriculture – Allan Barber:

A new report by agricultural consultancy Agra Europe entitled Preparing for Brexit suggests leaving the EU, to be determined by a referendum in 2017, could destroy the British farming sector. The authors have based their forecast on the Coalition government’s 2013 Fresh Start Policy document which theorised that British agriculture could imitate New Zealand and Australia’s success in surviving, even flourishing, in a post-subsidy world.

Not surprisingly there is plenty of scepticism about the realistic prospect of either of these scenarios eventuating. If British voters chose the Brexit option, it is most unlikely any government would eliminate all subsidies, while a cursory glance at the proportion of farm income from EU Common Agricultural Policy payments shows how laughable it would be to expect them to become suddenly profitable. . . 

Contest continues to hold appeal – Sally Rae:

Chris Pemberton was just a lad when he competed in the Young Farmers Contest.

It was 2005 and, at 17, Mr Pemberton was one of the youngest regional finalists in the contest’s then 36-year history.

He was still at boarding school at St Kevin’s College when he competed in the Aorangi regional final.

While unplaced, he performed creditably and was a favourite with the crowd. . . 

Spaans new DairyNZ head – Stephen Bell:

Waikato dairy farmer Michael Spaans has been elected the new chairman of DairyNZ.

The industry-good body held a special meeting of the board this weekend.

Spaans will serve an annual term as chairman, leading an eight-member board made up of five farmer-elected and three independent directors.
He replaced long-serving chairman and former Cabinet minister John Luxton who retired from the DairyNZ board last month after 12 years of service on dairy industry bodies. . . 

Yashili New Zealand’s Pokeno factory opens – Gerald Piddock:

Yashili New Zealand Dairy Co has opened its new state-of-the-art infant formula manufacturing plant in Pokeno, south of Auckland.

The 30,000m2 plant will employ 85 staff and have an annual production capacity of about 52,000 tonnes of formula product. It will produce formula under the brand ‘Super Alpha-Golden Stage Infant Formula’ with shipments to China expected to begin in early 2016.

Yashili New Zealand is a leading producer of infant milk formula for the domestic market in China. It was founded in July 2012 and is a subsidiary of Yashili International Holdings and Mengniu Dairy Co.  The new factory took three years to build and cost $220 million. The company’s goals were to produce the highest quality infant formula and raise the healthiest babies in China. . . 

Yashili, Arla and Danone sign agreement – Gerald Piddock:

Yashili International along with European dairy producers Arla and Danone have entered into global strategic cooperation agreement.

Signed at the opening of Yashili’s new infant formula plant at Pokeno on November 6, the agreement will see the three companies work closer together in supplying products into Arla and Danone’s markets.

“It is a significant agreement between these two great dairy producers who are each committed to the highest standard of food quality and safety,” Yashili International Holdings president Lu Mingfang said. . . 

 


EU-NZ free trade deal on table

26/03/2014

Prime Minister John Key has more good news for trade:

New Zealand and the European Union are to pursue a free trade pact – but don’t expect any action until at least 2015.

Prime Minister John Key made the announcement in The Hague after meeting European Commission president Jose Manuel Barroso and European Council president Herman Van Rompuy. He described it as “quite an important” meeting

Two-way trade between New Zealand and the 28 members of the EU totals $16 billion a year.

Key said the EU has, for the first time, agreed to consider a free trade agreement.

But he admitted an ambitious EU-US trade deal, as well as a pact with Canada, will take priority for the Europeans. 

Further progress is also not possible until after European Parliament elections this year, but officials will undertake a scoping study.

“We are actually seeing progress and a breakthrough that historically hasn’t been a option available to us,” Key said.

The deal has the support of both the British Prime Minister David Cameron and German Chancellor Angela Merkel, who he met on the sidelines of the major international summit. . .

Some of the credit for this must go to the good relationship between them and Key.

Two-way trade between New Zealand and the EU is worth about $16bn a year and has the potential to rise to $20bn by 2020. 

