Rural round-up

December 6, 2018

Dairy product prices climb as whole milk powder gains – Margaret Dietz:

(BusinessDesk) – Dairy product prices rose at the Global Dairy Trade auction, stemming a decline that began in May.

The GDT price index gained 2.2 percent from the previous auction two weeks ago. The average price was a US$2,819 a tonne, compared with US$2,727 a tonne two weeks ago. Some 36,450 tonnes of product was sold, down from 42,966 tonnes two weeks ago.

Whole milk powder climbed 2.5 percent to US$2,667 a tonne. . . 

Dairy bosses are best employers:

In the first-ever Primary Industries Good Employer Awards dairy farmers Ben and Nicky Allomes won the top accolade, the Minister of Agriculture’s Award for Best Primary Sector Employers.

Woodville dairy farmers Ben and Nicky Allomes have been named the Best Primary Sector Employers. 

The couple, who own Hopelands Dairies, also won the Innovative Employment Practices award. . . 

Fonterra reaches provisional deal with Beingmate:

Fonterra Cooperative Group has reached a provisional deal with Chinese partner Beingmate Baby & Child Food to unwind their Darnum joint venture in Australia.

The joint venture – 51 percent owned by Beingmate and 49 percent Fonterra – produced infant formula products at the Darnum plant in Australia for Beingmate’s Chinese customers, and was a key component of Fonterra’s plan to expand its reach into China’s second and third-tier cities. . . 

Voting for the 2nd Fonterra Directors’ Election is underway:

Voting is now open for the 2018 Fonterra Board of Directors’ Second Election.

Only two candidates from the first election, Leonie Guiney and Peter McBride, obtained more than 50% support from voting shareholders. The Rules of the first election state that if not enough candidates obtain more than 50% support, there must be a second election. . . 

Dairy loan done on a handshake, details to follow:

It beggars belief that the Government has dispensed a $9.9 million low-interest loan to a dairy company without having finalised the terms, National’s Economic and Regional Development spokesperson Paul Goldsmith says.

“The Minister in charge of the Provincial Growth Fund couldn’t tell the House what terms he had in mind when he undercut commercial lenders to provide debt funding for a new processing plant.

“I wouldn’t blame any business like Westland Milk for accepting a cheap loan from a secure lender. . . 

Apple producer’s underlying profit looks to be at top end:

Apple producer Scales has had a bumper year with a record export crop lifting profits to the top end of guidance.

The company’s underlying profit was likely to be at the top end, or slightly exceed, the current guidance range of $58 million to $65m, in the year ending December.

Managing director Andy Borland said it was an excellent performance for the group, with all business units performing well over the year. . . 

New Landcorp chair appointed:

Dr Warren Parker has been appointed as Director and Chair of Landcorp, the Minister of Finance Grant Robertson and Associate Minister of State-Owned Enterprises Shane Jones announced today.

Dr Parker is a former Chief Executive of Scion (the NZ Forest Research Institute) and Landcare Research, and was previously Chief Operating Officer of AgResearch. He currently holds a number of board roles including on Predator Free 2050 Ltd, Farmlands Cooperative Society, Genomics Aotearoa and is the Chair of the Forestry Ministerial Advisory Group. Until recently he was Chair of the New Zealand Conservation Authority. . . 

Landcorp out of touch with real farmers:

Landcorp’s submission to Sir Michael Cullen’s Tax Working Group (TWG) is a kick in the guts to rural communities, National’s Nathan Guy and David Carter say.

“Landcorp’s sneaky submission to the TWG proposing a water tax, nitrogen fertiliser tax and not opposing a capital gains tax proves how out of touch the state-owned company is with farmers on the ground,” Mr Guy says.

“With 6700 other submissions, why was Landcorp pressured to put in a submission that was more than a month late? The reality seems to be that the TWG are hell-bent on introducing environmental taxes and a capital gains tax, so they leaned on Landcorp to submit supporting more taxes and levies. . . 

New president and vice president elected to HortNZ board:

The Horticulture New Zealand board elected Barry O’Neil as its new President and Chairman at a meeting today. Mr O’Neil replaces Julian Raine, who has been President and Chairman for six years and who has made a significant contribution to horticulture for New Zealand. Mr Raine has stood down to pursue other business interests.

Bernadine Guilleux was elected Vice-President, with both positions effective from 1 January 2019. . . 

Busy orchardist advises small businesses start payday filing:

A Hawke’s Bay orchardist is advising fellow small businesses to be ahead of the game on payday filing.

