Rural round-up

September 30, 2016

Pasture to plate approach for DCANZ regulatory manager Dianne Schumacher – Sue O’Dowd:

A Taranaki microbiologist skilled in the development of regulatory strategies for the New Zealand dairy industry brings a perceptive pasture-to-plate approach to her work.

Dianne Schumacher, who owns a 62-hectare dairy farm milking 110 cows near Stratford with husband Chris, joined the Dairy Companies Association of New Zealand (DCANZ) as regulatory manager in January this year. 

She brings to the role broad international and national food safety expertise gathered during her 30-year career in the dairy industry. . . 

The short-term or long-term game – Rick Powdrell:

With hotly contested demand for stock, farmers and meat processors need to think carefully about their existing strategy and what it means for our industry in the long-term.

Rural New Zealand has been through a challenging climate in recent years, with many farmers still enduring the ‘fallout’ and adjusting their farm policies going forward as they look to return to normal.

Whether you have been through severe drought or de-stocked as a result of last season’s perceived strong El Nino you will be looking to re-stock to more normal numbers. . . 

NZ wins from trade deals –  Mike Chapman:

The question many people are asking is, ‘which trade deal will it be: the Trans Pacific Partnership (TPPA) or the Regional Economic Partnership (RCEP)?’

So much focus has been on the TPPA it is very likely few people in New Zealand know anything about RCEP. The main difference is that the TPPA has the US as one of the partner nations, but not China; while, the RCEP has China as one of the partner nations, but not the US. Neither the US nor China is in both the TPPA and RCEP. For many nations, preferential access to both the US and China is a major goal.

The Peterson Institute assessment is the TPPA will increase annual real incomes in NZ by $US6 billion – 2.2% of our gross domestic product. It will increase our annual exports by $US9b –10.2% of our exports over baseline projections by 2030. This is because the TPPA will eliminate 75% of tariffs when it comes into force and 99% of tariffs when it is fully in force. For horticulture there are real trade benefits totalling around $26m per annum directly due to reduced tariffs. . . 

Time to review your calving date? – Wilma Foster:

With calving almost over and mating on the horizon it’s time to have a review of one of the most significant decisions you will make for next season, calving date.

There are four significant decisions you make on farm every year. They are calving date, stocking rate, BCS at calving and pasture cover at calving.

Historically calving dates were 10-14 days later than what we currently calve.

This has been due to a desire to increase days in milk, farmers mating rising 2-year heifers earlier than the main herd to improve their incalf rates, and the use of bulls with a shorter gestation. . . 

Beetle pest deterred by mussel shell mulch:

Research to find natural ways of reducing insect pest damage in vineyards was highlighted at the 2016 Romeo Bragato Conference – the largest conference for wine growers and makers in New Zealand.

Mauricio González-Chang, a Lincoln University PhD student in the Bio-Protection Research Centre, presented evidence that mineral feeding deterrents and mussel shell mulch can protect vines from grass grub beetle attack.  

Mauricio’s study of vines in the Awatere Valley in Marlborough, found that natural silica-containing feeding deterrents, such as kaolin particles (hydrophobic particle films) and diatomaceous earth, reduced the damage caused by beetles by about a third in chardonnay, and a half in pinot noir grape varieties.  

While the silica results were promising, the greatest reduction in damage was seen when crushed mussel shells were spread under the vine rows. The shells affected landing behaviour of the beetles and resulted in a two-thirds reduction in feeding damage. .  .

Bring your ag innovations to the table :

Innovative food and agribusiness start-ups and fledgling ventures will have the opportunity to showcase themselves to potential investors in Sydney in November.

FoodBytes! Sydney will be staged as part of the international Farm2Fork Summit, focusing on future innovation in food and agriculture, to be held on Thursday, November 3.

Originally launched in the United States in 2015, FoodBytes! is designed to find the most innovative concepts in food and agriculture and pair that creativity with the capital needed to bring them to market. . . 

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I am a farmer. I solve problems you don’t know you have in ways you can’t understand.


