Rural round-up

April 29, 2016

Trade negotiations like water dripping on a stone – Allan Barber:

Before he left for China last week, New Zealand’s Special Agricultural Trade Envoy, Mike Petersen, gave me his thoughts on the process of trade negotiation and a brief list of successes he has been involved with since 2003. At that time he was Chairman of Meat & Wool NZ as it was called in those days.

During that 13 year period New Zealand has signed free trade deals with Taiwan, China, ASEAN which comprises 12 countries and at long last South Korea, not to forget the TPPA. No wonder he called trade negotiations ‘like water dripping on a stone.’ Signing FTAs is never quick and demands a huge amount of manpower, preparation, patience and recognition no country ever gets everything it wants.

The reaction to the TPPA, not only here, but also in other signatory countries, notably the USA, indicates a growing feeling of disaffection with free trade deals because of the perceived loss of sovereignty they entail, including domestic employment opportunities, and conversely the benefits to big business. . .

Food ‘knowledge gap’ creates dangers for farmers:

Does a cow need to have a calf to give milk?

The answer should be obvious, but more than 70% of consumers get the question wrong explains University of Guelph associate professor Mike Von Massow. A majority of Canadians also believe that a chicken is processed for meat when it reaches four years of age.

Von Massow shared these findings from his research on consumer perceptions of food at the Farm & Food Care Ontario annual meeting earlier this month. While many of the findings are troubling for agriculture there is also reason to be optimistic. “Consumers feel pretty good about the food they eat in Canada. Generally they believe they have safe, healthy food and they trust farmers,” says Massow. . .

Tribal councils appeal farmers’ discharge consents – John Gibb:

A decision by independent commissioners to grant a consent for a North Otago farmer from 2020 to discharge nitrogen from three farms on to land ‘‘in a manner that may enter groundwater” has been appealed to the Environment Court.

The consent application from Borst Holdings Ltd was the first to be made under Otago’s new 6A water plan change, which concerns itself with the amount of nitrogen being released into the area’s rivers.

The consent for the Borst farms, near the Kakanui River, was granted for 15 years starting from April 1, 2020. . . 

Dairy farmers will pay for next five years say John Mulvany:

MURRAY Goulburn has sheltered farmers from the real global milk price and they’re going to pay for five years, according to a leading consultant.

Gippsland-based consultant John Mulvany said the effect of the overpayment for milk in 2015-16 will result in the deduction of the equivalent of 24 cents a kilogram of milk solids from milk supply during the next three years, or $36,000 a year for a 150,000kg/MS farm, to pay back for this season’s mistake.

“The late notification is absolutely inexcusable,” he said.

“It is not fair to the MG field staff who, until mid-December, were issuing income estimates with three step-ups leading to a milk price over $6 a kilogram of milk solids. . . 

Sweet opportunities in honey industry for locals:

Today marks the first day of work for 11 Work and Income clients, who will be developing Northland College’s mānuka plantation site.

30 hectares of mānuka will be initially planted on Northland College land – an initiative that provides current and future employment opportunities for Kaikohe people.

The Northland College Mānuka Initiative stems from the Tai Tokerau Northland Economic Action Plan which identifies 58 actions for stimulating the Northland economy. . . 

Horticulture Welcomes Dam Progress:

Horticulture New Zealand has welcomed the announcement of the progress made in funding for the Ruataniwha Dam project in Hawke’s Bay.

The horticulture industry is reliant on sensible management of freshwater in New Zealand and the provision of water for future generations of primary sector business is essential.

“This will see the number of growers increase, and this in turn will improve the sustainability of the proposal,” HortNZ natural resources and environment manager Chris Keenan says. . . 

Expect more gains in nutrient management says Ballance:

Ballance Agri-Nutrients is confident that Sustainable Dairying: Water Accord targets around nutrient data collection and efficiency reporting will continue to lift as more farmers understand the direct benefits to their farms and their OVERSEER® nutrient budgets.

Commenting on the release of Accord results yesterday, Ballance CEO Mark Wynne said that while results had fallen short of targets for nutrient management data and the reporting back of nutrient efficiency information, good progress is being made.

