Rural round-up

March 16, 2019

Scholar keen to bridge urban-rural divide – Sally Rae:

Emma Subtil sees the opportunities in the primary industries as “endless”.

And when she completes her masters degree in agribusiness at Lincoln University, she would love a job that helped improve relationships between people living in urban and rural areas.

`If I could get a job in that, I’d be a happy girl,” she said yesterday.

Miss Subtil (21) was recently awarded a $1500 World Congress Charitable Trust Scholarship through New Zealand Young Farmers. . . 

New mountain bike park for Wanaka:

A new mountain bike adventure park is set to open near Wanaka later this year.

The park – called Bike Glendhu – will eventually encompass 50km of awe-inspiring trails at Glendhu Bay, a 13-minute drive from Wanaka’s CBD. Located on one of New Zealand’s most picturesque farms at Glendhu Station, the eco-conscious park is designed for riders of all ages and intends to be a natural and positive shared space for the Wanaka community.

Local resident and keen rider John Wilson has joined forces with Glendhu Station owners John and Emily McRae to create the park, set to open to the public in spring 2019. . . 

CGT valuations would pile on costs, benefit no-one:

Valuing every single business, farm, rental property or family bach to comply with a Capital Gains Tax regime would impose billions of dollars of costs on New Zealanders while benefiting no-one apart from valuers, Leader of the Opposition Simon Bridges says.

“The Tax Working Group recommends small businesses, rental properties, family baches and farms be subject to a Capital Gains Tax (CGT) on all gains made after April 2021. As a result, eligible assets without an up to date market value would need a new valuation.

“Valuations don’t come cheap, especially for business owners who want a value robust enough to stand up in court if challenged by the IRD. If every small and medium-sized business owner in New Zealand had to pay for a new valuation at say $10,000 apiece, the cost to the wider economy would be about $5 billion. . . 

Homes wanted for wild horses mustered from Kaimanawa Ranges:

Homes are urgently being sought for 70 wild horses that are being mustered out of the Kaimanawa Ranges next month. 

The Department of Conservation said the animals needed to be removed from the the Waiouru Military Training Area in the Central North Island to keep the herd of wild horses there at a sustainable level of 300.

DOC operations manager Dave Lumley said this allowed for the horses in the herd to maintain best condition and also protects the fragile ecosystems, unique to the Moawhango Ecological Zone. . . 

 

‘Quality issues’ affect avocado growers in difficult season – Charlotte Cook:

Avocado growers profits have taken a hit due to quality issues among 2018’s smaller crop.

New Zealand Avocado chief executive Jen Scoular said wet weather, early maturity and growers not always following best practice were contributors to the difficult season.

Ms Scoular said the main avocado harvest ran from July to February but things had wrapped up a couple of weeks early this year with yields down.

Ms Scoular said 65-70 percent of all avocados grown in New Zealand were exported overseas, about 80 percent of which to Australia. . . 

Gold (and green) rush is underway:

The gold (and green) kiwifruit rush is underway.

The 2019 kiwifruit harvest has officially kicked off with the first of an estimated industry-wide 150 million trays picked and packed in Gisborne.

New Zealand Kiwifruit Growers Incorporated (NZKGI) Chief Executive Officer Nikki Johnson says Poverty Bay leads the charge because the crop matures more quickly there than the rest of the country. “Over March, orchards in the Bay of Plenty, Northland, Counties-Manukau, Waikato, Hawke’s Bay, the lower North Island and Tasman will follow suit – it’s going to be a bumper crop.” . . 

2019 Waikato Dairy Industry Award winners announced:

The major winners in the 2019 Waikato Dairy Industry Awards are first-time entrants who have wanted to enter the Awards since reading about the national winners in 2012 whilst still living in Wales.

Marc and Nia Jones were announced winners of the region’s Share Farmer of the Year competition at the Waikato Dairy Industry Awards annual awards dinner held at the Sir Don Rowlands Centre at Karapiro last night. The other big winners were Joe Kehely, who became the 2019 Waikato Dairy Manager of the Year, and Matt Dawson, the 2019 Waikato Dairy Trainee of the Year. . . 

2019 Central Plateau Dairy Industry Award winners announced:

A first-time entrant with a passion for dairy farming, the environment and animals has won the 2019 Central Plateau Share Farmer of the Year.

Tom Bridgens was announced the winner of the region’s Share Farmer of the Year competition at the Central Plateau Dairy Industry Awards annual awards dinner held at the Energy Events Centre in Rotorua last night. The other big winners were Laurence Walden, who was named the 2019 Central Plateau Dairy Manager of the Year, and Harry Phipps, the 2019 Central Plateau Dairy Trainee of the Year.

