Rural round-up


Groser: TPPA not a gold-plated deal – Patrick Smellie:

New Zealand negotiators expect to conclude a Trans-Pacific Partnership Agreement (TPPA) deal with some improved access for dairy exports to the highly protected markets of North America and Japan but it won’t be a “gold-plated deal”, says Trade Minister Tim Groser.

He acknowledged that comments from Prime Minister John Key on Monday, that whatever deal was achieved would be “at least the very best we can do”, had been interpreted as a sign of a poor deal on dairy in the offing.

But Mr Groser told BusinessDesk that New Zealand negotiators weren’t in “capitulation mode”. . . 

No drought-breaker but ‘darn good help‘:

A farmer in the heart of the North Canterbury drought is welcoming the rain currently falling in parts of the region, describing it as a good morale boost for many farmers.

Vince Daly runs a 160 hectare cropping farm in Cheviot. He said the NIWA weather station on his farm showed the soil moisture level on his farm has gone from 32 percent to 37 percent this week so far. Normally it is at 100 percent at this time of year.

Mr Daly said 43 millimetres of rain had fallen but farmers further inland have, so far, not been so lucky. . . 

Aorere Wins NZ RiverPrize:

NZ Landcare Trust’s Aorere River Project won the inaugural Morgan Foundation NZ Riverprize at the International Riversymposium Gala Dinner in Brisbane last night.

Richard Thompson Chair of NZ Landcare Trust’s Board of Trustees said “What a fantastic result for the Trust and the Aorere community. This is an amazing result given the strength of the competition… it really underlines the value of this project and the work carried out by NZ Landcare Trust.”

NZ Landcare Trust CEO Dr Nick Edgar accepted the award on behalf of the Aorere River Initiative. “I think this is a real victory for community-led grassroots river management in New Zealand. Without the Aorere river community, the story really wouldn’t have happened.” . . 

Rural areas feeling agricultural sector slowdown:

Almost a third of businesses in regions see revenues fall

Three quarters of agricultural businesses expect economy to decline

Businesses in New Zealand’s rural areas are already feeling the effects of a significant slowdown for the agricultural sector, according the latest MYOB Business Monitor survey of over 1000 businesses nationwide, which includes over 200 rural SMEs.

Over the last 12 months, just 18 per cent of rurally-based SME operators have seen their revenue rise, compared to the SME average of 31 per cent. Almost a third (32 per cent) have seen revenue decline in the year to August 2015 (25 per cent SME average). . . 

Fonterra director Farrelly replaces Norris on Fund board – Paul McBeth:

(BusinessDesk) – Fonterra Cooperative Group director Ian Farrelly will replace Ralph Norris as one of the dairy exporter’s representatives on the board of the Fonterra Shareholders’ Fund manager.

Farrelly will join the board of the fund’s manager at the close of its annual meeting on Nov.27 when Norris retires, Fonterra said in a statement. Farrelly has been on the board of Fonterra since 2007, having clocked up a 20-year career in banking including 15 years as head of ASB Bank’s rural division. He operates a 400-hectare calf rearing farm in Te Awamutu and has dairy farm interests in Canterbury and Waikato. . .

Lasers: the transformation to come –  Lynley Hargreaves:

Cather Simpson wants every child and parent in New Zealand to know the word photonics – and to consider photonics science or engineering as a career. An Associate Professor at the University of Auckland and Director of the Photon Factory, she’s worked on problems as diverse as robotic surgery and sorting dairy herd sperm by sex. Now as part of the International Year of Light and Light-based Technologies, Associate Professor Simpson is working to give school children, and the general public, a glimpse of the future of laser manufacturing.  . . 

Official start of new PGP lamb programme:

Primary Industries Minister Nathan Guy has welcomed the official start of a new Primary Growth Partnership (PGP) programme involving premium quality lamb products.

“The ‘Targeting New Wealth with High Health’ PGP programme aims to reach existing and emerging markets with a new class of premium lamb products with improved health qualities,” says Mr Guy.

“This is a collaboration between Alliance Group, Headwaters New Zealand and the Ministry for Primary Industries (MPI). It will help our producers tap further into the increasing demand for premium and healthy foods, and add value to our exports. . . 