Rural round-up

May 5, 2016

Cheese-maker happy with the blues – Shannon Gillies:

Pursuing her goal of becoming a businesswoman in the highly competitive world of cheese-making has led Frenchwoman Pauline Treillard to Oamaru.

Originally trained as a sommelier, Ms Treillard (25) left that job to pursue her interest in cheese and became a cheese-maker in her home province of Bordeaux.

After years of trying to get further in the male-dominated industry, she decided to take a chance on the southern hemisphere and left France in 2013.

She arrived in Oamaru in March 2016, after her visa application to stay in Australia with her partner was declined. . . 

China Links paying dividends – Hugh Stringleman:

A week-long trip to China with Prime Minister John Key’s recent government and business delegation enabled Fonterra chairman John Wilson to view first-hand his co-operative’s engagement with its biggest and most-important market. Hugh Stringleman got a debriefing.

Vertical integration of Fonterra’s activities in China position it well for dynamic markets, regulatory changes and government approval, Fonterra chairman John Wilson says.

President Xi Jinping commented on Fonterra’s $1 billion-plus investment in China and the creation of 1600 jobs, Prime Minister John Key had reported. . .

Hard times swell Gypsy Day moves – Hugh Stringleman:

Sharemilkers and other dairy farm staff will be moving in greater numbers this Gypsy Day because of tough times in the industry.

Federated Farmers sharemilkers’ section leaders said more of the annual end-of-season moves would be from necessity and were not improvements in jobs.

“Higher-order sharemilkers will be moving for financial and structural reasons while the lower-orders and contract milkers may be taking a step backwards, unfortunately,” section chairman Neil Filer of Dannevirke said. . . 

Genetics could help combat FE – Sudesh Kissun:

An outbreak of facial eczema (FE) on the West Coast is driving home the need for FE-tolerant genetics, according to a farmer.

Andrew Bruning and Tracey Herrick are first year dairy farming in Karamea, where the whole district has been hit hard with FE — unusual for the area, Bruning says.

They milk 180 cows, mainly Friesian with some crossbred; a quarter of the herd have clinical symptoms of FE. Bruning believes the rest of the herd is suffering with sub-clinical symptoms. . . 

 ‘Gutless’ thieves butcher cow in field – Liz Wylie:

Kaitoke farmer Tony Skews said thieves who shot and butchered his prize cow on Monday night are “gutless pieces of junk”.

Mr Skews, who keeps just 15 cows on his property near Lake Wiritoa, said the animal had been shot with a .22 rifle and badly butchered by “amateurs”.

“They have taken the back steak and four legs and just left the rest,” he said.

“She was the fattest cattle beast on the property and this loss has cost me about $1500.” . . 

 

John Key's photo.

I back our farmers, our manufacturers, our ICT companies and in fact all our export industries to succeed.

If we can get an equal crack at world markets, we’re up there with the best in the world. John Key.

John Key's photo.

This deal matters to individual businesses and workers ine very region of the country.

The orchardist in Hawkes Bay, the windegrower in Marlborough, the dairy farmer in Waikto, and the IT provider in Auckland all stand to benefit. – John Key.


Rural round-up

February 5, 2016

Demand pushes ewes up to $200 – Annette Scott:

A shortage of sheep and recent pasture growth has seen ewe prices skyrocket against all odds at the South Island ewe fairs this past week.

With the dismal state of lamb prices and the dry start to summer, ewe fairs were not expected to fire this season.  

“I don’t know where the confidence is coming from. The processing companies are certainly not giving much confidence,” PGG Wrightson south Canterbury livestock manager Joe Higgins said. . . 

Pressure on NZ’s farmland discussed – John Gibb:

The challenge of achieving sustainability and growing pressure on New Zealand’s rural landscape were highlighted during a national geography conference at the University of Otago yesterday.

New Zealand Geographical Society president Emeritus Prof Harvey Perkins, of Auckland University, and Prof Eric Pawson, of Canterbury University, gave a joint keynote presentation on New Zealand ‘‘going global”.

They also focused on ‘‘the tensions of rapidly shifting external relationships and the remaking of domestic rural landscapes”. . . 

