Higher expectations of husbands than fathers

September 2, 2019

Jim Rose has a post at Utopia on research by Kathryn Edin showing women are choosier about their husbands than the fathers of their children:

Far from eschwing marriage as an institution, she found poor women idealised it to such an extent that it became unattainable. they didn’t believe that a marriage born in poverty could survive.

In a society that increasingly saw marriage as a choice, not a requirement, low-income women were embracing the same preconditions as middle-class women. They wanted to be ‘set’ before marrying, with economic independence to ensure a more equitable partnership and a fallback should things go bad. They also wanted men who were were mature, stable and who had mortgages and other signs of adulthood, no just jobs.

“People were embracing higher and higher standards for marriage,” edin explains. From a financial standpoint alone, “the men that would have been marriageable [in the 1950s] are no longer marriageable now. That’s a cultural change.” The low-income women in Edin’s study reported that decent, trustworthy, available men were in short supply in their communities, where there were often major sex imbalances thanks to high incarceration rates. This, Edin found, was why low-income women were willing to decouple childbearing from marriage: They believed if they waited until everything was perfect, they might never have children. And children, says Edin, “are the things in life you can’t live without.” As one subject explained, “I don’t wanna big trail of divorce, you know. I’d rather say, ‘Yes I had my kids out of wedlock’ than say ‘I married this idiot’. It’s like a pride thing.”

Marriage was so taboo among her subjects that Edin discovered two couples in her sample who claimed they were unmarried at the time of their babies’ birth but were actually not. One of the women had even been chewed out by her grandmother for marrying the father of one of her children.

The research centred on low-income women but this mindset can also be found among women with more means.

I can understand the strong desire to have children but how sad is it that the standards women set for fathers of their children are lower than those they expect in husbands; that men are acceptable as sperm donors but not to play the important parenting role in their children’s lives?

Women don’t want to marry ‘this idiot’ but they accept them to father their children.

Marriage used to be the institution that provided stability and security for families, for better for worse, for richer, for poorer . . .   now it’s an optional extra if an ideal man can be found and fathers don’t matter much.


Rural round-up

May 5, 2018

Save water and cut effluent – Richard Rennie:

A partnership between Ravensdown and Lincoln University has unveiled technology its creators believe will reduce farm effluent loads significantly while also saving billions of litres of fresh water.

ClearTech, launched this week, has taken the dairy industry’s two biggest issues, effluent losses and water consumption and dealt with both through a combination of simple water purification principles, managed by a computerised controller.

ClearTech puts a coagulant into the effluent when a farm dairy yard is hosed down. It causes the effluent particles to cluster together and sink, leaving most of the water clear and usable.

Ravensdown effluent technology manager Jamie Thompson said there are challenges to getting effluent to clot given the variable pH, turbidity and content of the waste on any given day. . . 

Dairying unexpected but welcome career choice – Nicole Sharp:

Southland-Otago Dairy Manager of the Year Jaime McCrostie talks at the recent regional field day at the Vallelys’ property, near Gore, about her journey in the dairy sector.

Jaime McCrostie never thought she would end up dairy farming.

She grew up on a sheep farm and it was her neighbour who taught her how to milk cows.

She has travelled all over the world and worked in a range of industries, but always seems to come back to the dairy industry. . . 

MediaWorks to broadcast Grand Final of 50th FMG Young Farmer of the Year:

A new deal will see MediaWorks broadcast New Zealand’s longest running agricultural contest the FMG Young Farmer of the Year.

Under the agreement, an edited version of the 50th Grand Final of the iconic contest will be broadcast on ThreeNow.

ThreeNow is MediaWorks’ free video on-demand streaming service available on smart TVs and mobile devices.

MediaWorks’ Head of Rural, Nick Fisher, said the broadcaster is proud to be partnering with NZ Young Farmers to produce the programme. . . 

Tribute paid upon receiving award – Pam Jones:

An Alexandra man has received national recognition for his services to irrigation in Central Otago, but has paid tribute to the work of “two extraordinary women” as well.

