Rural round-up

August 16, 2013

$65 million early windfall for Ballance farmers:

More than 18,000 New Zealand farmers are in for some good news this week, as Ballance Agri-Nutrients delivers support for cashflows at the start of the spring season with an early record rebate payment.

Ballance’s record rebate and dividend will start arriving in shareholders’ letterboxes this week as the co-operative pays out $65 million to shareholders six weeks ahead of schedule.

The co-operative announced a rebate and dividend averaging $65 a tonne last month and advised shareholders it would pay out earlier than usual to help shareholders with early season cashflows.

The rebate averaging $60.83 per tonne and a fully imputed dividend of 10 cents per share represents an average $6,500 return to a fully paid shareholder. It follows the record trading result of $92.6 million delivered by the co-operative. . .

Farmer development programme benefits sector:

Following a successful pilot during 2012, Beef + Lamb New Zealand is now rolling out a development programme for farmers on B+LNZ farmer councils and those involved in project farms.

Facilitated by the Agri-Women’s Development Trust (AWDT), the programme covers three broad topics: governance, communications and decision-making, and leadership. Each topic is covered in a two-day module in Wellington.

Wairarapa farmer George Tatham was one of 12 farmers from across New Zealand involved in the pilot. George, who has since become chair of the Eastern North Island farmer council, says the skills he picked up over the three modules have benefited his farm business, as well as his council work. . . .

Changes expected to have major impact on dairy farmers – Crowe Horwath,

The Inland Revenue Department (“IRD”) has announced that fundamental changes are going to be made to the National Standard Cost (NSC) valuation methodology for dairy cattle that will increase livestock values commencing from the 2014 income year.

While there are a variety of livestock valuation methods available to farmers, the valuation methods most commonly used are NSC and the Herd Scheme. As a result, the changes will have a wide ranging impact on dairy farmers.

You might be thinking, well why do I care about a change in valuation methodology? The reason why this change is important for dairy farmers using the NSC valuation method is that any increases in value arising under the NSC valuation method are taxable income to the farmer. This will see an increase in taxable income for all dairy farmers using the NSC valuation method. . .

Top ram producers recognised:

New Zealand’s top ram producers were toasted on Wednesday night at the Sheep Industry Awards in Invercargill.

About 300 farmers and industry people attended the awards run by Beef + Lamb.

George and Kathryn Smith from Tamlet stud, near Wyndham, won the Alliance Group Terminal Sire gold award.

They run 300 recorded Texel ewes, 500 recorded Coopworth and 500 Romney ewes.

The Blackdale Sheep Industry Supplier of the Year Award went to Hugh and Judy Akers of Broadlands Station, who supply ANZCO. . .

Grass alone won’t grow the economy:

The fruits of a literary collaboration on innovation between the late Sir Paul Callaghan and award-winning science communicator Professor Shaun Hendy will be unveiled at Victoria University tonight.

The two physicists are authors of Get off the Grass, which will be launched in Wellington tonight (Thursday 15 August) and follows on from Sir Paul’s earlier book, Wool to Weta, which was published in 2009.

Get off the Grass argues that innovation in high-tech niches is the key to increasing New Zealand’s prosperity and that New Zealand needs to export knowledge rather than nature. . .

Entries open for international wine competition:

Entries are now open for the 2013 Avenues International Aromatic Wine Competition. Hosted by the Canterbury A&P Association in conjunction with the Canterbury A&P Show, the competition has been running for eleven years and is supported by competition naming rights partner Avenues – the magazine Christchurch lives by.

“Avenues is delighted to again be a sponsor of the International Aromatic Wine Competition. Nearly three-quarters of Avenues readers enjoy wine as part of their lifestyle, so it is fitting for us to support an event that toasts the best aromatic wines and their producers,” says Avenues Sales Manager Craig du Plooy. . .

Johanneshof Cellars Top Honours and Three Trophies at Spiegelau International Wine Competition:

Four medals, 3 trophies including joint ‘Producer of the Show’; not a bad effort for only entering five wines. Johanneshof Cellars, a small boutique winery in Marlborough, New Zealand, has taken top honours in the 2013 Spiegelau International Wine Competition.

Not only did the winery’s haul of accolades capture a cross section of their handcrafted wines including sparkling and dessert wines, but the two Gold medal winning wines went on to receive the Trophy for Champion Wine in both categories. The rare success of winning two trophies in one Show culminated at the end of the evening in Johanneshof Cellars being awarded the joint Trophy for ‘Champion Producer of the Show’. . .


Lilvestock tax loophole closed

March 29, 2012

The government has closed a loophole in the livestock tax rules which enabled farmers to get an unintended tax break.

Finance Minister Bill English and Revenue Minister Peter Dunne said:.

 . . . the current rules were too loose and allowed some farmers switching between the two main livestock valuation methods to receive an unfair tax advantage over those farmers who applied the rules as they were intended.

The Government has changed the rules so that those who elect to use the ‘herd scheme’ cannot change to the alternative ‘national standard cost scheme’, except in narrow circumstances. . .

. . . Mr English said the Government’s decision to move quickly to change the rules was driven by concerns about fairness for all taxpayers.

“The Government’s intention to make the tax system fairer was made clear in the previous two Budgets and, in the case of livestock taxation, was specifically signalled as part of Budget 2011,” Mr English said.

“Allowing some farmers to switch out of the herd scheme – at a time of high livestock values – would have left other taxpayers exposed to an estimated loss of $275 million over the next six years. That is simply unfair.”

Some people were gaming the system and it’s hard to argue with the changes.


Positive engagement beats political posturing

August 19, 2011

Federated Farmers is promising to engage positively on new rules for the way livestock are treated for tax purposes.

Feds President Bruce Wills said:

“Federated Farmers will now examine Inland Revenue’s proposals for reasonableness and real-world workability. Let me also stress that farmers do understand the importance of paying their fair share of tax.

“With livestock, there’s been some concern at the ease farmers have switched between the Herd Scheme and the National Standard Cost scheme. This is especially the case when livestock values are extremely volatile.

“Broadly speaking, the Herd Scheme treats livestock as a capital asset using Inland Revenue’s national average market values. The National Standard Cost scheme values purchased livestock at cost plus associated costs of husbandry.

“Farmers, as small and medium sized businesspeople, are heavily reliant on their accountant for tax advice. It’s a complicated area and you do rely on your advisors to interpret it for you.

“Federated Farmers will now start consultation with our membership to develop a position to take back to Inland Revenue,” Mr Wills concluded.

The conciliatory tone reflects the recent change in leadership of Feds and the reasoned response is a pleasant change from the political posturing which is too often the first reaction to new proposals.

The paper on proposed changes to taxing livestock was one of two released by the government yesterday.

The other is seeking feedback on proposals on the tax treatment of mixed-use assets such as cribs which are used for private purposes and also let for financial return.

The issues papers and a fact sheet are available here.


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