Fonterra Introduces Market-Linked Price for Organic Milk:

The success of Fonterra’s organic business has prompted the Co-operative to introduce an independent organic milk price linked to market returns for organic products.

From June 2016, organic milk payments will reflect the performance of the organics business. Organic farmers currently receive a fixed premium together with the conventional Farmgate Milk Price for their organic milk supply. Organic farmers can choose to move to the new payment approach or stay under the existing payment system. . . 

TPP will help remove regulatory barriers:

The main benefit for the deer industry from the Trans-Pacific Partnership (TPP) agreement will be the ability to challenge any potentially unfair regulations imposed by importing countries.

“Regulatory barriers can sometimes do more to impede trade than tariffs and quotas. Under the TPP, there will be an independent disputes mechanism that will allow our exporters to appeal regulations in importing countries they believe are unjustified or unfair,” says Deer Industry NZ (DINZ) chief executive Dan Coup. . . 

Red meat sector welcomes signing of the Trans-Pacific Partnership (TPP) Agreement:

The signing of the Trans-Pacific Partnership (TPP) Agreement today in Auckland is a significant step towards reducing the amount of tariff and non-tariff barriers on New Zealand red meat exports, according to the Chairmen of Beef + Lamb New Zealand (B+LNZ) and the Meat Industry Association (MIA).

Trade Minister Todd McClay signed the TPP Agreement today with the 11 member countries, including from Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore, the United States and Vietnam. . . 

He’s farming again after drought – Alan Williams:

David Hyde is a happy farmer who credits his positive attitude for coming through the north Canterbury drought still loving being on the land. He told Alan Williams how he coped by adapting his usual farming practices to meet the challenges.  

David Hyde says he can start farming again after January rain ended the severe and long-running drought on his Scargill Valley farm in north Canterbury.  

The lucerne that had browned off by late last year has raced away in the last few weeks and will soon be cut for balage – something not normally expected in early February in north Canterbury. . . 

Horticulture Welcomes TPP Signing:

New Zealand’s peak body for commercial fruit and vegetable growers, Horticulture New Zealand, has welcomed the official New Zealand signing of the Trans Pacific Partnership agreement today.

Horticulture is New Zealand’s fourth largest export earner, sending fresh and processed products to more than 120 countries, valued at more than $2.5 billion every year.

The estimated saving for nine key product lines (kiwifruit, apples, avocado, buttercup squash, capsicum, cherries, onions, potatoes and vegetable juices) is just over $25 million a year for the growers now exporting these products to Japan, the USA and Vietnam. . . 

Kiwifruit winner in TPP Agreement:

The Trans-Pacific Partnership (TPP) Agreement will generate significant value for the New Zealand kiwifruit industry and Zespri welcomes the signing of the Agreement today in Auckland.

Zespri Chief Executive Lain Jager explains the TPP will eliminate tariffs on kiwifruit exports into all 12 Asia-Pacific nations when it comes into force, with the biggest impact to be seen in Japan.

In 2014, the industry paid over $15 million in tariffs into Japan which is Zespri’s largest country market . . 

World’s largest fruit trade show shines spotlight on Kiwi ingenuity.

The world’s fresh produce industry is gathering in Berlin this February to showcase its wares as well as discussing global trends in fruit and vegetable production and consumption.

Among them will be New Zealand’s leading horticultural producers and the creators of some world-leading Kiwi technology.

Fruit Logistica 2016 is a trade fair with a global scope. It provides an excellent opportunity for growers and equipment manufacturers to get in front of the European market, which takes over half a billion dollars of our horticultural exports every year. This year’s exhibitors include Zespri, Plant & Food Research, Wyma, BBC Technologies and Compac. . . 

Exciting Mānuka honey scheme launched:

A new initiative to boost the mānuka honey industry in Northland and provide educational and employment opportunities has been launched today at Northland College by Māori Development Minister Te Ururoa Flavell, Education Minister Hekia Parata and Primary Industries Minister Nathan Guy.

The Mānuka Planting Initiative at Northland College is part of the Tai Tokerau Northland Economic Action Plan which was launched this morning.

Mr Flavell, who is also the Associate Economic Development Minister, says the initiative will help prepare and upskill unemployed adults living in Kaikohe. . . 