Gavin Dann was one of two recipients of a 2018 Ron Cocks Award from Irrigation New Zealand during its conference in Alexandra recently, for his leadership of the Last Chance Irrigation Company (LCIC) and his work to establish a community drinking water supply.

Mr Dann had been the “driving force” behind a number of initiatives to improve the Last Chance company’s operations, supporting the scheme for more than 40 years, Irrigation New Zealand chairwoman Nicky Hyslop said. . . 

 

Landcorp board gets a refresh – Neal Wallace:

Former Landcorp chairwoman Traci Houpapa was available for reappointment but missed out because the shareholding ministers wanted to refresh the state-owned enterprise’s board, she says.

Her eight-year term on the board, of which three were as chairwoman, has come to an end, along with three other directors, Nikki Davies-Colley, Pauline Lockett and Eric Roy.

Houpapa accepted her appointment was at the behest of the Ministers of State Owned Enterprises Winston Peters and Finance Grant Robertson.

The newly appointed directors are Nigel Atherfold, Hayley Gourley and Belinda Storey.

She said the Landcorp she joined eight years ago was very different to the one she has just left, with a different strategy, focus and operating model. . . 

 

Regional fuel tax will add to the cost of food:

Regional fuel tax legislation, as it stands, is likely to add costs to fresh fruit and vegetables for consumers.

Today, Horticulture New Zealand spoke to the Finance and Expenditure Select Committee about its written submission on the Land Transport Management (Regional Fuel Tax) Amendment Bill, that is endorsed and supported by a further 18 organisations.

“While in principle, we agree with measures to reduce road congestion in Auckland, we believe there are un-intended consequences of the Bill as it stands; these could include increases to the prices of healthy, fresh fruit and vegetables,” Horticulture New Zealand chief executive Mike Chapman says. . .  . .

Bull finishing farm steered towards a sale:

One of Northland’s most substantial bull finishing farms has been placed on the market for sale.

The 400-hectare property is located on the western outskirts of the township of Kawakawa in the Mid-North, and is held over 24 individual titles in three blocks. The farm’s topography consists of 268 hectares of rolling to medium-contour grazing paddocks, and 108 hectares of flat land – allowing for tractor-access to 95 percent of the property.

The farm also contains 24 hectares of mature pruned pine trees ready for harvesting, and estimated to be worth in the region of $360,000. The freehold farm has been owned by three generations of the Cookson family. . . 

Delegat has record 2018 harvest, driven by increase in NZ grapes – Jonathan Underhill:

 (BusinessDesk) – Delegat Group, New Zealand’s largest listed winemaker, says it had a record harvest this year, driven by an increase in New Zealand grapes, while its Australian harvest fell.

The Auckland-based company said the 2018 harvest rose to a record 40,059 tonnes, as grapes collected in New Zealand rose 10 percent to 38,012 tonnes. The Australia harvest for Barossa Valley Estate fell to 2,047 tonnes from 2,760 in 2017.

“The 2018 vintage has delivered excellent quality in all regions,” managing director Graeme Lord said in the statement. . . 


Best intentions worst results

February 21, 2017

LIving Wage advocates want employers to pay a minimum of $20.20 an hour from July.

The rate, more than $4 above the adult minimum wage, is at the level needed to provide families with the necessities, they say.

How many jobs will that cost?

The current Living Wage, of $19.80 has already cost 17 jobs at Wellington City Council according to a report by Jim Rose for the Taxpayers’ Union.

The report’s key findings were:

  • Seventeen Wellington City Council employees lost their jobs after being under the skill level required for the living wage.
  • Councils hire on merit, so candidates under the skill level commensurate with the living wage will be crowded out by higher-skilled candidates.
  • There is no consensus or scientific basis for the calculation of a living wage. Any calculations are politically subjective.
  • Any living wage in New Zealand will be abated by up to 40% by decreases in government transfers and increased income tax obligations.
  • Living wages shift the burden from means-tested taxpayers to ratepayers and business owners.
  • Below-living-wage employment allows for in-work training, where employees trade off lower wages for the opportunity to learn skills that increase their future earning potential. 