This is the mandatory requirement from April next year for employers to file their payroll information to Inland Revenue every time they pay their staff.

Te Mata Figs owner Helen Walker has been paying her five staff fortnightly and sending across their details using the online entry method in myIR. . . 


Rural round-up

December 4, 2018

Superstar spotlights dairy efforts – Luke Chivers:

DairyNZ Environmental Leaders Forum chairwoman Tracy Brown has won a Sustainable Business Network award. She spoke to Luke Chivers about some of the challenges facing the rural sector.

Waikato dairy farmer Tracy Brown has been named a dairy sustainability champion for inspiring farmers to change on-farm practices, protect waterways, enhance biodiversity and lower their environmental footprints.

She was rewarded for her efforts by winning the Sustainability Superstar category at the NZI Sustainable Business Network Awards.

The award marks a momentous occasion for New Zealand’s primary industries, Brown says. . . 

Town folks love a good farm story – Pam Tipa:

‘A good story’ was a key motivator for fourth-generation Helensville farmers Scott and Sue Narbey to open their farm to the public.

The couple opened their farm as part of Fonterra’s Open Gates 2018 day.

“We entered the Ballance Farm Environment Awards and when we started writing down all the good things we were doing we thought we were doing a pretty good job,” Scott told Dairy News.

“And we were sick of hearing all the bad things and how people perceive dairy farms. . . 

A hand up or corporate welfare? – Andrea Fox:

Westland Milk Products, approved for a taxpayer-funded Provincial Growth Fund loan branded “corporate welfare” by some critics, says it would have been happy for the commercial terms to be disclosed but Government officials ruled them confidential.

The Westland dairy exporter, which in its 2018 annual report discussing a capital restructure said it had “relatively high debt and limited financial flexibility”, is to get a $9.9 million interest-bearing, repayable loan towards a $22 million manufacturing plant project to produce higher-value goods.

The annual report noted Westland’s cash flow for the year was below expectations, its milk payout to farmers was not competitive and “obtaining new capital would make a significant difference to the co-operative”. . . 

People need to be told ‘what wool is about’ – Sally Rae:

Education is the key to lifting the state of the wool industry, industry leader Craig Smith says.

Mr Smith, general manager for Devold Wool Direct, is a member of the Wool Working Group, which has been working on how to create a more sustainable and profitable sector.

Made up of 20 wool producers, processors and other industry representatives, it has been charged with developing a pan-sector action plan.

Earlier this year, Mr Smith was  the first New Zealander to be appointed to the global executive committee of the International Wool Textile Organisation, and he is also heavily involved with Campaign for Wool. . . 

Hill country’s development risks and opportunities:

Sheep and beef farmers are increasingly finishing stock on hill country forage crops and pastures, with a resultant drop in erosion risk.

But some farmers had difficulty assessing the potential environmental impact and the financial return of hill country development, due to the unpredictability of sediment loss and the costs.

This was discovered by studies done as part of the Sustainable Hill Farming Tool project (SHiFT), says Paul Hulse, of Environment Canterbury (ECan).

The SHiFT project is to tell landowners the best ways to address these concerns, says Hulse . .

Smartphone cattle weighing technology set to expand – Lucy Kinbacher:

A HUNGARIAN developed smartphone accessory is helping producers weigh their cattle without the use of any scales or yard infrastructure. 

Known as Beefie, the new technology allows producers to calculate their cattle weights in less than half a minute by attaching an external device to an Android 5.1+ smartphone and capturing a range of photographs.

Livestock are analysed from two to six metres away, even whilst in motion or partially obscured, with more than 5000 tests on animals producing a 95 per cent accuracy rate.  . . 

 


We lose if WTO not taken seriously

November 28, 2018

Could the Provincial Growth Fund threaten New Zealand’s free trade credentials?

Regional Economic Development Minister Shane Jones today confirmed that some Provincial Growth Fund expenditure may qualify as agricultural subsidies, meaning it would need to be reported to the World Trade Organisation, says ACT Leader David Seymour.

“Jones said he had sought advice from MFAT about the legitimacy of his spending. This would be the first time New Zealand has reported such subsidies to the WTO in 25 years.

“It would be incredibly embarrassing if the Government had to report this expenditure, especially given David Parker travelled to Europe in January seeking to limit the agricultural subsidies of other countries, and Jacinda Ardern’s recent trumpeting of free trade.

“Subsidies for agricultural products are tightly restricted under WTO rules and for good reason. They stand in the way of free and mutually-beneficial trade; they create inefficient domestic industries by coddling producers; and, they represent wasteful spending and require higher taxes to support them.