Aotearoa Fisheries appoints new directors to Sealord:

Aotearoa Fisheries Limited is making changes to its appointed directors to Sealord Group Limited in order to have a complete alignment of its appointees with its own board. Aotearoa Fisheries owns 50% of Sealord on behalf of all Māori, and as such appoints half of the Sealord board of directors.

As part of the recent Maori Fisheries Act review Iwi expressed a strong desire for the Aotearoa Fisheries Limited appointed Sealord directors to come directly from the Aotearoa Fisheries Limited Board. Aotearoa Fisheries Limited Chairman Whaimutu Dewes said these changes will give effect to this desire. . . 

Dairy Awards Entrants in the Spotlight:

Entrants in the 2016 New Zealand Dairy Industry Awards are being put through their paces, as judges deliberate who the first regional winners will be.

Judging is currently underway in the 11 regional competitions of the 2016 New Zealand Share Farmer of the Year, New Zealand Dairy Manager of the Year and New Zealand Dairy Trainee of Year competitions.

More than 450 people entered the awards, with the first of the regional winners to be announced in Taranaki on March 4. . . 

Brancott Estate and BlueChilli seek the next big idea in wine tech:

Brancott Estate revolutionised the wine industry when they pioneered Marlborough Sauvignon Blanc in 1975. Now they are looking for the next pioneer in the wine industry with the announcement of winexplorer, an innovation challenge designed to revolutionise the way wine is enjoyed.

“When we decided to plant Sauvignon Blanc vines in Marlborough in 1975, we created one of the world’s most popular wine styles and turned New Zealand into one of the world’s premier wine growing regions. Now we are looking to change the wine world again by identifying ideas that will fundamentally change the way people enjoy wine.” says Patrick Materman, Brancott Estate Chief Winemaker and a winexplorer judge.

“Whether it’s an idea about how people choose what wine to drink, or how they share that wine with their friends, if it’s big, bold and revolutionary, then we want to hear it.” . . 

Wine Flight to take off:

More than 60 of the world’s most influential wine media, trade and sommeliers will enjoy a unique “Wine Flight” today thanks to Air New Zealand and New Zealand Winegrowers.

Two Air New Zealand Q300 aircraft are scheduled to take off from Blenheim this afternoon and cruise at 11,000ft, taking in spectacular views of some of New Zealand’s best known wine regions, including Marlborough, Nelson, Martinborough/Wairarapa, Hawke’s Bay and Gisborne.

On board the VIP passengers will enjoy wines from some of the regions they’re flying over, including a Nelson Albariño, a Martinborough Pinot Noir and a Hawke’s Bay Syrah. . . 


TPPA true & false

February 4, 2016

The National Party has a webpage giving the facts and refuting the myths on the Trans Pacific Partnership Agreement (TPPA) which is being signed in Auckland today.

Don’t believe that?

Chapman Tripp says:

The TPP began life modestly as an initiative between New Zealand and Singapore, but the ambition was that it would evolve into a trans-Pacific agreement.  The first recruits were Chile and Brunei and the net has subsequently extended to Australia, the United States, Canada, Japan, Malaysia, Mexico, Peru and Vietnam.

New Zealand now finds itself in the vanguard of the new wave of economic globalisation.  This is a coincidence of the worldwide focus on FTAs to further integrate economies, the prominence of Asia, and the United States’ and Japan’s renewed interest in the Pacific Rim. 

Some find this uncomfortable.  Many, including the protesters at Seattle, found the birth of the WTO in 1994 similarly uncomfortable.

Difficult as change can be, this is an opportunity which will not come again.  In its final form, the TPP is the biggest free trade deal in a generation and will establish the architecture of Asia Pacific trading relationships for decades to come.  . . 

and concludes

. . . Labour’s frustration is understandable.  The TPP does not appear to include the specific reservation of rights Labour wanted.  New Zealand negotiators could perhaps have sought a more nuanced provision, such as appears in the NZ-Korea FTA, which arguably preserves some scope to expand the OIA screening regime.  It is hard to see that the more absolute language in the relevant TPP annex was a deal breaker for other negotiating parties. 