Living Wage Aotearoa New Zealand nobly want to alleviate poverty and reduce unemployment with their activism for a living wage, but the evidence to date shows they are achieving the exact opposite. This report shows that a living wage will only make it harder for low wage earners to find work.

Contrary to intentions, living wage policies actually hurt the very people they seek to help. For the first time, we reveal that seventeen parking wardens lost their jobs at the Wellington City Council as a result of its living wage policy.

Living wage policies mean higher-skilled candidates apply for jobs previously occupied by lower-skilled candidates. Of course councils will hire on merit and shortlist the candidates who previously would never have applied for the lower, pre-living wage role. That’s exactly what happened when Wellington City Council brought its parking services in-house.

Minimum wage applicants do not get a shot against better-qualified candidates attracted by the higher wages. So much for the poverty alleviation and reduced unemployment.

The economic theory is clear that living wages do more harm than good, but the job losses in Wellington is the proof in the pudding. Councils should stop implementing these living wage policies which achieve so little but cost ratepayers who can ill afford it.

Living wage policies mean ratepayers pay more for less and achieve none of the intended poverty relief.

Those are very damning conclusions, but not surprising.

The Living Wage is based on what someone thinks a family of four needs to have a reasonable life.

It bears no relation to individual employee’s needs, ability or performance.

I have several reservations about Working For Families but it is a better way to help low income workers with dependent children than the living wage which takes no account of the value of their work.

The full report is here.


Too little and too much

April 5, 2016

Oh Dear.

Labour leader Andrew Little still wants to stiff-arm banks:

. . . ‘I stand by the stance I took, which is to get very heavy-handed with the banks. Because the truth is when the banks fail to follow the signal that the Reserve Bank is sending, that’s keeping money out of the back pockets of ordinary Kiwis, and I will always fight for their interests and for their rights. If the banks don’t want to play ball when it comes to the way we run our monetary policy, actually, there’s only one outfit that can really take them on, and that’s the government.’. . .

The Reserve Bank is independent because it’s not the government’s role to set interest rates.

Retail banks are independent businesses and it’s not the government’s role to tell them what interest rates they should charge.

Interest rates are at historically low levels. They are higher in New Zealand than in many other countries which is partly a reflection on overseas investors’ perception of our economic and political stability.

That would be threatened by any stiff-arming of banks by government.

State intervention would also make business more risky for banks, the lenders and their borrowers.

Little’s not the only politician on the left who wants the government to get involved in banking.

Green co-leader James Shaw wants it to give $100m to Kiwibank which Prime Minister John Key described as dangerous:

He told Morning Report he did not support the idea, as the bank would be asked to make “non-commercial loans” – putting it in a weak position.

He said the Greens were using a state-owned enterprise (SOE) to bring about a policy goal.

“But to do that would be highly dangerous, because what you will end up doing is being in a position where you’re effectively asking them to make non-commercial loans, and potentially non-commercial returns.”

Mr Key said that would be “very poor public policy” and could lead you to a situation where the bank had to be bailed out. . . 

Jim Rose at Utopia points out other flaws:

Note well that the $100 million capital injection is to expand in to commercial banking. More aggressive passing on of interest rate cuts may jeopardise credit ratings if this lowers the profitability of KiwiBank. KiwiBank has an A- rating. . .

KiwiBank is minnow in the mortgage market and a pimple in commercial lending. Rapid business expansion is risky in any market, much less in banking. . . 

The proposal to use KiwiBank to lower mortgage rates does not add up. KiwiBank does not pay much in the way of dividends to fund such a foray.  KiwiBank is already far more leveraged than any other New Zealand major bank. 

Rob Hosking points out that while the policy might have political appeal it is bad economics:

Somewhat lost in all this is the risk of a policy that will encourage New Zealanders to take on more debt. . . 

 

New Zealand’s current account deficit has been there since 1974 and although it is now lower than the peak it reached a decade ago, it is still firmly in the red.

The Scandinavian and North European countries might be running larger household debts on their balance sheets, but these are internally funded: Norway and the Netherlands, for example, are running current account surpluses of  around 10% of GDP as opposed to New Zealand’s 3% of GDP deficit.

So they can afford to run up those debts.