But exporters are hamstrung by hefty tariffs – including 8.2 per cent on kiwifruit. By comparison, Chile pays nothing because it is already signed up to an FTA with the 28-country bloc.

“It is easy to look at Europe and think Greece and Spain and some of the well pronounced debt problems,” Key said. “But sitting in amongst that are hundreds of millions of very wealthy consumers who earn a lot, spend a lot and fundamentally are the target market for what we sell.” . . .

A free trade deal with the EU won’t happen quickly but it would bring benefits for producers and their consumers who are paying far more than they need to for our produce because of tariffs.

The EU is our third biggest trading partner in spite of the handicaps we face from duties imposed on our products.

Spain is our biggest market for kiwifruit, even with that 8.2% tariff. The only other New Zealand produce I’ve seen there was apples.

It’s not hard to find New Zealand lamb in the UK and our venison in Germany.

A free trade deal would make it easier for our produce to compete on price and give people their more choice at a lower cost.

It would allow us to put our trading eggs in more baskets which would give better security and bargaining power.


Protection, subsidies incentivise meat cheats

11/02/2013

The discovery of horse meat in burgers in Ireland has been followed by news that up to 100% of meat in some lasagne came from horses too.

Liberty Scott points out that protection and subsidies incentivise the meat cheats:

This is fraud, and should be treated as such.  However, secondary to this are the market distortions created by the Common Agricultural Policy.  Meat moves freely and tariff free within the EU.  However, the EU imposes strict quotas on beef from outside the EU, such as a limit of 1,200 tonnes a year from New Zealand.  It also imposes a 20% tariff within that quota.  Although it allows outside quota beef in, it must have a tariff of around 100-250%.  All NZ beef imported into the EU must meet strict labelling and traceability conditions, unlike the subsidised EU beef.

 
There are obvious pressures to source cheap beef for low priced products, but the EU Common Agricultural Policy prevents this by propping up inefficient producers in the EU.  The quotas on imports should be abolished immediately, and tariffs abolished, so that beef can be imported at low cost and high quality.  It wont stop fraud happening, but reduces the pressure to substitute real beef for cheap alternatives due to trade protectionism.
EU residents pay higher taxes to subsidise inefficient producers and consumers pay more for food, some of which is of lower quality, because of tariffs and reduced competition.

Horse meat is widely eaten in Europe so it might not be a food safety issue though it does call into question the effectiveness of strict food labelling requirements.

Whether or not it’s a food safety issue though is no excuse for fraudulently labelling horse meat as beef. However, there would be a lot less incentive for this if the EU had freer trade with countries outside its borders.


Spain takes over US presidency?

03/01/2010

The headline says:

Spain takes over US presidency

That really would be headline news but the story which follows is somewhat less sensational:

Spain took over the presidency of the European Union on Friday. . . The six-month rotating post passed from Sweden to Spain at the stroke of midnight. . .

We usually refer to the European Union as the EU. In Spain it’s the Union Europeo and they call it the UE, but I don’t know any language where it’s the US.


Sugar beet silliness

17/12/2009

Phil Clarke blogs on sugar beet silliness in the EU.

Good weather has led to a bumper crop of beet and the EU as a whole is expecting to produce about 2.4 million tonnes. But that exceeds the 1.37m it’s allowed to export under a WTO ruling.

That was based on a complaint by Australia, Brazil and Thailand which had argued that the EU was “dumping” its surpluses on the world market.

But that was in the days when world prices were way below EU levels. The situation is very different today, with the global shortage of sugar leading to a doubling in prices in just 12 months.

The response suggested by CIBE is for the EU to increase the export ceiling for 2010, so that, instead of having to stockpile about 1m tonnes of surplus sugar, processors can sell it to the world market and help relieve the global shortage…

What could be more sensible? Global prices would come down a bit, the EU sugar industry would earn a bit and consumers the world over would save a bit.

But that’s not the way Brussels sees it. It maintains that “it is not possible to export out-of-quota sugar in excess of the WTO limit” and suggests the only option is to carry over any surplus into next season.

The EU could make a request to the WTO to lift the export ceiling.