The target is for all dairy farms to provide quality nutrient management data. Progress is currently sitting at 75 percent, up from 56 percent last year. . . 

New online financial problem-solving platform for farmers: ASK Crowe Horwath:

Earlier this month accounting and business advisory firm Crowe Horwath announced the launch of the online platform, ASK Crowe Horwath.

ASK Crowe Horwath, an obligation-free, online financial problem-solving service allows questions to be posed by New Zealand agribusinesses and individuals that are then answered by Crowe Horwath advisors – ‘get a real answer from a real advisor’ is indeed the tagline of the platform.

There are no boundaries to the questions that can be asked, with rural professionals covering the full spectrum of financial services. . .

Debbie Kelliher's photo.


Rural round-up

October 17, 2015

Progressive Meats founder Craig Hickson wins entrepreneur of the year – John Anthony:

A Hastings businessman who started a meat processing company more than three decades ago has taken out New Zealand’s top entrepreneur award.

Progressive Meats founder Craig Hickson was selected from a field of six New Zealand entrepreneurs to be named EY Entrepreneur of the Year for 2015 at a dinner in Auckland on Thursday.

Hickson and his wife Penny started Progressive Meats in Hastings in 1981 with six staff working in a lamb processing facility.

The company now employs more than 300 staff and has processing facilities for lamb, beef, venison and rams. . .

Share register challenge for SFF – Dene Mackenzie:

Silver Fern Farms faces a new problem of how to manage its share register after the Dunedin meat company yesterday received overwhelming support for its joint venture with China’s Shanghai Maling.

The co-operative received 82% votes in favour of the proposal. Shanghai Maling, a listed company in China, will vote on the deal on October 30.

But with the Chinese Government-controlled Bright Food Group owning 38% of Shanghai Maling, and supporting the deal, the vote is expected to easily pass. . . 

TPPA will advance globalisation of agriculture, trade minister says – Gerald Piddock:

Trans-Pacific Partnership Agreement (TPPA) negotiations will trigger more liberalisation of world wide agricultural trade, says Trade Minister Tim Groser.

Once started, the trade process would be difficult to stop, Groser told journalists at the International Federation of Agricultural Journalists Congress in Hamilton.

“We are in my opinion…in the early stage of the globalisation of world agriculture,” he said.

However, he acknowledged that removing agricultural subsidies would be a difficult task for developed  countries. . . 

NZ Merino, on quest to add value to commodities, increases annual profit 21% – Tina Morrison:

(BusinessDesk) – New Zealand Merino Co, a wool marketer which aims to develop higher-value markets for sheep products, posted a 21 percent lift in full-year profit and said it’s on track to double the value of the business in the three years through 2016.

The Christchurch-based company said profit increased to $2.3 million in the year ended June 30, from $1.9 million in 2014, and $405,000 in 2013. Revenue fell 6.1 percent to $109.4 million from the year earlier, while cost of sales fell 7.7 percent to $98.4 million and expenses slid 4.2 percent to $12.8 million. It will pay shareholders, including 536 wool growers, a dividend of $1.2 million, up from $942,000 a year earlier. . . 

Americans are biggest investors in NZ dairy land:

United States investors were the largest investors in our dairy land during 2013-2014, analysis by KPMG has revealed.

In the report on Overseas Investment in New Zealand’s Dairy Land, KPMG has analysed Foreign Direct Investment (FID) decisions by the Overseas Investment Office (OIO) for the 2013-2014 period.

It shows that the US was the largest investor in dairy land during that two-year period – accounting for 54.4% of the freehold hectares sold, and 26.5% of the consideration paid. . .

Manuka honey lobby devises test to prove authenticity – Suze Metherell:

(BusinessDesk) – The UMF Honey Association says it has found the solution to fake manuka honey products, developing a portable device which tests for the nectar of Leptospermum Scoparium, the native manuka bush.

