Rural round-up

February 16, 2014

Price fixing doesn’t work Part XVII – Tim Worstall:

Thailand is finding out, in a most painful manner, what happens to those who try to fix prices:

Thailand, once the world’s biggest exporter, is short of funds to help growers under Prime Minister Yingluck Shinawatra’s 2011 program to buy the crop at above-market rates. After the government built record stockpiles big enough to meet about a third of global import demand, exports and prices have dropped, farmers aren’t being paid, and the program is the target of anti-corruption probes. Political unrest may contribute to slower growth in Southeast Asia’s second-largest economy.

In order to curry favour with the rice farmers who compose a substantial part of the electorate prices were fixed and fixed high. The inevitable thus happens, magically more is produced than anyone wants to consume and here at least it is looking like the government will go bust over it. “Produced” is of course a flexible word: there are long running reports of rice being smuggled over the Burmese border to take advantage of those high Thai prices. . . .

NAIT helps clear Northland TB infection:

ONLY ONE bovine tuberculosis (TB) infected herd remains in Northland.

Six other herds have been cleared by TBfree New Zealand. The single, remaining infected herd has recently had a whole herd TB test and is also on the verge of being cleared of the disease. The six other herds were linked by stock movements made before the disease was diagnosed.

TBfree Northland committee chair Neil MacMillan QSM said the cooperation of farmers and landowners in allowing TB testing and wild animal control contractors’ access to their properties to remove the disease was appreciated. . .

Rain and visitors pour into Waimumu – Terry Brosnahan:

It was cold, wet and muddy, but the money still poured in at the Southern Field Days at Waimumu, near Gore, this week.

Persistent rain on the second day of the three-day event didn’t deter farmers from attending and spending.  

Exhibitors spoken to reported strong sales and enquiries. They said farmers and contractors had done their research and were ready to do business rather than just come for a day out.

Field days chairman Mark Dillon said 12,100 people paid to attend the first day and 12,500 the second. Figures for Friday, the final day were not available when Farmers Weekly went to print. In 2012 a record 33,000 people went through the gates of the biennial event. Based on the area filled, a record number of cars were parked. . . .

Biocontrol bugs on show at Waimumu:

THEY’RE CREEPY, they’re crawly, and they’re on display in the Environment Southland marquee at Southern Field Days.

Following on from biocontrol success in several areas, a raft of biocontrol agents including Dung beetles, Broom galls mites, Green thistle beetles; Gorse soft shoot moths and Ragwort plume moths are making an appearance in the council’s tent this year.

Senior biosecurity officer Randall Milne says it’s an opportunity to educate the public about biosecurity and biocontrol agents. . .

Success: farming smarter, not harder

Fifteen years ago Doug Avery was locked into failure.

The Marlborough sheep and beef farmer was barely coping, personally and financially, after years of successive drought had ravaged his farm.

“The severity of eight years of drought, including four one-in-one-hundred-year droughts, was so bad that I recognised the road that I was travelling was completely stuffed,” Avery says.

His 1500ha farm, Bonaveree, overlooking the Dominion Salt facility at Lake Grassmere, has been in the family for nearly 100 years.

But the glorious sunshine and drying nor’westerly winds that create perfect conditions for extracting salt from seawater were destroying the 59-year-old and his farming business.  . .

From white gold to kiwi gold:

Exchanging the dairy farm for kiwifruit vines came down to seeing the golden-sweet potential that was ripe for the picking for Bay of Plenty couple Elaine and Wayne Skiffington.

After 28 years of dairy farming, the couple decided to invest all their efforts into kiwifruit around 12 years ago and have never looked back.

“We saw the potential kiwifruit had to offer and went for it,” Wayne says.

Originally purchasing their 50 hectare property in Pongakawa, in the Western Bay of Plenty 20 years ago for run-off purposes for the dairy farm, it also happened to include a kiwifruit orchard. Not knowing much about kiwifruit but not wanting to get rid of the vines, the couple decided to lease the orchard to Direct Management Services (DMS), while they ran the farm. . .