Negotiating parties tend not to publicly announce their bottom lines in advance to avoid painting themselves into a corner, as Labour has effectively done.  One cannot, of course, sensibly weigh up the overall merits or demerits of a 6000 page 12 party agreement by looking only at one provision.  To attempt this is to miss the wood for the trees. 

None of the signatory countries will be perfectly satisfied with the deal.  Each will have a particular clause or clauses that they would prefer were not there.  The US Republican Senator, Orrin Hatch, for instance is chagrined that the IP chapter grants only five, and not eight, years’ protection to biologics. 

But if support for the deal was premised on perfection, then it would go the way of the Doha Round.  It is no coincidence that TPP opponents play the single issue game.  Conflating whether one gets everything one wants, and whether the deal is acceptable overall, is a classic black hat strategy. 

The art of negotiating involves being able to push hard for one’s positions, then to stand back and work out whether (even if one did not get all one wanted) the deal on the table is better than no deal at all. 

Here, the question is even more stark.  Would New Zealand be better off inside, or outside, the tent?  MFAT’s national interest analysis reaches a firm conclusion, having weighed everything up over 276 pages.  It is respectfully suggested that this conclusion deserves to be afforded more weight than anyone’s position based on a single issue.

Those last two paragraphs nail it.

The deal isn’t perfect but it is better than no deal at all and New Zealand is better inside the tent than outside it.

The usual nonsense at Waitangi purports to be about the TPPA threatening the Treaty but the Federation of Maori Authorities is cautiously supportive:

. . .Chair Traci Houpapa said there were benefits and opportunities for Māori and all New Zealanders.

“We’ve analysed those documents ourselves and while we have a level of comfort we agree with the 12 month consultation process that the signing on the 4th of February triggers.”

Ms Houpapa said the removal of some or most tariffs for exporters would have financial benefits for the federation’s regional members.

“Māori have a predominate footprint in primary sector industries, we are land, water or sea based so our exporters have obvious benefits if the removal of tariffs are in place and TPP provides for that.”

FOMA is happy with the provisions within the agreement that acknowledge the Treaty of Waitangi, which say it must be enshrined, but FOMA recognises further analysis of what that means is required. . . 

“We recognise TPP is a complex trade arrangement which requires time to fully digest and understand. Our members support the trade benefits and want assurance that our national sovereignty and Treaty partnership are maintained. We welcome proper engagement with government and our members on this important matter,” said Ms Houpapa.

Proper engagement will achieve what all the protests prefaced on political agendas won’t.

Charles Finny says the TPPA deserves praise from Maori:

I believe that rather than being inadequate in its protections for Maori, TPP is if anything a taonga in the way it protects the rights of the New Zealand Government to discriminate in favour of Maori. This in turn, I think, adds enormous mana to Maori.

I feel Maori are being poorly advised from some quarters and it is essential that ministers and government officials spend even more time explaining the protections for Maori in the agreement and the trade benefits that will flow to Maori from it. These benefits are substantial.

TPP is an agreement between 12 countries. Pretty much all the 12 jurisdictions are home to indigenous minorities – for example, the First Peoples of the United States, Canada, Mexico, Peru, Chile, the Aboriginal people in Australia, the Malays in Singapore and Malaysia, and the Ainu in Japan.

Yet none of these peoples is mentioned in the main text of the deal and none of their Governments has secured agreement from the other members that they should be allowed to discriminate in favour of them.

In contrast Maori are mentioned, as is the Treaty of Waitangi. Article 29.6 of TPP is actually titled “Treaty of Waitangi”. It says that “provided that such measures are not used as a means of arbitrary or unjustified discrimination against persons of the other parties or as a disguised restriction on trade in goods, trade in services and investment, nothing in this agreement shall preclude the adoption by New Zealand of measures it deems necessary to accord more favourable treatment to Maori in respect of matters covered by this agreement, including in fulfilment of its obligations under the Treaty of Waitangi”.