The 22-year old is Contract Milking 300 cows on Rex and Loris Bates’ Tokoroa 80ha property and won $15,480 in prizes and four merit awards. . . 

2019 Bay of Plenty Dairy Industry Awards winners announced:

The major winners in the 2019 Bay of Plenty Dairy Industry Awards, Matt Barr & Genna Maxwell believe one of the strengths of their business lies in being fourth-generation custodians of a family legacy, with opportunities for diversification.

The couple were announced winners of the region’s Share Farmer of the Year competition at the Bay of Plenty Dairy Industry Awards annual awards dinner held at the TECT The Action Centre Pongakawa last night. The other big winners were Janamjot Singh Ghuman, who was named the 2019 Bay of Plenty Dairy Manager of the Year, and Alex Sainty, the 2019 Bay of Plenty Dairy Trainee of the Year.

Matt and Genna, are Lease Farmers for Viv Barr, on her 110ha, 410-cow Awakeri property. “Viv is an actively supportive land owner,” they say. . . 

2019 Auckland/Hauraki Dairy Industry Awards winners announced:

The 2019 Auckland/Hauraki Dairy Industry Awards Share Farmer of the Year winners have found success through effective team work, increasing their skills and knowledge, and challenging themselves.

Ethan and Sarah Koch were named the 2019 Auckland/Hauraki Share Farmers of the Year at the region’s annual awards dinner held at the Karaka Pavilion last night and won $12,900 in prizes and five merit awards. The other major winners were the 2019 Auckland/Hauraki Dairy Manager of the Year Kyle Brennan, and the 2019 Auckland/Hauraki Dairy Trainee of the Year, Rebecca Casidy.

Ethan and Sarah (both aged 28), have backgrounds in building and teaching, and were runners-up in the same category in 2018. . . 


Landcorp wants more taxes

December 3, 2018

State farmer Landcorp wants more taxes:

Conflict has emerged over Government-owned companies being able to influence Government-led inquiries. 

State-owned Landcorp New Zealand, which owns and operates a large number of farms, is facing criticism for welcoming environmental taxes on the sector.

Andrew Hoggard of Federated Farmers says he feels Landcorp are “trying to push themselves out to be a bit holier than thou” and are “throwing other farmers under the bus quite frankly”. 

Pāmu is Landcorp’s brand name and it has made a submission to the Government’s Tax Working Group saying it’s not opposed in principle to a well-designed capital gains tax, a levy on fertiliser products containing nitrogen and a price on water usage.

It’s all very well for the state farmer to advocate for more taxes when it doesn’t have to operate as other businesses do, needing to make a profit to survive.

Federated Farmers says many reject these new taxes.

“There’s already a lot of regulations from regional councils focusing around a lot of these issues, managing it that way. Coming in with taxes is sort of like just doubling up,” Mr Hoggard said.

National’s Agriculture spokesman Nathan Guy says rural communities will oppose new taxes on farmers.

“This will go down like a cup of cold sick in rural communities that the Government’s farmer is out there proposing more taxes on hardworking farmers of New Zealand,” he said. . . 

Landcorp’s advocacy for taxes on fertiliser, water and capital gains will add to the already negative view most farmers have of the company.

It has the might of the state behind it yet makes a very poor return on capital, when it makes a profit at all.

Improved technology, including fertigation and chemigation – applying what’s needed, where it’s needed, when it’s needed through centre pivots – will do far more for the environment than more taxes.

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Simple taxes better

May 2, 2018

Federated Farmers is urging the Tax Working Group to keep taxes simple:

New Zealand enjoys a relatively neutral, non-distortionary tax system, with low compliance costs by international standards. Any changes should retain these hallmarks, Federated Farmers says.

I’ve said it many times but it needs to be repeated: simple taxes are better taxes.

Making it relatively easy to comply reduces the burden on both the Inland Revenue Department and taxpayers.

Simple taxes also reduce loop holes.

The Federation’s submission to the Tax Working Group, which was guided by 1,400 responses to a survey of its members, also argues money raised by any new taxes should be offset by reductions in other taxes.

Survey respondents strongly rejected some of the tax options that have been mooted: 81% opposed a capital gains tax (CGT) excluding the family home; 91% rejected a land tax and 82% opposed any form of environmental taxation.

Feds Economics and Commerce spokesperson Andrew Hoggard says it seems many proponents of a CGT hope it will crack down on property speculators.

A CGT hasn’t stopped runaway property price inflation in other countries.

