Focus, former MPs bound to fail

December 1, 2012

Quite why I was in parliament buildings in 1996 I can’t recall.

But I do remember being in the office of an MP with several others including Ross Meurant who had resigned from the National Party and formed the Right of Centre Party when his electorate disappeared with the introduction of MMP.

He told us he’d formed the party to give National a coalition partner. We told him it wouldn’t work.

We were right.

Since then he’s occupied himself in a variety of ways:

Meurant was elected onto the Rodney District Council in 1998. However, his time with the Rodney District Council was short-lived: the entire council was dissolved by the Minister of Local Government after an acrimonious relationship between the general manager and Meurant culminated in a split within the council.

Between 1999 and 2004 Meurant was engaged by parliamentary services as a part time adviser on agriculture, forestry, fishing and racing taxation policy to Winston Peters, . . .

He’s now on the board of another new party – Focus New Zealand (which was, until its first meeting last week, the New Zealand Rural Party).

Another ex-MP, Sandra Goudie is on the board with him.

She won the Coromandel seat from then-Green Party co-leader Jeanette Fitzsimons, served three terms then had the good sense to announce she wouldn’t contest the seat last year.

That good sense has now deserted her.

If either of them had learned anything from their tenure as MPs they would be aware of the time, energy, money and members needed to run a party and win elections. They would also know they won’t succeed.

Perhaps they didn’t realise that when they were in parliament and if they did they can’t have shared it with their fellow board members among whom is  former Federated Farmers Dairy chairman Lachlan McKenzie.

They might attract some votes from the disenchanted and deluded. But unless they can work a miracle which no other new party without a sitting MP has managed Focus NZ will join the long list of wannabe MPs and parties that have come and gone without getting anywhere near parliament.


New section chairs for Feds

June 30, 2011

When I saw the headline Dairy and Meat and Fibre groups gain new chair people I thought Federated Farmers was being a bit PC, but  people was correct in this case as one of the new chairs is a man and the other’s a woman.

Mt Hutt farmer Jeanette Maxwell was elected as Federated Farmers Meat and Fibre chair,  the first woman to hold this position. She replaces Bruce Wills who also stepped down. Willy Leferink is the new chairy for the dairy section, replacing Lachlan McKenzie who has stepped down.

The Dairy Vice-chairs are Robin Barkla and Andrew Hoggard. Michelle Riley and Kevin Robinson also elected to the executive.

Ciaran Tully continues as Sharemilkers section Chairperson.

Meat and Fibre section’s new vice-chair is Dugald McLean. Tim Mackintosh was re-elected to the executive with new members Will Foley and Lyn Neeson.


Three seek Feds’ vice-presidency

June 22, 2011

Four men announced last week they are competing to replace retiring Federated Farmers’ president Don Nicolson and now three are vying for the vice-presidency:

“It is somewhat unprecedented to have four presidential nominations and now three for Vice-President,” says Conor English, Federated Farmers Chief Executive and Returning Officer.

“There is a considerable amount of interest in all elected positions. Given the Federation is a membership based organisation, this is a tangible demonstration of vitality and our strong democratic basis.

“It is believed to be the largest number of candidates seeking the two most senior elected offices in over 66 years of Federated Farmers modern history.

I hope that it is a demonstration of vitality because as I wrote last week this many people competing for the top jobs could also be a sign of division.

That wouldn’t be good for the Federation, its members and the wider rural sector who all need a united voice.

Presidential nominees are: Donald Aubrey of Ben McLeod Station, who is vice-president; Frank Brenmuhl of Christchurch, a former Federated Farmers dairy section chair; Lachlan McKenzie of Rotorua who is dairy spokesman; and Bruce Wills of Napier, current meat and fibre spokesman.

The three seeking the vice-presidency are Dr William Rolleston of Timaru, David Rose from Invercargill and Matamata’s Stewart Wadey.


Four candidates – sign of strength or division?

June 15, 2011

Four men are vying to become Federated Farmers’ president when Don Nicolson retires at the end of the month.

“This will be the first contested election for the position of President since the early 1990’s,” says Conor English, Federated Farmers Chief Executive and Returning Officer.

“It is believed to be the largest number of candidates seeking the office of President in Federated Farmers history.

When so many voluntary organisations are struggling for members and finding people willing to become office holders is increasingly difficult, this could be seen as a sign of the organisation’s strength.

But it could also be a sign of division in the Federation.

I hope it’s not the latter. Farmers and the wider rural community need a strong and united voice and that requires an organisation focussed on issues of concern to members not one side-tracked by internal manoeuvring.

The nominees are: Donald Aubrey of Ben McLeod Station, who is vice-president;  Frank Brenmuhl of Christchurch, a former Federated Farmers dairy section chair; Lachlan McKenzie of Rotorua who is dairy spokesman;  and Bruce Wills of Napier, current meat and fibre spokesman.