This is pretty much the same clause that has been included in all free trade agreements (FTAs) New Zealand has negotiated since 2001. It has stood the test of time. It has allowed multiple Treaty settlements to be completed and has not had (as some critics claim will happen under TPP) “a chilling effect” on Government’s ability to adopt policies more favourable to Maori than other New Zealanders or nationals of these FTA partners.

TPP’s protection of the Treaty goes even further than earlier FTAs. It states “the parties agree that the interpretation of the Treaty of Waitangi, including as to the nature of the rights and obligations arising under it, shall not be subject to the dispute settlement provisions of this agreement.” This means it is entirely up to New Zealand to determine if any discrimination has occurred because of the treaty (so long as this is not a disguised restriction on trade).

I am frankly amazed the US and others have agreed to this provision. Our ministers and officials have done a great job achieving this. All Maori should be saying: “Well done!” . . 

He also posts on Facebook:

TPP contains two types of dispute settlement. In the media and political criticism the two are often confused. There is the standard (in WTO and all our FTAs apart from CER – the reason why apples took so long to resolve)provisions which allow parties to the agreement to challenge breaches of the agreement. This is a purely government to government process and applies to the full agreement unless specified (e.g. interpretation of the Treaty of Waitingi the dispute settlement provisions do not apply). Then, in the investment chapter only, there is the investor state dispute settlement mechanism. This allows a company to challenge a government if it believes that government has breached its commitments in the investment chapter only. Many of the critics (who should know better) suggest that governments can be sued for breaches of outside of the investment provisions. This is not possible.

It is important to stress that TPP is worded differently to NAFTA and the Australian investment treaties that were used to challenge plain packaging of cigarettes. The critics often cite these agreements as examples of why we should fear ISDS without noting the fact that TPP has been drafted with the sloppy drafting in earlier agreements in mind.

New Zealand has been agreeing (indeed advocating for ) ISDS provisions in investment treaties and FTAs since the late 1980s (see for example the original China NZ Investment protection agreement). To date the NZ Government has yet to face a challenge.

Put simply I believe these provisions provide useful security for NZ investors offshore. Some of the governments we trade with and have FTAs or investment treaties are far more likely to breach these agreements than we are.

There are multiple exclusions (e.g. our Overseas Investment laws) and multiple acceptances of our right to regulate to protect the environment, to protect human health and safety, to discriminate for Maori under the Treaty of Waitangi etc to ensure that TPP will not have the type of chilling effect on policy making that the critics maintain. And, on top of the above protections, tobacco is completely carved out of the agreement so no worries there.

But is you want to nationalise huge hunks of the economy without compensation – you do have a problem. As you would if you tried to use human health as a justification for a policy if there was no science to justify the policy. Until recently I did not think that future NZ Governments would act in this way. This is why I think we have nothing to fear and that these provisions can only benefit NZ.

Stephen Jacobi wrote an open letter to Labour leader Andrew Little. It’s worth reading in full, I have chosen the extract with most relevance to farming:

. . . I agree that the dairy aspects of TPP are not as good as they could have been and as we had hoped.  But they are in the view of the negotiators and the dairy industry the best that could have been achieved in the circumstances.  Dairy still benefits more than any other sector from tariff cuts in key markets and the establishment of new tariff quotas.  The meat deal – specifically beef to Japan – is a significant market opening about which the industry has welcomed. Without this we will not be able to compete with Australia which already has an FTA with Japan. To call the rest ‘not much’ is a serious under-estimation – tariff reductions and/or elimination for horticultural products including kiwifruit, wine, wood products and seafood cannot so easily be dismissed. Addressing tariff and non-tariff barriers for manufactured products like health technologies and agricultural equipment is also significant.  This will result in the creation of new markets as you suggest. . . 

Duncan Garner says the political consensus on free trade is over:

After decades of supporting free trade, Labour has chosen to veer left into the bosom of New Zealand First and the Greens and oppose the TPP. It’s short-sighted and totally hypocritical, in my view. It looks like the party has had its strings pulled by anti-TPP academic Jane Kelsey.

This is a serious and controversial departure for Labour, and it may yet hurt the party among middle New Zealand voters.