Rural round-up

December 24, 2013

Proactive approach prevents dog fight – Sheryl Brown:

As a battle about water quality rages between farmers and regional councils throughout New Zealand, a group of farmers in the Lake Rerewhakaaitu catchment have drawn nationwide attention through a proactive approach.

Nestled under Mount Tarawera, Lake Rerewhakaaitu is the southernmost of the 12 Rotorua lakes and is surrounded predominantly by dairy farms.

In 2001 a report by Bay of Plenty Regional Council showed nutrient levels in streams flowing into the lake were increasing.

The report suggested tightening dairy disposal consent conditions and setting a ceiling level of nitrogen fertiliser application. . .

Talley’s to lift Open Country stake to as much as 70.5%:

(BusinessDesk) – Talley’s Group, the privately-held maker of foods ranging from frozen fish to ice cream, agreed to buy up to 14.99 percent of Open Country Dairy from Singapore’s Olam International for as much as $46.5 million.

The deal would lift Talley’s holding of the dairy company to as much as 70.5 percent from 55.5 percent, increasing its control of a business that returned to profit in 2012 while tapping shareholders for funds to repay debt. The sale price is close to the current carrying value of the investment in Olam’s accounts, it said.

Olam’s stake would reduce to as low as 10 percent, leaving it as the second-largest shareholder just ahead of Dairy Investment Fund on 9.99 percent. Talley’s is required to make a partial takeover offer under the terms of the Takeovers Code and its transaction with Olam will be a combination of direct sale of shares and acceptance of the offer, Olam said. . .

Santa delivers farmers the perfect weather present:

While holidaymakers may not be relishing widespread rain over Christmas, it will certainly bring a smile to many farmers one-third of the way into summer.

“The guy in the big red suit is delivering farmers the best present; widespread rain,” says Katie Milne, Federated Farmers Adverse Events Spokesperson.

“Farmers won’t have an excuse to get out on-farm but will instead have to get stuck into wrapping last minute presents. Aside from essential jobs on-farm, a few day’s weather enforced relaxation with family is the best way to recharge the batteries. . .

Scholar slams stubble burning as bad for soil – Tim Cronshaw:

A Nuffield scholar visiting Canterbury, who would never burn crop stubble on his farm, has criticised the worldwide practice.

Arable farmer Tom Sewell, who grows crops on a 400-hectare farm in southeast England, was one of two scholarship holders studying the long-term benefits of no-tillage in New Zealand.

He left for Australia a week ago convinced farmers could avoid stubble burning, banned in his home country.

“There are loads of problems with it. In the UK it would be a [non-runner] in public relations and would be a shot in the foot. The public perception is it’s bad for the environment, creating carbon dioxide and it’s burning a valuable carbon source for the soil and losing organic carbon.” . .

30 animals on offer at NZ’s first annual game sale

The efforts of South Canterbury man Neville Cunningham, to have game animals such as red deer and white tahr recognised as being of value rather than simply termed a pest to be eradicated, came to fruition yesterday when he staged New Zealand’s first annual game animal sale.

The sale, held at his Timaru property, offered 30 animals by tender including a black tahr and a white tahr, chamois, trophy elk bulls, trophy red stags, a highland bull, two bison and arapawa rams.

All the animals have been bred by Mr Cunningham at one of his two properties, at Timaru or Aoraki/Mt Cook and some, such as the white tahr, have come from animals originally recovered from the bush, but now part of a managed breeding programme. . .

Two new farmer directors elected to Beef + Lamb New Zealand Board:

Two new farmer directors will join the Beef + Lamb New Zealand Board after the annual meeting in Feilding on 14 March 2014.

They are Waikaka Valley farmer, Andrew Morrison who will represent the Southern South Island electorate and Wairarapa farmer, George Tatham who will represent the Eastern North Island electorate.

They were both elected unopposed.

They replace Beef + Lamb New Zealand directors who had not sought re-election. . .

Bumper crop boosts NZ apple and pear exports:

The largest crop in nearly 10 years has allowed apple and pear growers to crack the $500 million mark for exports.