New Zealand cannot. And a drive to push interest rates down – a taxpayer-funded drive no less – sounds more than a little foolish given New Zealand’s long-standing economic and financial vulnerabilities. . . 

Shaw’s suggestion of $100m sounds like a lot of money and it is far too much for taxpayers but it wouldn’t be enough to help many people.

Besides, if people can’t borrow money at the current very low rates, it would be a dangerous move for them, the banks, any other creditors and the wider economy, to try to make it easier.

When Labour was in power in the 1980s interest rates were higher than 20%. When it was in power in the noughties, interest rates were in double figures, well above current rates.

There were several reasons for that and the big one which politicians could have influenced was high government spending and mismanagement of public money.

If Little and Shaw want to keep interest rates low they should be supporting the current government’s efforts to keep a tight rein on its spending and developing policies which would continue that.

That is far better policy than either stiff-arming banks or using more taxpayers’ money to prop up Kiwibank.


More than a little stupid

March 29, 2016

Mirror, Mirror on the wall, which is stupidest of all?

Strong arming banks and legislation was rightly met with indignation.

Then came 200 bucks for “free”, funded from tax paid by you and me.

And now you want the flag to change by whatever process you arrange.

If you think you’re going to pick it, you know just where you can stick it.

 

March hasn’t been a good month for Andrew Little, the Labour Party and anyone with hopes they might soon be fit to lead a government.

Little’s attempt to get onside with farmers by suggestions of strong arming banks and legislating to force them to reduce interest rates was met with the derision it deserved.

Then he came up with the proposal of a Universal Basic Income which, as the Herald points out is an idea that’s more bad than good  :

. . . The economy would suffer under punitive levels of taxation, avoidance would be rife, and the benefits would be illusory. . . 

The Taxpayers’ Union points out a UBI would require income tax rates of 50% or more:

A Universal Basic Income which avoided superannuates and beneficiaries being made worse off would require a flat rate income tax of more than 50% or drastic cuts in government services to pay for it, according to a new report released today.

The report, Money for all: the winners and losers from a Universal Basic Income, by economist Jim Rose, examines the Labour Party’s “Future of Work” proposal for a UBI and the more modest proposal by the Morgan Foundation.

A more affordable version of Labour’s scheme, such as that proposed by the Morgan Foundation of $11,000 per annum ($210 per week), would cost $11 billion dollars more than the existing welfare system, while making solo mothers $150 per week worse off. For superannuates, a UBI at this level would see their weekly income reduced by $50.

Taxpayers’ Union Executive Director, Jordan Williams, says:

“We find it startling that the Labour Party would be floating the idea of a replacement to the welfare system that would see those most vulnerable in society being far worse off. A UBI replaces helping those most in need with handouts to the middle-class and millionaires.”

“If you take Labour’s assurances that no one will be left worse off under their UBI, the amount would need to be so high that Treasury’s economic modelling suggests that a flat income tax of between 50.6% and 55.7% would be needed to pay for it.”

“Here is a political party which for years has rightly been telling New Zealanders that current superannuation entitlements are unaffordable. Now they want to effectively extend the same scheme to every New Zealander from the age of 18.”

“The Morgan Foundation proposes to pay for its more modest UBI with a tax on those holding capital. Such a tax would incentivise all those modern and innovative industries Labour want to encourage, to shift off-shore.”

Jim Rose, the author of the report, says:

“We don’t believe Labour have fully considered the consequence of a UBI on labour supply and economic incentives. People would almost certainly work fewer hours meaning that the burden of supporting the programme would be borne by a fewer number of taxable working hours, potentially requiring even further tax increases.”

“Even the Labour Party’s own paper concedes that the taxes that would be required to fund a UBI higher than $11,000 per year may be ‘unrealistically high’. The analysis in the report certainly backs that.”

Key points and conclusions:

• The Morgan proposal would cost $10 billion more than the current welfare system but leave those most in need worse off.

• For a UBI to achieve any reduction in poverty levels, or to avoid it costing those in society who most need help, much higher taxes are required. These reduce the incentives to work and economic growth.