“The Fourth Labour Government scrapped all of New Zealand’s agricultural subsidies in the 1980s, resulting in more productive, profitable and innovative producers.

“In his typical, blustering fashion Jones said he had no intention of complying with the international trade body’s rules.

“NZ First has always harboured a deep desire to return us to the Fortress New Zealand of the 1970s.

“If Shane Jones is determined to continue making such payments, he’ll be sullying New Zealand’s international reputation as a free and open trading nation.

This exchange in question time yesterday doesn’t give any confidence that Jones is taking WTO requirements seriously:

David Seymour: Has the Minister had advice in any form that some of his provincial growth fund expenditure may have to be reported to the World Trade Organization as it qualifies as agricultural subsidies—the first time New Zealand would have reported such subsidies in 25 years?

Hon SHANE JONES: Yes. Naturally, advice has been sought from the foreign affairs department. However, given that the adjudication and the appeals of so-said international trade body are in a state of disarray, I’m not bothered by that at all.

Part of the pain of the ag-sag of the 80s was due to the axing of subsidies but I don’t know of any farmers who would want to go back to the bad old days when they were at the mercy of politicians and bureaucrats, focused on producing more rather than what markets wanted.

Free trade has made New Zealand stronger and protection from the WTO has helped when other countries have tried to use non-tariff barriers and other anti-trade measures against us.

As a small nation heavily dependent on trade, we need the WTO and the minister’s cavalier attitude to it and our reputation for free trade is yet another reason to question the PGF.

 


Taxpayer paying business to compete with other business

November 16, 2018

An advanced Aviation Hub at Whanganui Airport is the latest beneficiary of taxpayer largesse through a donation from the Provincial Growth Fund.

The Taxpayers’ Union says the government is picking winners:

The Government should be delivering tax cuts to all businesses, not spending $48 million picking winners says the New Zealand Taxpayers’ Union, responding to the Government’s announcement of Provincial Growth Fund spending in the region.

The Union’s Executive Director Jordan Williams says “Government should not be in the business of picking winners. Instead of spending $48 million on an array of projects in Manawatu-Whanganui, the Government should give all businesses tax relief.”

“If the business case for projects receiving funding from the Government stands up, they should be able to secure private finance. Taxpayers should not be forced to subsidise businesses that cannot stand on their own two legs. Taxing more for Shane Jones to play Father Christmas is just a provincial merry-go-round.”

It’s worse than picking winners – it’s using taxpayers’ money to fund a business that is competing with another existing one.

An international flight school started operating at Oamaru airport a few months ago.

. . .Students from ”all over” would train in single-engine Tecnam aircraft, with one plane for every five students.

Waitaki Mayor Gary Kircher said he was ”very pleased” the airline academy chose the Waitaki district ”to kick-start their operation”.

”As there’ll be a significant number of trainees and staff living and learning here, this is a win-win for everyone.”

Ten jobs would be created and up to 50 commercial pilot trainees would be in the Waitaki district over the next three years.

Council chief executive Fergus Power said each trainee would add an estimated $20,000 to Oamaru’s economy while living in the district for up to a year. . .

If a flight school can be established at Oamaru Airport without subsidies the Whanganui one shouldn’t need government assistance and it certainly shouldn’t be getting taxpayers’ money to compete with an existing business.

 

 


Government’s don’t have magic money tree

September 10, 2018

The Taxpayers’ Union correctly points out that doling out public money will destroy jobs not create them:

Shane Jones’ spending in Kawakawa will destroy jobs, not create them, says the New Zealand Taxpayers’ Union.

Taxpayers’ Union spokesman Louis Houlbrooke says, “Taxpayers might think that $2.4 million for three jobs is a bad deal. Actually, it’s far worse than that. Taking this much money out of the private sector destroys jobs. It’s $2.4 million fewer dollars that taxpayers could have spent in their communities.”

That’s money that individuals could have used to create, expand or support businesses; provide for their futures, give to charity or simply choose to spend as they wished.

“What’s most terrifying about the Provincial Growth Fund is that, so far, Shane Jones has only spent four percent of his $3 billion. There is so much more spending to come that the public risks becoming desensitised to Shane Jones’ flagrant waste, when we should be outraged.”

“It looks like Shane Jones actually has far more money in the Provincial Growth Fund than he knows what to do with. In that case, he needs to simply give the money back.”

Councils and businesses in the provinces are doing their best to come up with ideas to get their share of this money and they can’t be blamed for that.