“But that could be substantially achieved by an extension of the ‘bright-line test’ on sales to five years, making the need for a CGT largely redundant.

“The Federation didn’t oppose the two-year ‘bright-line’ when it was introduced, and our tax survey last month showed 47% supported this measure, with five years the most favoured period,” Andrew says.

A CGT would also have complications in terms of portfolio investment (PIE) rules, Livestock Herd Scheme gains and losses, farmhouse use changes and indexing the asset cost base so the inflation component is not taxed.

“There’s a lot to be said for the KISS (keep it simple…) principle and a CGT tramples all over that.”

A land tax would be “punitive and inequitable” on farmers, given the size of their properties. If it was introduced, highly geared enterprises could become equity negative, with potential flow-on effects to banks and financiers, Andrew says.

“What’s more developing businesses, or those with fluctuations in income typical of many farms, may not have sufficient cash flow in any one year to pay a land tax. Gross revenue can vary hugely for farmers due to the vagaries of international markets, exchange and interest rates, and the weather.”

It’s not just farmers who would be adversely affected by a land tax. It would add to costs for every business.

That includes service providers like doctors and other health professionals.

At least some of the extra cost would be passed on to consumers, fueling inflation and making life even more difficult for the poor.

As for environmental taxes, Federated Farmers believes there are more appropriate levers, such as regulation and industry-led initiatives, to spur gains.

“Those other levers are more efficient and more easily targeted.

“Taxpayers might decide it is cheaper to simply pay a new tax, particularly if they have limited ability to change/respond, and thus you don’t get the environmental gains we’re all looking for,” Andrew says.

Adding a tax would take away money that could be used for environmental improvements and wouldn’t discriminate between those whose environmental footprint is small and those whose isn’t.

The Federation’s survey showed 66% of farmers believed the current company tax rate of 28% is ‘about right’. There was limited appetite for a 26% rate for small to medium enterprise (SMEs) companies because savings would be relatively insignificant, because not all SMEs are companies, because it would significantly complicate the imputation regime and widening the gap between an SME company tax and the top marginal individual’s tax rate would likely cause even more inappropriate tax planning and avoidance.

Any reduction in tax rate should apply to all businesses.

How would you define a SME – by the number of employees, by income, by profit?

Discriminating by size would complicate the tax system and give some companies an advantage not available to their competitors.

It could also provide a perverse incentive for a business to stay small.

Any tax which incentivises businesses  to spend more time on working out how to organise themselves to minimise the tax they pay than on running their businesses  is a bad tax.

While on the topic of discrimination, I support the Taxpayers’ Union which is advocating for treating Maori Authorities and charitable companies the same as other businesses:

Keeping tax simple should be a major priority for the TWG.

It should aim to make any changes revenue neutral so that any increases in one area are offset by decreases in another too.

It should also take the opportunity to end fiscal drag, or bracket creep, which offsets gains from pay rises by subjecting them to a higher tax rate, by indexing tax threshold adjustments to inflation.

The government has restricted what the TWG can do by telling it what it can’t do.

But it still has the opportunity to make the tax system better by ensuring it’s simple.


Rural round-up

April 26, 2018

Land use tipped to change on Waimea Plains, near Nelson, if dam gets nod – Cherie Sivignon:

Waimea Irrigators Ltd chairman Murray King is putting his money where his mouth is to support the proposed Waimea dam.

The dairy farmer and long-term proponent of the dam project said he had committed to buy more water shares, at $5500 a pop, than he needed for his 57ha block of land on the Waimea Plains.

“We’re fully subscribed, a little bit over actually.”

His “60-something” shares would cost him more than $300,000. . .

Retaining soil carbon the answer to managing agricultural GHG emissions – Gerald Piddock:

A Matamata dairy farm has become ground zero for a team of Waikato scientists searching for ways to lower agriculture’s greenhouse gas emissions.

Soil carbon and nitrous oxide losses are being measured on the 200 hectare farm owned by Terry and Margaret Troughton and managed by their son Ben and wife Sarah.

Their findings so far in a project funded by the New Zealand Agricultural Greenhouse Gas Research Centre were outlined at a field day on the farm.

Better pasture management, genetics, feed and nutrition had been done well, but new strategies were needed to take the project the next step forward, Landcare Research’s Jack Pronger​ said. . . 

Farmers give thumbs down to new taxes:

Any move to introduce a capital gains, land or environment tax will meet stiff opposition from farmers, a Federated Farmers survey shows.

The Federation asked its members for their views last month, to help inform the farmer group’s submission to the Tax Working Group. The nearly 1,400 responses indicated strong opposition to some of the new taxes that have been suggested.