Rabobank Agribusiness Monthly (NZ) – September 2015:

Rabobank’s Agribusiness Monthly provides timely information and analysis on agricultural conditions, commodity price updates and commentary on the latest sectoral trends and developments.

Key highlights
Agribusiness Monthly

Dairy – Global commodity prices have shown signs of recovery in recent weeks, as international buyers look for short-term cover, given that prices appear to have reached a floor.

Beef – Steady demand from the US continues to fuel farmgate prices, with record levels reached this September (NZD 6.10/kg cwt). Prices have edged up 33% from last year, supported by seasonal tightening of supplies.

Sheepmeat – Farmgate prices have continued to improve into September 2015, with supply tightening heading into lambing season. . . 

Businesses like party but not all policies


The latest MYOB Business Monitor special report show considerably more business people favour National than the total of all other parties but they’re less enthusiastic about some policies:

The survey of the policy and voting preferences of over 1000 business owners from around the country found that, if the election was held today, 62% of business owners would vote National, 10% Labour and 3% Act, 2% for the Greens and 1% for the Maori Party, with 21% undecided.

Support for the Government is slightly higher among female business owners (63%), and the owners of larger and more established businesses, although the ACT Party enjoys considerable favour with the owners of medium sized businesses (20 – 199 employees), garnering 8% of the vote with this group. Labour found the strongest support among younger business owners, aged between 18 – 39 years, with 17% likely to vote for the party, 54% for National and 3% for the Maori Party – although a larger number of young business voters are undecided, at 24%.

Support for National is slightly weaker in Wellington (57%) and support for Labour slightly stronger (13%) compared with other areas in New Zealand.

The Government is most popular with business owners in the finance and insurance sector (75% National, 4% Labour, 10% Act) and the Agriculture sector (71% National, 8% Labour, 3% Maori), while Labour enjoys the most favour with business voters in the retail and hospitality sector (17% Labour, 62% National, 4% Greens) and the transport industry (11% Labour, 58% National, 2% Greens).

What on earth has Labour done to get 8% support from agricultural businesses and why would anyone in the transport industry vote Green?

The 17% support for Labour in retail and hospitality also astounds me. They generally have low margins and should have benefitted from policies which make it easier to employ staff.

MYOB general manager Julian Smith says, based on the performance of all parties over the last six months, businesses are firmly in favour of the Government being returned at the next election.

“National is the clear choice for Kiwi business, according to this survey, which looks both at policy and party preferences of New Zealand business owners,” says Julian Smith.

“However, several of the key policies likely to be in contention in the next election, may well see National lose some votes.”

The survey found 44% of business owners would vote against state asset sales, while only 27% would vote for the policy.

That surprises me too – you’d think people who ran their own businesses would appreciate the need to reduce debt and the added accountability there would be at governance level if some assets were partially floated.

Julian Smith says what businesses are looking for – from any party – is a way to cut red tape and the cost of compliance.

“The number one policy that would win support of Kiwi business owners is the simplification of provisional tax rules and processes to make it easier for businesses to meet tax obligations, which 76% would vote for,” says Julian Smith.

Other policies popular with business owners are additional tax cuts, which 63% would vote for, Government-sponsored initiatives to reward innovation and success (61% support) and the creation of a single flat personal and company tax (53% support).

“Interestingly, businesses are also focused on policies that would benefit their employees and the broader community,” says Julian Smith.

Removing GST from selected essential goods and services, such as fresh food and doctors’ visits, would be supported by 57% of the business community, with just 23% voting against. Business owners also supported Mondayising public holidays (45% vote for, 22% against), and the introduction of compulsory Kiwisaver, provided at least 50% are invested in New Zealand (41% vote for, 25% against).

How can they reconcile the desire for less red tape, lower compliance costs and simplified tax with the wish to complicate GST?

How do they think they could get more tax cuts and a single flat personal and company tax as well as a reduction in GST?

It’s often assumed that all business people support the National Party. Unfortunately in my – admittedly biased – opinion, as this survey shows they don’t.

I didn’t expect unanimous support for National and all its policies but I am surprised about the apparent confusion over policies. I’d have thought business people would have a better understanding of economics than the results indicate.

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