 It certainly seems unlikely that the likes of Australia, Brazil and Thailand would complain, since their consumers are feeling the impact of high sugar prices too.

The more likely outcome, however, is that the EU will do nothing. As a result, each member state will have to put its extra sugar into storage this winter, with all the cost that involves, and carry it forward to next season.

And that will mean further reductions in EU growers’ 2010/11 contract tonnages – even though prices are sky high and the world is crying out for sugar.

I presume the reason the WTO is involved is because the sugar beet production is subsidised.

The market might not be perfect and it means accepting the lows which inevitably occur but this illustrates how silly subsidies are when they prevent producers from benefitting from the highs.

It’s not good for consumers either. They’ll have been taxed to pay for the subsidies when demand was low and now there’s a sugar shortage they’ll be paying higher prices.


Dairy subsidies to cost NZ $122m

27/06/2009

Federated Farmers president Don Nicolson got a lot of attention for his piece in the Wall Street Journal on milking trade subsidies.

Perhaps he should follow that up with an invoice because the New Zealand Institute of Economic Research has calculated that the subsidies on dairy products introduced by the EU and USA will cost the New Zealand economy $122 million.

New Zealand’s dairy output may fall by around 5% and the value of milk, butter and cheese exports could decline some 8% as American and European subsidies create an oversupply of product, according to the NZIER’s latest Insight newsletter. The think-tank predicts the global economy will be worse off by around US$41 million, although countries such as Japan and Korean would benefit from lower world prices.

The prospect of lower dairy prices “will cause kiwi farmers’ incomes to fall below where they would otherwise have been, through no fault of their own,” said the institute’s deputy chief executive John Ballingall. “The risk of ongoing retaliation between the U.S. and EU, and potentially others, could lead to larger increases in subsidies, tariffs and other trade barriers over time.”

The immediate impact of the subsidies was partially responsible for the decrease in Fonterra’s forecast payout for the new season.

The threat of ongoing retaliation, bigger subsidies, tariffs and other trade barriers is even more concerning. It will hinder the recovery and hamper progress towards freer trade.

The NZIER Dairy Insight newsletter is here.


If not the market then what?

23/06/2009

Europe “should not leave the food industry in general, and the milk sector in particular, just to the law of market forces, which is the least social, ecological and economic law,”  . . . 

That’s the  French Agriculture Minister Michel Barnier urging his EU colleagues to listen to protesting farmers in Luxembourg.

He was responding to EU Agriculture Commissioner Mariann Fischer Boel.

 She had no magic wand to address their grievances, she said.

She implicitly criticised countries such as France and Germany for continuing to question the decision to lift quotas.

“It’s dangerous and irresponsible to foster unrealistic hopes on what we can do,” she said.

Quite.

If it’s not left to the market it’s up to governments and what can they do?

Government means the taxpayers who are also the consumers who’d pay more if quotos were lowered or producers subsidised.

Goverments have a role in welfare but any interference by them in the marekt will merely prolong the pain and delay the recovery.


Government intervention isn’t the answer

22/06/2009

Thousands of farmers from the European Union’s 27 member states are taking to the streets of Luxembourg today to demonstrate against poor returns.

“Food production is the single biggest economic activity in Europe and it is facing serious problems,” said the organisation’s secretary general Pekka Pesonen. “Dairy in particular is in a very severe crisis, and other sectors, from pig meat and olive oil to sheep and goats are suffering, too.

“Even as the causes of the problems differ, the result is always the same – we are not getting a fair share of the value of the final product.”

Producers all over the world could no doubt say the same thing but those of us who’re in the real world know that’s mostly to do with the market and very little to do with the government.

The crisis affecting the dairy sector is likely to be a major focus of attention. Despite a decision by the EU dairy management committee this week to raise export refunds for milk powders, Irish Farmers’ Association leader Padraig Walshe called for a “much more aggressive approach”.

“Prices have fallen to their lowest level in recent history, in some countries to those of 1983. To make matters worse, production costs have remained at an all-time high. This is disastrous for farm incomes, endangering the very existence of dairy production in the EU.”