If money is being given away, why wouldn’t they try to get some for their pet projects?

But government’s don’t have a magic money tree. Every dollar a government spends comes from taxpayers.

The $2.4 million being splurged on the Kawakawa cultural centre in Northland will create just three jobs.

It could have been spent on health, education, crime prevention, infrastructure or any number of other ways that would give better value for money and a better return on investment.

It could also have been left in the pay packets of the people who earned it.


Post-election horse trading costs another $30m

August 24, 2018

Jo Moir has uncovered another $30 million we’re paying for Winston’s dowry:

New Zealand First’s loyalty to the racing industry has galloped beyond tax breaks for good-looking race horses to include several all-weather race tracks for the industry.

Racing Minister Winston Peters secured a tax change in the Budget this year to allow new investors to claim deductions for the cost of horses based on the “virtue of its bloodlines, looks and racing potential”.

It’s now been revealed $30 million of contingency funding in the Provincial Growth Fund has been earmarked for the coalition government pet projects and the racing industry is set to benefit. . . 

National’s economic development spokesman Paul Goldsmith said his party supports the racing industry but the lines are blurred when a project gets the green light simply because a coalition partner likes the sound of it.

“They should be able to make their case clear, and open and rigourous, and if it stacks up, it stacks up.

“The problem that we’ve got here is that the whole system is opaque and murky so it’s hard to disentangle the arguments, and in that area they’re not even making an argument, they’re just saying we’re going to do it,” Mr Goldsmith said.

Mr Goldsmith described the provincial growth fund criteria as being “as loose and as billowing as the deep blue sea”.

“Well what we’ve seen is that it’s an all-purpose political slush fund and you can fit anything into it,” he said. . . 

The Taxpayers’ Union says this horse barrel politics sets a new low:

. . .“This sets a new low for coalition back room deals, clearly designed to benefit an industry with known links to NZ First, with the tab picked up by hard working taxpayers – most of whom don’t own race horses,” says Jordan Williams, Executive Director of the Taxpayers’ Union.

“I think we could call it the worst of ‘horse-barrel politics’. The barrel is so large even race tracks fit into it.”

“And why are we finding this out only now? Why isn’t Winston’s Dowry open to the public? Was this part of the coalition agreement’s missing five pages? It’s almost as if the Government doesn’t want the public to be able to judge how much it cost to get Mr Peters’ support.”

A friend who has a share in a race horse got a letter before the election asking him to contribute to a donation that had been made to NZ First because, as the advertisement placed by the Hogan’s said, :

To all those eligible to vote – breeders, owners, trainers, jockeys, administrators, punters and the many businesses that are financially supported by the industry – this is an enormous opportunity to support New Zealand First’s initiative to have 100 per cent what we’ve been asking for.  

Post-election horse trading is one of the expensive downsides of MMP.

Pre-election policies and promises to the public come a very distant second to the demands a party holding the balance of power can make during coalition negotiations.

There’s no chance that negotiations will be public but coalition agreements could and should be.

If we’re paying the price of government we have a right to know the cost and to have some light shone on the links between party funders and government policy.


O&G exploration ban greenwash

April 12, 2018

The government’s decision to stop offshore oil and gas exploration is nothing but greenwash.

National Opposition energy and resources spokesman Jonathan Young said the decision had come without any consultation with industry.

“The Government had promised to consult but have now made an abrupt decision to stop any new offshore exploration,” he said. 

New Zealand has only about 10 years supply of gas reserves left, he said.

“So in 10 years time we will be buying imported gas to fire up the barbecue,” he said.

Young said 20 per cent of nationwide electricity generation depended on gas.

“What will replace gas as the demand for more electricity rose with electric vehicles and we don’t have enough renewables.

“It will be coal – good one Government.”

This move will do nothing to reduce the use of oil and gas in New Zealand or elsewhere.

It will just mean importing oil and gas from elsewhere. That will be more expensive and worse for the environment.

New Plymouth mayor Neil Holdom called the decision a “kick in the guts” for the Taranaki economy.

The industry provided directly and indirectly up to 7000 jobs in the region.

“It was a kick in the guts for the long term future of the Taranaki economy and urgent work was needed on a plan to maintain Taranaki’s position as the provincial powerhouse of New Zealand’s economy,” he said. . .

Any gain from the projects which got money from the Provincial Growth Fund last week will be more than cancelled out by the jobs lost in the oil and gas industry and those who service and supply it.

This policy is economic sabotage for no environmental gain from a government long on rhetoric and virtue signaling and very short on reason.

 

 


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