• A UBI which allowed those currently receiving benefits and/or superannuation would need to be at least $15,000 per year (equivalent to the current average level of benefits). To pay for this, Treasury estimate that a flat income tax of between 45% and 56% would need to be introduced (assuming other taxes stayed equal).

• Child poverty is not reduced by a UBI less than $15,000 per year because single parents receive no more income support than before.

• A UBI would likely push the New Zealand economy into recession off the back of the reduced labour supply from the windfall increase in incomes alone.

One of the National-led government’s successes is a reduction in number of people in long term benefit dependency with all the financial and social costs that go with it.

A UBI would reverse the good done by that and encourage more people into welfare dependency.

Not content with these two bad ideas, this morning Little has come up with another:

In the wake of the flag referendum, the opposition leader said he voted against the alternative as it “doesn’t reflect anything about New Zealand at all”.

“I’m pleased to say we haven’t adopted it,” he said. 

Mr Little said the country should revisit the issue “sooner rather than later”, suggesting a flag that “genuinely represents who we are, the diversity that is New Zealand”. 

Doesn’t reflect anything about New Zealand at all? Anyone’s views on the merits of the alternative flag are a matter of opinion but there is no arguing that the Southern Cross reflects New Zealand’s place in the world and that the fern is recognised as a symbol of New Zealand here and abroad.

It was used long before sports teams adopted it and they did so for that reason.

That aside, there is a mood for change but Little can’t lead it.

He voted for the legislation which set the process, campaigned for Labour with a policy to change the flag then, after the election put political expediency before his principles by criticising the process, the timing and the cost.

The time to criticise the process was before voting for it.

If the timing was wrong last week, it can’t be right this week.

And if the cost of the process we’ve just gone through was too high, another process “sooner rather than later” is even higher.

The party partisan part of me is amused by the way Little stumbles from one demonstration that he’s more than a little stupid to another.

The rest of me is concerned that the leader of the second biggest party in government keeps showing he’s ill-fitted to lead the Opposition let alone a government.

 

 


Rural round-up

August 7, 2015

Rabobank Report: Moving Globally; What role will China play in the global beef market?:

Rabobank sees great potential in China’s beef market, and believes that Chinese investors will play an influential role in the global beef market over the next decade. According to Rabobank’s latest report, Moving Globally: What role will China play in the global beef market?, China’s beef demand will grow an additional 2.2 million tonnes by 2025. Driven by the weak domestic production, but with strong demand, the beef sector will likely become the first agricultural sector where China has high integration with the rest of the world and Chinese investors are expected to play an influential role in the global beef market.

In addition to the volume gap, China’s beef market also demonstrates potential for value-added and branded beef products. Strong demand from the food service and retail market channels provides opportunities for both Chinese and foreign companies in the further processing sector. . .

 

Fonterra’s restructure more about poor strategy than milk price – Allan Barber:

When Fonterra was formed back in 2001, there was a great sense of optimism about the potential for a New Zealand dairy company to compete on a truly global scale. The industry’s infighting and parochialism would be a thing of the past and the clear intention was to use the greater efficiencies and scale to create a substantially better performing business model.

The big question 14 years down the track is whether that objective has even remotely been achieved. Fonterra is the world’s leading exporter of milk products and the fourth largest dairy processor, so achievement to date appears consistent with the objective. But for many observers there was another, more ambitious expectation: to establish an internationally competitive value added business to compare and compete with Nestle and Danone. . .

Dairy sector needs to work together to manage downturn:

National accounting and business advisory firm Crowe Horwath is calling on all stakeholders in the dairy industry to work together to help the sector get through the current difficult period of lower milk solid prices.

On the back of dairy companies announcing a string of forecast milk price downgrades and prices continuing to plunge at the Global Dairy Trade (GDT) auctions, predictions are the current hard times for the dairy sector could potentially last another 18 months to two years.

Crowe Horwath says given the scale of the challenge now being faced by the industry, doing nothing is not an option for anyone involved, including farmers, banks, farm consultants and business advisors. . .

 

Fish & Game Calls for Fonterra to Lift Its Game After Pollution Conviction:

Fish & Game says Fonterra needs to lift its game after the dairy giant was fined $174,000 for several pollution offences under the Resource Management Act.