A taste of the protest to come next week was given in Brussels on Thursday (18 June), when hundred of farmers from Germany, France, Belgium and Holland drove their tractors to the city centre as EU heads of state met for a summit meeting. . .

Their principle demand was for an immediate 5% quota cut, to tighten the market and allow cost covering prices to be achieved. But the EU Commission says production is already well below quota and such a cut would make no difference.

A 5% quota cut to tighten the market means a forced reduction in supply to force prices up so consumers pay more. That’s not a subsidy from the taxpayer but from the consumer which amounts to the same thing in the end.

Farming in Europe is facing a crisis. But if government intervention in the market by way of subsidies and quota controls is the answer they are asking the wrong question.


Better standing on our own feet

27/05/2009

New Zealand farmers’ anger at the USA’s decision to subsidise its dairy exports is well founded.

Federated Farmers dairy section vice-chair John Bluett says:

“It’s a serious concern. The US is going to subsidise 92,000 tonnes of export product. In perspective, New Zealand only produces 105,000 tonnes, so it’s the equivalent of almost subsidising all New Zealand’s production.”

In the Waikato alone it could cost farmers $180 million and it is likely to mean a lower payout next season.

There may be a small benefit to consumers if the subsidies result in lower international commodity prices because that could flow through to lower retail prices here. But any gain will be more than cancelled out by the pain imposed on the wider economy.

However, angry as farmers are, none are calling for a return to subsidies. Hard as it is in the real world at the mercy of markets, it beats the days which Rob describes when farmers’ incomes went up and down at the whim of the government.

There’s another reminder of how bad that is at Phil Clarkes’ Business Blog:

In France, for example, some 81 dairies have been blockaded and dairy farmers have threatened a national “milk strike” if an ongoing “mediation process” fails to deliver a meaningful lift in prices.

In Germany, meanwhile, six women have gone on hunger strike, while around 6000 dairy farmers took to the streets of Berlin to demand a national milk summit.

And this week the protest headed to Brussels, with a claimed 2000 farmers from 10 member states clashing with riot police outside the EU Council building, while farm ministers discussed the market situation.

Taking what the market offers isn’t always easy, but standing on our own feet beats going cap in hands to governments as they do in Europe to find out not only what they’ll earn but also how much they can produce.

Hat Tip: QuoteUnquote


Feds talk straight to Obama

24/05/2009

Federated Farmers aren’t mucking about with their response to the USA’s reintroduction of export subsidies for dairy products.

In a media release headlined US dairy subsidies a potential catostrophe they start by inviting President Obama to New Zealand to explain why his administration has decided to subsidise 92,000 tonnes of American dairy products destined for international markets.

“I cannot express the anger I feel about today’s decision,” says Philip York, Federated Farmers economics and commerce spokesperson.

“The precedent this sets is actually worse than the European Union’s (EU) decision in January to go down the same path.

“Federated Farmers had respected American restraint from not retaliating against the EU. That has all been thrown away on the compost heap that is the US dairy lobby.

“The US dairy lobby is more interested in protecting subsidies than in exporting on free market principles. The fact President Obama caved into their demands is a genuine shock. I honestly thought the age of pork barrel politics had passed but I’m sadly mistaken.

“What’s worse is that this comes at a time when international prices for dairy commodities had started to stabilise.

“Now, from left field, comes this ludicrous decision which takes the world to the edge of trade anarchy.

“The World Trade Organisation needs to get to Washington and Brussels urgently to discuss this with the EU and the Obama administration. I know Don Nicolson, the President of Federated Farmers, will be raising this at next month’s meeting of the Cairns Group.

“This could easily set off a domino effect as smaller economies rush to follow the irresponsible ‘example’ being set by the EU and the United States. Tariffs and tit-for-tat trade barriers could depress international prices and trade volumes before spreading to other trade categories.

“The world is back to five minutes to midnight for an all out trade war and President Obama needs to get his hand off the trigger,” Mr York concluded.