Just on 81 percent opposed a capital gains tax excluding the family home, with 11 percent in support. However, 47 percent would support a CGT on property sold within a five year ‘bright line’ test. There is currently a two-year threshold, and the measure is seen by some as a way of discouraging speculators. . . 

NZ farm sales fall 11% in March quarter as mycoplasma bovis keeps farmers nervous –  Paul McBeth:

(BusinessDesk) – New Zealand farm sales fell 11 percent in the March quarter from a year earlier, as the mycoplasma bovis cattle disease outbreak weighed on purchasing intentions and spanned a period where smaller plots of rural land were captured by the regime to screen foreign buyers.

Some 388 farms were sold at a median price of $27,428 per hectare in the three months ended March 31, down from 438 farms at a median price of $27,509/ha in 2017, Real Estate Institute of New Zealand figures show. Fewer dairy and grazing farms accounted for the drop, with gains in finishing farm sales coinciding with strong prices for beef and lamb meat. . . 

Calm ewes produce more than nervous ewes:

A calm temperament in ewes improves ovulation rate and successful pregnancies, according to a study published by The University of Western Australia.

The study, which was conducted in collaboration with researchers from Uruguay, the Department of Primary Industries and Regional Development WA and UWA, has implications for the impact of stress in human reproduction.

The team investigated the reproductive outcomes of 200 Merino ewes known to have either a calm or a nervous temperament. They found the ovulation rate and rate of successful pregnancies to be higher in the calm ewes. . .

Shearing at the end of the world –  Tomas Munita and Russell Goldman:

Life at the end of the world can be lonely.

For weeks at a time, Roberto Bitsch and gauchos like him might not see another human being. They see horses, both wild and tame. They see the dogs they work with. But mostly, they see sheep — thousands of them.

Locals mark time by the length of the sheep’s woolly coats here on Isla Grande, the largest of the Tierra del Fuego islands at the tip of South America, closer to Antarctica than to Chile’s capital, Santiago. . . 

 


Rural round-up

November 25, 2017

Farmer led project highlights innovative environmental work:

A North Canterbury river awarded as the country’s most improved- is testament to innovative environmental work undertaken by farmers and their community says Federated Farmers.

The Hurunui district’s Pahau River was bestowed supreme winner at last night’s 2017 National River Awards, achieving significant reduction in bacteria E coli levels over the past 10 years.

The river reportedly runs through one of the most densely irrigated catchments in the country. It had also demonstrated decreasing levels in nitrogen and phosphorous. . . 

Alliance Group Doubles Annual Earnings as Meat Prices Recover, Targets Fatter Profitability:

(BusinessDesk) – Alliance Group, the world’s biggest sheepmeat exporter, doubled annual earnings as its sales rose 15 percent with a recovery in global meat prices, but wants to lift profitability further.

Operating earnings rose to $20.2 million in the year ended Sept. 30 from $10.1 million a year earlier, the Invercargill-based company said in a statement. It paid $11.4 million to its 5,000 farmer shareholders, up from $9.8 million, while revenue rose to $1.53 billion from $1.36 billion.

“We are welcoming new shareholders, achieving a stronger balance sheet, improving our profitability and most importantly, offering better livestock pricing for our farmers,” chair Murray Taggart said. “Alliance has a wide range of short, medium and long-term programmes underway as we seek to gain deeper market penetration and capture more value from existing markets.”. . .

Tax Working Group should have an Agri-sector voice:

 

A new Tax Working Group should have primary sector representation says Federated Farmers.

Sir Michael Cullen is to chair the Group from February next year and the Federation recommends that farming and fellow industry stakeholders get a voice.

“Ideally it would be good to have someone on the Group who understands the agri-sector and its tax issues. Given the likely focus on environmental taxation, capital gains and land taxes, it would same a reasonable thing to do,” says Federated Farmers Vice President Andrew Hoggard. . . 

Jersey Benne harvest delayed – Sally Brooker:

While the new potato season is being celebrated in a national campaign, North Otago’s Jersey Benne harvest has hardly begun.

Potatoes New Zealand is promoting the ”humble potato” with television advertising, having showcased varieties, recipes and nutritional facts to food writers and the media at an Auckland event. Potato growers from throughout the country took along samples of their produce being dug this month.

However, a shortage of cauliflower and broccoli has prompted one of North Otago’s biggest growers to delay his potato-digging.

Peter Armstrong, of Armstrong and Co, plants potatoes on several properties in the Totara and Kakanui areas south of Oamaru, where the soil and microclimate result in sought-after Jersey Bennes. . . 