The pipfruit industry believes the result has placed it on track to reach its export target of $1 billion by 2022.

Pipfruit New Zealand Incorporated (PNZI) chief executive Alan Pollard said the economic impact of apple and pear exports on regions was “extraordinary”.

“North Island centres such as Hawke’s Bay received $350m in export receipts, up $100m on 2012, and South Island centres such as Nelson have received $150m, $50m more than 2012,” he said. . .

The master has not finished just yet – Hugh Stringleman:

The world’s greatest competition shearer believes he has at least one more successful year left in him.

Five-time world champion David Fagan, 52, wants to add to his tallies of 16 titles each at the Golden Shears and New Zealand Shearing Championships.

At the Te Kuiti-based NZ championships David has reached the open final 28 out of 29 times, and the 30th edition in March will provide the best-possible stage for his last hurrah. . .

How do politicians manage to believe such things? – Tim Worstall:

I’m slightly boggled by this statement:

Tim Farron, South Lakes MP and chair of the all-party parliamentary hill farming group, said: “We need to do all we can to support our farming industry, particularly in the uplands where life can be a real struggle. This support and funding could make a massive difference to upland farmers throughout Cumbria and help show the next generation that there is a real future in a career in farming.”

It appears to me to be an example of cognitive dissonance. For we’re also being told this about that same occupation: . .

Vineyards on sustainable, diverse path:

A rapid rise in exports fuelled New Zealand wine industry growth in the 1990s and the industry recognised it needed a proactive approach to sustainable production.

Considerable research led to a holistic programme that eventually became known as Sustainable Winegrowing New Zealand.

All but 6% of NZ’s producing vineyard area is certified under the Sustainable Winegrowing NZ approach, with a further 3-5% of operating under certified organic programmes.

Members are committed to protecting the unique places that make the country’s famous wines by reducing the use of chemicals, energy, water, and packaging and wherever possible reusing and recycling material and waste. . .


Rural round-up

October 11, 2013

Effluent may be power house for farmers – Collette Devlin:

Effluent – often a headache for Southland dairy farmers – could soon prove beneficial by offsetting electricity bills, recent research shows.

As part of the Southland Energy Strategy, Venture Southland has been working with farm consultants, Scandrett Rural, Niwa, and EECA trialling the capture of methane emissions from covered anaerobic effluent ponds on dairy farms.

The principle behind the project was to demonstrate that methane could be used as an energy source to reduce electricity use on farms and also reduce greenhouse emissions. . .

Jealous Jillaroo – Jackaroo Joins the Largest Drove In Aussie Memory – Jillaroo Jess:

Something very exciting is happening in eastern Australia at the moment. Well, not for me, I’m stuck at home taking care of the farm. Jackaroo has been lucky enough to be involved in the biggest drove in Australian history. A ‘drove’, is moving cattle/sheep from one place to another, feeding them along the way. They can be very long and hard distances travelled. Often, drovers live on the road, going from one job to the next. Cattle baron Tom Brinkworth has taken advantage of the drought and bad cattle prices by buying 18,000 head of cattle from the ages of 8months to 2yrs old. These cattle are being taken down the TSR (Travelling Stock Route), or ‘The Long Paddock’ to their new properties, some 2500km away (over 1500miles). The herd has been split up into 9 mobs, and are travelling 10km a day. There is about 80km/8days between the different mobs of cattle. . .

Let’s smash a cartel today – Tim Worstall:

I’ve pointed out here before that parts of the fertiliser industry seem to be run as a cartel. Now we’ve evidence that much of the fertiliser industry is run as a cartel.

C. Robert Taylor and Diana L. Moss have written “The Fertilizer Oligopoly: The Case for Antitrust Enforcement,” as a monograph for the American Antitrust Institute. Those looking for examples of possibly anticompetitive behavior, whether for classroom examples or for other settings, will find the argument intriguing.