That’s a very direct message.

I don’t think the chances of Obama hearing it are very high and the chances of him heeding it are even lower but no-one can accuse Feds of taking a half-hearted approach to their fight for free trade.

Hat Tip: SOLO


But they did it first

23/05/2009

The USA is reintroducing export subsidies for dairy products in a tit for tat response to the EU which reintroduced subsidies earlier in the year.

But they did it first is no way to win an argument, but that’s the excuse they’re using.

US Agriculture Secretary Tom Vilsack says the move is in direct response to the European Union’s introduction earlier this year of export subsidies. It will allow American exporters to compete fairly, he says.

His idea of fair isn’t quite the same as mine.

At the same time, Mr Vilsack says the Obama administration remains strongly committed to a pledge at the recent G20 summit to refrain from protectionism.

He says every attempt will be made to minimise the impact on countries that do not subsidise their dairy producers.

If he wants to give up his day job he could find another writing ads for Tui.

Trade Minister Tim Groser isn’t impressed.

Dairy farmers the world over are under pressure, but this is a short-sighted response when the international dairy market has recently been showing signs of stabilising. The decision is a setback, and will be damaging to world markets.

“Export subsidy assistance will have a relatively small effect on income for US dairy farmers, and may even prove counterproductive by creating uncertainty and depressing international dairy market prices. Unsubsidised producers, like those from New Zealand, will bear the cost of these trade-distorting measures.

“I am disappointed that the United States should have followed the poor example set by the European Union when it reintroduced export subsidies in January.

“While the US and the EU may consider they are both acting within their current WTO commitments, this sends a very negative signal to other WTO members. . .

Groser says it’s not whether these measures are legal but the bad example the EU and USA are setting.

 “The long term solution is clear: we need to complete the WTO Doha Round in order to secure the elimination of agricultural export subsidies. In the meantime, restraint is needed, not a resumption of retaliatory subsidisation.

The recession will provide excuses for increased protectionism which will do little, if anything, to help producers, increase costs for taxpayers and consumers and hamper the eventual recovery.


Ag outlook brighter than other sectors

28/03/2009

The outlook for agriculture is brighter, or at least less gloomy, than for most other sectors according to the EU Prospects for Agricultural Markets  which covers the period from 2008 to 2015.

 The global financial crisis will have an impact in the short term but the medium outlook is more positive with a gradual recovery in commodity prices and:

  • the growth in global food demand,
  • the development of the biofuel sector and the
  • long-term decline in food crop productivity growth.

 The report points to lower production of milk and meat in the EU which means less competition for New Zealand produce. 

While yesterday’s announcement that our gross domestic product declined .9%  in the December quarter is sobering, agriculture outperformed other sectors:

SNZ said primary industry activity increased 1.6 percent in the December quarter, while activity in goods producing industries fell 3.6 percent.

A rise in agriculture production was mainly driven by increased dairy production. For the December year activity in primary industries increased 0.9 percent, compared to an increase of 3.6 percent for the year to December 2007.

 The role meat and milk will play in our economic recovery was noted by AgResearch chief executive Andy West when he stressed the importance of research and development.

He cautions that R&D spend should not be curtailed as credit facilities dry up around the world.

While he doesn’t see any evidence of a decline in pastoral R&D spend in New Zealand, he agrees that it has come under pressure during the economic crisis.

. . . It is the single most important sector that will help us get out of the economic crisis,’ he told Rural News. ‘We have to export our way out and the dairy and meat sectors need all the assistance they can get.’

If the South Island field days are anything to go by, agriculture is not just the most important, it’s also one of the most positive sectors.

The Press reports that opening day numbers were up and while farmers were showing caution, they weren’t mentioning the r word.

And TV3 said that  recession was a dirty word among the farmers they spoke to.

It’s possible they only interviewed the optimists. No-one is saying that farming is booming, but the mood in the paddocks does seem to be more cautious than depressed and the EU forecast suggests a brighter outlook in the medium term.

Hat Tip: Phil Clarke’s Business Blog


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