Water makes us lucky

May 10, 2011

When our average rainfall is about 20 inches and that can get down to not more than half that in a dry year we’re loathe to say we’ve had too much rain.

After an unusually wet start to the year and with something like May’s total rainfall coming in 12 hours last Saturday, we’re beginning to think we’ve had enough.

However, although a wet autumn happens now and then we know dry years are more common. We’ve enjoyed the respite from irrigation but it hasn’t stopped the work that’s going on further irrigation development which we know will be needed to insure against the worst effects of the next drought.

In light of this the government’s water policy package,  announced by Environment Minister Nick Smith and Agriculture Minister David Carter is very welcome.

It includes:

• A National Policy Statement on fresh water management to set a consistent, nationwide regulatory framework for setting water quantity and quality limits to govern the allocation and use of freshwater
• An Irrigation Acceleration Fund of $35 million over five years to support the development of irrigation infrastructure proposals to the ‘investment-ready’ prospectus stage which could unlock the economic growth potential of our primary sectors through the development of more efficient and effective water infrastructure, such as storage and distribution
• A Fresh Start for Fresh Water Clean Up Fund to assist councils with historic pollution problems with reprioritised funding of $15 million over two years, and a total clean-up programme commitment of $264.8 million
• The Government will also consider in a future Budget investing up to $400 million of equity in water infrastructure schemes.

Federated Farmers says the water policy, including storage, will cement New Zealand as the ‘lucky country’.

“This Government is serious about playing to New Zealand’s natural competitive advantage and that’s agriculture,” says Lachlan McKenzie, Federated Farmers co-spokesperson on water.

While Australia digs themselves up, we’re hard at work to convert our rainfall into renewable and sustainable food and fibre exports.  Water is behind everything we export and these exports directly pay for policing, doctors, nurses and teachers. 

“The $35 million investment in the Irrigation Acceleration Fund over five years shows how a modest investment in agriculture will yield long term results. 

“The Opuha Study showed that for every dollar invested in water storage, eight dollars was generated through the economy.  If you take that and add it to today’s announcement and future plans, you are talking about a multi-billion dollar uplift.

“The $35 million for the Irrigation Acceleration Fund is easily as significant for New Zealand’s economic development as the Government’s $40 million underwrite of the New Zealand Venture Investment Fund last August.  Except every dollar invested in agriculture goes a long, long way.

“It’s also a major vindication for Federated Farmers pushing water storage well before the Prime Minister’s 2009 jobs summit.  What we are talking about is a boost for jobs and a boost for the regional and national economy.

“The 2007/08 El Nino influenced drought cost the economy $2.8 billion and is now seen as the probable cause of the last recession.  Water storage provides a way to smooth out periods of low rainfall because what we are talking about, is storing from what naturally falls from the sky.

“But we are excited to see the Government openly talking about a potential $400 million worth of equity for the construction of regional-scale schemes that will encourage third-party capital investment.

“This is the first time in years we have seen Government grasp the enormous opportunity to future proof not just our agricultural industries but our towns and cities as well. 

“It’s significant because Government is willing to get off the side-lines given it’s an ideal form of a private-public partnership,” Mr McKenzie concluded.

Feds chief executive Conor English issued a statement earlier on the importance of water storage :

Water storage will enable “more fish and less drought” and build resilience into our economy and environment. In the city you don’t have to wait for the rain to fall before you have a cup of tea. In the city, we have access to water at the right place at the right time. In the city we store water, we bank it, we save it on a rainy day so we can use it when it isn’t raining. So why not do more of the same in the country?

It’s not that New Zealand is running out of water, it’s that water is running out of New Zealand.

The Greeks, Romans and Egyptians built their civilisations on water. We know from the Opua dam that the environment, recreational values, the economy and community spirit are all enhanced by using smart water storage strategies. I’ve yet to meet a fish that doesn’t like water 365 days a year.

Government studies of that project tell us that every 1000ha irrigated creates 27 jobs and injects $7.7 million into the local economy. With 30 potential projects covering around 1 million Ha up the eastern seaboard that’s about $7.5 billion extra revenue for the country each year, and 27,000 new jobs. Over a decade that’s $75 billion extra cash for the country, if all potential projects came to 100% fruition, which is unlikely however.

Irrigation has made a significant difference to the economic and social life in North Otago. Strict requirements for environmental farm plans, which are independently audited each year, help ensure that this doesn’t come at the cost of the environment.


Farmers aren’t creaming it

February 22, 2011

It’s not difficult to find out the prices farmers receive for their produce. Unless they sell by private sale the price paid for milk, stock and crops is public information.

What those who criticise us of creaming it when prices are higher overlook is that the price is an indication of gross income only and takes no account of the costs of production and other necessary expenditure.

Many also forget that the price of dairy products or meat in the supermarket aren’t a very good indication of the returns to producers.

“The current high milk prices has many thinking that farmers must be creaming it but we’re not,” says Lachlan McKenzie, Federated Farmers Dairy chairperson.