The manuka honey industry group, working with Analytica Laboratories and Comvita, presented the primary production select committee with a portable fluorescent test which can easily indicate whether a product is genuine manuka honey, and research defining the premium honey. Analytica executive director Terry Braggins said the development of a chemical fingerprint, based on the presence of the native bush’s nectar, could distinguish monofloral honey made by bees foraging on manuka flowers from other blended or imitation honey. . . 

 


Quote of the day

October 6, 2015

. . . And when we say ugly, we mean ugly from each perspective – it doesn’t mean ‘I’ve got to swallow a dead rat and you’re swallowing foie gras.’ It means both of us are swallowing dead rats on three or four issues to get this deal across the line. Tim Groser


Still hope for TPPA

September 30, 2015

Trade Minister Tim Groser is going to Atlanta for negotiations which could conclude the conclude the Trans-Pacific Partnership Agreement (TPPA).

Groser had been playing hard to get for the meeting, indicating a willingness to attend only if there was an improvement on the “wholly inadequate” offers of dairy market access from the heavily protected agricultural sectors in the US, Canada and Japan. . . 

Groser said last week that New Zealand negotiators could “see a very good deal for New Zealand in everything except dairy and I don’t know to characterise the deal there because it’s not a deal we could accept.”

Since then, there’s been a flurry of reports in US and Canadian media suggesting that the US is pressuring Canada to accept more dairy products from the US as part of a deal that would begin to prise open the US dairy market for New Zealand and Australian dairy products. . . 

Dairy market access is especially politically sensitive in Canada because the country faces a federal election on Oct. 19 and the country’s dairy sector is highly protected, using a system of supply management intended to match local dairy production volumes with domestic demand.

However, it appears the Harper government’s political calculus is that a dairy deal would hurt its electoral chances most in Quebec, where it is already comparatively unpopular, and that there would be political damage in being seen to walk away from a new Asia-Pacific deal and some kudos in being able to demonstrate trade opportunities for Canadian firms. . . 

This means there is still hope for the TPPA in spite of strong opposition from protected industries and those whose politics blind them to the benefits of free trade and the costs of protection.

Dairy interests must be very powerful in Canada because everyone else pays dearly for its trade barriers which increase prices and reduce choice.

Eric Crampton has a suggestion to change that with this speech he’d like to have heard from a party leader:

“Right now, Canadian dairy prices are much higher than they need to be. Mothers pay too much for infant formula; families pay too much for cheese. And the system as a whole doesn’t even benefit dairy farmers any longer: getting into the industry is expensive because buying quota eats up whatever benefits the system provides to farmers. But there is a better way.”

“We are committed to protecting the quality of dairy products on store shelves – as we are with every food product sold in Canada. But we don’t protect food quality with 300% tariffs for vegetables, fruit, or thousands of other products that cross our borders each and every day. For that, we use food inspections. The dairy quota system isn’t necessary for protecting food quality.”

“Today, we are buying back all of the dairy quota and opening the borders. Farmers should not see their retirement savings wiped out by a policy decision from Ottawa. We are able to afford to do this because dairy prices, in a competitive world market, are low enough that we can fund the buyback with a levy on all dairy products sold in Canada while still keeping prices lower than they are now. And those levies will disappear when the bill is paid in full. Canadians will have better access to the world’s products, and Canadian agricultural producers will have better access to world markets.” . . 

The economics are simple, the politics are not but Not PC shows how difficult life would be without trade in a post on the $1,500 sandwich.

. . . What would life be like without exchange or trade? Recently, a man decided to make a sandwich from scratch. He grew the vegetables, gathered salt from seawater, milked a cow, turned the milk into cheese, pickled a cucumber in a jar, ground his own flour from wheat to make the bread, collected his own honey, and personally killed a chicken for its meat. This month, he published the results of his endeavour in an enlightening video: making a sandwich entirely by himself cost him 6 months of his life and set him back $1,500. . . 

Few but the strongest anti-trade people would suggest we go back to that sort of subsistence existence.

But here in one of the freest economies in the world some people still don’t understand how much we’ve gained from free trade. The transition from the highly protected economy we had wasn’t without casualties but the gains were worth the pain.

The TPPA will bring more gains and since our borders are already so open we have little to lose.


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