Take alternative protein seriously, analyst warns – Alexa Cook:

The meat industry should not be complacent about the threat of alternative protein food products, a report warns.

The international Rabobank report looks into the success of alternative proteins, including plant-based meat substitutes, insect or algae-based products, and lab-grown meat.

The products were on the verge of becoming mainstream and ‘stealing’ growth from traditional meat product markets, it said.

The report projected that the market for alternative protein would grow 8 percent each year in the European Union, and six percent each year in the US and Canada. . . 

Zespri wins top award for best growth strategy:

Zespri was recognised last night in the 2017 Deloitte Top 200 Awards for its strong growth strategy, with the kiwifruit marketing company on track to more than double global sales to $4.5 billion by 2025.

Zespri Chief Executive Dan Mathieson says the 2degrees Best Growth Strategy award is welcome recognition for the work done across the industry to grow a genuine global sales and marketing organisation and drive demand for Zespri’s premium kiwifruit.

“This award is real testament to the great team we have at Zespri – passionate, dedicated people around the world who bring to life our global grower-to-consumer strategy day in and day out – and the long-term partnerships we have with our customers. . . 

Agritech Programme Focusing on Digital Technologies:

Artificial intelligence, machine learning and smart data are major themes at next year’s MobileTECH 2018. This is one of New Zealand’s largest agritech events and will see technology leaders from throughout the agricultural, horticultural and forestry sectors gather in Rotorua in late March.

The pace of change within the primary sector is continuing to be driven by advances in new digital technologies. While New Zealand has been a world leader in traditional farming systems, it is critical for the sector to maintain and grow productivity through the smart adoption of these new innovations. . . 

You can download the poster here.


Did the Greens make them do it?

July 8, 2011

Trans Tasman explains Labour’s decision to introduce a capital gains tax:

. . . a CGT would almost certainly be one of the Green Party’s coalition requirements. John Key was quick to damn the new policy, saying a CGT would “crush everyday NZers.” But the real criticism lies in the actual mechanics of the tax, which as papers prepared for the Tax Working Group showed could raise if applied across-the-board at 30% to all property, shares, and farms around $3.8bn a year, but only after about 15 years.

Any suggestion the introduction of a 15% CGT, applied only to investment property, would immediately yield $4.5bn a year, roughly the revenue gap to be filled will be laughed off the hustings. While left-wing commentators have hailed the prospect of a CGT as “bold,” and a “circuit-breaker,” others are asking why politicians as astute as Helen Clark and Michael Cullen always kicked the idea of a CGT deep into touch.

Keeping Stock pointed out it’s not just former Labour MPs who didn’t support a CGT.

Did the Greens make them do it? Not directly.

But perhaps Labour is attempting to front-foot the issue rather than risk being seen to give the Greens such a major concession during coalition negotiations should they be in a position to form a government after the election.


Avoiding tax not only preserve of wealthy

January 22, 2010

A drop in the tax rate doesn’t always mean a drop in the tax take.

 Kiwiblog reminds us that in the 1980s when tax rates dropped the tax take increased. I rememberthen- Finance Minister Ruth Richardson showing a graph which illustrated the same thing happened in the early 1990s.

The inverse is also the case. If tax rates go up the tax take may not increase as expected because people find ways to avoid paying.

The Tax Working Groups said:

. . .  an Inland Revenue sample of 100 of the highest wealth individuals in New Zealand, data indicate that only about half are paying the highest marginal tax rate on their income. These taxpayers are not necessarily doing anything wrong but are merely taking advantage of the opportunities offered by the current system to shelter income from higher rates.

Tax evasion is illegal, avoidance isn’t. When the top tax rate increased to 38% and Working for Families was introduced, lawyers and accountants had a field day with clients looking to minimise their tax liability.

It wasn’t just minimising tax, it was minimising their income so they’d qualify for WfF and this isn’t confined to the wealthy.

A friend has a business in which employees often work a lot of over time. When WfF was introduced he found several of his staff didn’t want paid for all the hours they worked because the reduction in what they got from WfF had the effect of giving them a high marginal tax rate and it wasn’t worth their while.

Some wanted to work the extra hours and be paid cash or in kind so that their earnings could escape the notice of the IRD. That is not avoidance, it’s evasion and our friend declined to abet them.

Not everyone will be that honest.

That’s why rises in tax rates, or measures like WfF which have a similar effect, don’t necessarily result in a corresponding increase in the tax take and might even reduce it.

And cuts in the rate may increase the take because people stop trying to avoid taxes and put their efforts into earning more instead.


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