“If you look at a litre of milk, the farmer’s share expressed as revenue, is about 300 mils.

“Most dairy farmers, myself included, got less than $0.60 for a litre of milk last season. From these 60 cents, we had to pay all the costs of production including, wages, vets, tax as well as paying the mortgage.

“A small number of dairy farmers are paid more for producing “winter milk”. There are a lot of extra costs running a dairy farm through winter but even they get only a small premium on a per litre equivalent.

“So if someone’s making a mint from milk, I’d suggest looking a lot closer at retail margins.

Fonterra’s decision to freeze the price of milk came as a surprise to farmers. I suspect it’s a PR exercise because the damage to the brand of ever rising prices was deemed to be greater than the cost of keeping it down.

The Visible Hand in Economics sounds a note of caution about this move:

Now if that is what they want to do, I’m sure they have good reason.  However, lets all remember one thing:  if Fonterra decides to sell milk in NZ more cheaply than it does overseas it is taking a litre of milk that would have been more highly valued by a non-New Zealander and giving it to a New Zealander.

 That transfers funds from the co-operative – and the farmers who own it – to domestic consumers. That’s okay if it’s done for commercial reasons but what happens when the freeze comes off?

Supermarkets have followed Fonterra’s lead by announcing they won’t raise prices anymore this year but they have the opportunity to offset the impact of that by increasing their mark up on something else.

This hasn’t stopped calls for price controls which Agriculture Minister David Carter, has sensibly resisted.

David Carter says he will not be advocating the subsidising of dairy products, because there is no reason to artificially establish pricing for any of the country’s export products.

Mr Carter says high international prices for export products are good and the benefits will ultimately flow through to all consumers.

High prices for dairy products is keeping the New Zealand dollar high. If it was lower it would increase the cost of imports including fuel, food and medicine and there’d be complaints about that too.

The problem isn’t the high price of the food we produce it’s low incomes and that won’t be solved by sabotaging the exports which are the key to economic recovery.


Bank the gains, budget conservatively

February 4, 2011

When was the last time prices for lamb, wool, beef, milk and grain were all reasonable at the same time?

I can’t remember.

In the last decade or two if returns for one product was up the rest were usually down.

But this year, in spite of the high dollar, all commodities are receiving better prices.

Even Federated Farmers , is chirpy:

While appreciating commodity prices will be positive for the New Zealand economy, it is only part of the cost equation for goods for all farmers, whether you’re producing cheese or lamb.

“Global commodity prices are up. Whole Milk Powder (WMP) prices have doubled in the last 12 months, and butter is at 20 year highs because of constrained supply,” says Lachlan McKenzie, Federated Farmers Dairy chairperson.

“Wool and meat are also showing positive signs and the positive economic contribution of agriculture is benefiting every New Zealander, every day.

“These are sustainable prices because food is the new black. About 70 million people join the human race each year as the global population heads towards 6.9 billion.

“We are seeing strong price signals from the ANZ Commodity Price Index and from Fonterra’s GlobalDairyTrade auction yesterday.  Food is no longer a plentiful low cost good but is now starting to reflect the real cost of production and its scarcity.

Feds is warning there could be volatility ahead and advises farmers to bank the gains and budget conservatively.

If the grapevine in our area can be taken seriously, that is what most are doing. Memories of the crash from peak prices in 2006 are too fresh for anyone sensible to think what comes up can’t go down.

McKenzie also points out that higher prices are only part of the story.

“Farmers don’t get the retail shelf price. We have to meet the full cost of production and input costs are up. Last year dairy famers had on average only 70 cents profit out of the $6.10 milk price left over for debt, taxes and in dividends.

“It’s the compliance costs we have the least control over.  In the past year we’ve had increases in local authority rates, ACC levies and particularly the impact of the Emissions Trading Scheme (ETS) on fuel and electricity.

“Dairy farmers in particular have greater environmental expectations upon them and we have to be in the black to be green,” Mr McKenzie concluded.

Many of those costs are fixed ones which we face regardless of whether prices for our produce are going up or down. We must make hay while the financial sun is shining and this time it isn’t just food that is receiving better prices, fibre is too.

We got $4.80 a kilo for crossbred lambs’ wool last week, sold some more this week and received an extra 20 cents.

My farmer thinks it’s at least 20 years since wool was earning that sort of money.

That’s a very welcome turn around from the last few years when we were lucky if the price paid for wool did anything more than cover the cost of shearing it.

Timber too is finally worth more than the cost of felling the trees.

We’ve got a plantation of pines planted about 30 years ago. Any time we’ve looked at selling the timber in recent years we’ve been told the only market would be fire wood. But now the price has gone up we’re cutting them down, cover the costs of that and replanting and still have a bit left over.

As an investment over 30 years the return wouldn’t be particularly good, but the trees were planted on a steep hillside which wouldn’t have been good for much else anyway.


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