The Bay of Plenty Regional Council prosecuted Fonterra for polluting the and other waterways after several wastewater system failures at Fonterra’s Edgecumbe dairy plant.

The offences occurred several times between September 2014 and April 2015.

Fonterra pleaded guilty to six charges and was sentenced in the Tauranga District Court by Judge Smith. . .

 

I’m worried! I’m sympathising with organic farmers over a land use conflict! – Jim Rose:

Writing this blog of sound mind and sober disposition, I still have considerable sympathy with two organic farmers over a land use conflict they have with the neighbouring gun range.

Local land use regulations allows a gun club to set up 600 m away with competitive shooting days all day for 88 days a year. That is a voluntary self restraint. They could hold shooting competitions every day of the year. The local land use regulations allow the use of guns on rural land. The gun club used this absence of a prohibition on the use of guns in the frequency of use to set up a gun range to fire guns all day long on rural land. . . .

Market Continues to Show Strength:

New Zealand Wool Services International Limited’s General Manager, Mr John Dawson reports that a continuing upward trend at today’s South Island wool sale saw prices increase.

The weighted indicator for the main trading currencies decreased from 0.6314 to 0.6181, down 2.1 percent. The US dollar rate was down to .6520 from .6670 which meant increased prices in NZC terms.

Of the 5,564 bales on offer 5,260 sold, a clearance of 95 percent. . .

 

Matariki Forestry Group announces recapitalisation:

Matariki Forestry Group (“Matariki”) today announced a NZ$242 million capital infusion from Rayonier Inc., its largest shareholder. This injection of capital will be used for the repayment of all outstanding amounts under its existing NZ$235 million credit facility and for general corporate purposes.

Upon completion of this capital infusion, Rayonier’s ownership in Matariki will increase from 65% to approximately 77% and the Phaunos Timber Fund ownership will be reduced from 35% to approximately 23%. The capital infusion is subject to certain closing conditions including New Zealand Overseas Investment Office approval and is expected to close by year end. Matariki will realise interest cost savings of approximately NZ$15 million annually as a result of the recapitalisation. . .

 

NZARN says strategic feed approach key to farmer viability:

Nutrition experts have entered the milk price payout debate saying that a strategic approach and optimising home grown and supplementary feed resources are key to long-term viability.

The New Zealand Association of Ruminant Nutritionists (NZARN) urges farmers, in an article published on their website (www.nzarn.org.nz) to benchmark themselves against the best performing farms to identify areas for improvement.

Dr. Julian Waters, NZARN Chairman says, “Maximising utilisation of home grown resources such as pasture, silage and crops should be the basis for a profitable business, with a sound strategy to incorporate supplements to increase efficiencies when home grown feed is limited.” . . .

 Internet Provider Puts Farmers’ Wellbeing First:

New Zealand internet provider, Wireless Nation, further demonstrates its commitment to the rural sector in a new agreement with Farmstrong, an initiative to promote wellbeing for all farmers and growers across New Zealand.

Wireless Nation’s zero-rated data agreement means that its Satellite Broadband customers can access Farmstrong’s website without the data counting towards their data cap.

Wireless Nation’s technical director, Tom Linn says he is passionate about making internet connectivity easier for people living in rural areas. . .

New Forests agrees to purchase Marlborough timber plantations from Flight Group:

New Forests today announced that it has reached agreement to purchase approximately 4,200 hectares of freehold land and softwood plantations from the Flight Group. The plantations consist of radiata pine and are located in the Marlborough region of New Zealand’s South Island.

The agreement forms part of a larger transaction by Flight Group, including the purchase of the Flight Timbers sawmilling assets by Timberlink, an Australian timber products processor that is also an investee company of New Forests. Completion of the plantation purchase by New Forests is subject to approval by the Overseas Investment Office. . .

 


Growing economy supports healthy environment

July 23, 2015

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

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

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

It is not axiomatic that economic progress means environmental deterioration.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Water is more complex but the same principles apply.    

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 Poorer people and countries have other priorities than the environment.

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


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