The effect of which is:

Taylor and Moss write: “Damages from supra-competitive pricing of fertilizer likely amount to tens of billions of dollars annually, the direct effects of which are felt by farmers and ranchers. But consumers all over the world suffer indirectly from cartelization of the fertilizer industry through higher food prices, particularly low income and subsistence demographics. … [I]t is clear that corporate and political control of essential plant nutrients may be one of the most severe competition issues facing national economies today.”

Part of the detail of how the cartel works is that it is not allowed to affect domestic US prices (Ho ho). So therefore the richest farmers in the world are not affected: but all of the poor world ones are. . .

New appointments to Biosecurity  Ministerial Advisory Committee :

Primary Industries Minister Nathan Guy has announced five new appointments to the Biosecurity Ministerial Advisory Committee today.

The Committee plays an important role in providing the Minister with independent advice on the performance of New Zealand’s biosecurity system as a whole, and on specific biosecurity issues where necessary.

“Biosecurity is my number one priority, and hugely important to New Zealand as a trading nation,” says Mr Guy.

“A world class biosecurity system protects New Zealand from unwanted pests and diseases. This is essential for working towards our goal of doubling the value of our primary sector exports to $64 billion by 2025. . .

New Zealand’s diversity recognised at International Wine and Spirit Competition:

New Zealand’s diverse wine styles have stolen the show at the prestigious UK-based International Wine and Spirit Competition (IWSC). In the results released today, New Zealand wines beat all international competition to win not only the international Sauvignon Blanc and Pinot Noir Trophies, but the Chardonnay Trophy as well, while Gold Outstanding Medals went to a Gewürztraminer and a dessert Riesling. . .

Ceres Wines wins the coveted IWSC Bouchard Finlayson Pinot Noir Trophy:

Ceres Wines, a tiny artisan wine producer from Bannockburn in Central Otago, has won the coveted International Wine and Spirit Competition (IWSC) Bouchard Finlayson trophy for Pinot Noir. The trophy is awarded to the top Pinot Noir from entries received from around the globe. It is the third time in a row that the trophy has been awarded to wines produced in Central Otago, with Peregrine receiving the award in 2011 and Valli in 2012. . .

Re-wire on a Hayes Roast:

Hayes Roast is this season’s new addition to the offering at Hayes Engineering & Homestead, a Central Otago property cared for by the New Zealand Historic Places Trust (NZHPT).

“It’s been inspired by the inventions and ingenuity visitors experience at the site,” says Property Manager Scott Elliffe.

“We believe Ernest Hayes – inventor of the Hayes wire strainer that is still in use in farms around the world – would have quickly adapted to the new market of urban trail riders biking past his front door and developed a roasting machine to meet their needs for ‘city coffee, country food’.”

In partnership with Vivace Coffee, the NZHPT asked third generation artisan master roaster Bernard Smith to develop a blend of three original coffee beans that best emulated the strength of the site, the body of the ‘big skies’ Central Otago landscape and the sweetness of its sun overhead. . .


Who could this apply to here?

September 13, 2013

Quote of the day:

“It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.” Murray Rothbard.

This could apply to all three Labour leadership contenders and anyone who promotes what they’re promising as workable and affordable.

Hat tip: Tim Worstall


Govt can’t always use kill switch

August 22, 2013

Tim Worstall points out the big difference between governments and markets:

. . . It takes great effort to get government to do anything. And that great effort comes from the interia of the system: meaning that it takes great effort to get something started and an equal amount of effort to get something stopped. This is in contrast to the market where yes, it takes great effort to get something working. But the system does contain that kill switch: bankruptcy. If something’s not working then it doesn’t take great effort to stop it. It just runs out of money and stops.

And that, I am afraid, is one of the reasons why politics is a bad way to get things done. Simply because they won’t stop doing things even when it’s obvious that they are the wrong things to be doing.

Whenever I have anything to do with the mechanisms of government – central or local – , which mercifully isn’t often, I feel like I’m trying to swim through syrup in gumboots.

The wheels of bureaucracy grind exceedingly slow and change rarely happens quickly.

That isn’t always bad – solutions to problems governments face aren’t usually simple and fast policy isn’t necessarily good policy.

However, politics does often get in the way of good change.

Governments do usually have a kill switch but they’re not always able to use it,

They generally have the ability to make changes but know that doing so will sometimes cost too much support.

Bad policy can be good politics and if change would be unpalatable to too big a chunk of the electorate  governments, and parties wanting to get into government, have to stick with it.

Purists slam this as unprincipled.

But given the choice of staying pure in opposition where they can achieve nothing or swallowing the odd dead rat to get into, or stay in, government where they can make a positive difference, most will opt to chew the rodent.


Tax breaks better than subsidies

July 14, 2013

Quote of the day:

. . . If you believe that politicians, those who direct such subsidies, are knowledgeable, clever and honest beings, striving only to do what is right for the common weal, then you might well argue that they should direct, in detail, where the taxpayers’ money goes. If you’re over the age of seventeen you will have been disabused of that notion, that politicians are honest, knowledgeable and clever, and so would prefer that politicians do not direct in detail. Rather, we might accept that public goods exist, that they should be subsidised in some manner, but having done that we want to keep the politicians as far away as possible from the details of what happens next. I would go further too. A tax break means that anyone who meets the rules gets the tax break. A grant making system means only those who suck up to the politicians get the grants. . . Tim Worstall.

It bemuses me that politicians are usually, and not always fairly, regarded pretty unfavourably but some people still want to direct out money where they see fit by way of subsidies.


Flexibility increases employment

July 8, 2013

Unions and others on the political left greet any move to make labour laws more flexible with howls of outrage.

They either don’t realise, or won’t accept that it increases employment:

Using 1981–2009 data for the 50 states, this article examines the relationship between economic freedom and the unemployment rate, the labor force participation rate, and the employment-population ratio. After controlling for a variety of state-level characteristics, the results from most specifications indicate that economic freedom is associated with lower unemployment and with higher labor force participation and employment-population ratios.

Why don’t people believe this?

Tim Worstall thinks it’s because people really don’t understand the job churn in the economy:

If you think that a rise in unemployment of 100,000 means that 100,000 people have been fired then you might well think that making it harder to fire people will lead to a reduction in the number of people in unemployment. But the truth is that this isn’t what causes a rise in unemployment at all. There are always 100,000 people getting fired. More than that actually: some 3 million jobs, or 10% of the total, are destroyed in the UK economy each year. That’s that destruction part of capitalism. This rate doesn’t, particularly, rise in recessions nor fall in booms either. That’s a reasonably constant rate at which the economy destroys the things that people do for a living.

What does change in a recession is how many new jobs are being created: thus the balance, between those fired and those hired, changes. The actual unemployment numbers that we see are the end result of this complex process. If unemployment rises by 100,000 in one month it’s not the result of 100,000 more people being fired. It’s the result of 100,000 of that (roughly) 250,000 who get fired every month not finding a new job. Unemployment isn’t best thought of as a result of people being fired therefore: it’s a result of people not getting hired.

At which point the economic freedom argument begins to make intuitive sense. The more economic freedom, the less regulation stopping you from doing things, the more things will get tried and done.The less the cost of firing an undesired worker the more of them will be hired: demand curves do indeed work that way. So far so true: my speculation is that those who don’t get this point are those who don’t really understand why unemployment occurs. It simply isn’t because people get fired because people get fired all the time. It’s that they don’t get rehired at times which is what causes unemployment.

The usual suspects warned of dire consequences if the 90-day trial period for new staff was introduced.

They said it employers would keep staff for 89 days then lay them off.

They have a very jaundiced view of employers and don’t understand the cost and work involved in recruiting and training staff, even for jobs requiring little skill, would put almost all off churning through employees like that.

There hasn’t been a long list of people losing their jobs within the 90 day period but there have been more jobs created and unemployment is edging down.

That will be due to several reasons, one of which is that the 90 day trial period, like other initiatives which liberalise labour law, reduces the risk of taking on a new employee.


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