Do these politicians know that our bottled wine can be sold tariff-free in Canada, Japan and the US on day one of the TPP being implemented? Why would you oppose that after we as a country have fought for this for so long? Most fruit and other produce can be exported tariff-free too, as a result of the TPP.

I travelled the world with Labour and National Party ministers for years, watching them fight bloody hard for market access for our exporters. I have seen a block of New Zealand butter selling for $25 in Japan; the same with cheese. Some of these tariffs are so high our exporters are locked out.

I’ve also seen Phil Goff, Helen Clark, John Key, Mike Moore and Tim Groser invest thousands of hours over the years for this sort of deal. Rather than accuse them of selling out, I’d argue they’ve done a great job. . . 

The truth is Labour has taken a massive risk opposing the TPP. I sense the silent majority understands we have to be part of it, despite the noise from the usual suspects.

Labour is divided and bleeding over the TPP. More Labour MPs want to voice their opinions in support but they’ve been silenced.

Ms Clark, Mr Key, Mr Moore, Mr Groser and David Shearer aren’t idiots. They know New Zealand has no choice but to be on board. Foreign investment is crucial into New Zealand too.

My friend runs a hotel in rural Waikato. The Chinese bought it recently. They have invested thousands into doing it up; they employ 33 locals in and around Tirau and Rotorua. Without the Chinese owners it would have closed and 33 Kiwis would be out of work. We have no option but to be international traders. Without it we die, slowly.

I predict the sky won’t fall in. And exporters stand to make billions more in the years ahead.

We won’t get rich buying and selling to each other; we need barriers broken and global doors open.

That’s why we must continue to fight for international trade deals — knowing there will always be a boisterous but small mob who hate the idea, no matter what the facts. 

Brian Easton who is no apologist for the right, asks can we afford not to adopt the TPPA?

. . . While there has been much focus on the TPP deal, there has been hardly any mention of the WTO (World Trade Organisation) agreement in Nairobi which prohibits agricultural export subsidies. Some 30 years ago a trade negotiator commented to me that getting rid of this dumping might be the best single thing we could do for our exporters. Not only would it stop the undercutting of their markets but it would force domestic agricultural reform because the dumping nations could no longer export the surpluses arising from their subsidies. There is not a lot of this subsidising going on at the moment but without an agreement export subsidies are likely to come back – to New Zealand’s detriment.

What was not always mentioned was that the chair of the WTO agricultural committee which negotiated the deal was a New Zealand ambassador, who is the fifth New Zealand chair in succession. This not only reflects the excellence of our Geneva ambassadors and the priority we give to agriculture in the WTO, but that the powerful – most notably the US – trust New Zealand to do a good job. That trust arises from the way we behave in other trade negotiations, including the TPP. The implication is that if we defaulted on the TPPA we would damage that trust and our ability to function effectively in a wide range of other international negotiations we care about, including on climate change.

That puts us in an extremely invidious position over the TPPA. Sure, we could turn it down, losing both its benefits and its downsides. Were we to do so, however, we would compromise the trust our international activity depends upon, especially the possibility of other trade deals which would open up markets currently restricting our exports. . . 

. . . Japan and the US (indeed the whole of the North American bloc) are members of the TPP. We have been struggling for ages to get deals with these two but have been too low on their pecking order to be noticed. So you might think of the TPPA as a means of getting the deals.

That is a positive, but of course the deals have to be favourable to us. Many argue they are not although their vehemence is offset by those who argue the opposite. The truth is that there are positives and negatives and different people balance them differently. In my opinion it is not much use focussing on a subset of the outcomes and ignoring everything else. Deals are about giving and taking.

The logic in this column is that we now do not have much choice about the TPPA. The government is trapped into agreeing to it because rejecting it has implications for other trade deals and our wider international relations. That is probably what our MFAT officials are advising, although no doubt there are many diverse views in there, just as there were with Vietnam. Here is my best guess about what is likely to happen.

There is a signing of the agreement in Auckland this Thursday. The exercise is primarily ceremonial – agreeing to a common text and exhibiting solidarity. I suppose the protests outside are ceremonial and for solidarity too.

The twelve partners then go away and prepare for the implementation of the text. Some things can be done by regulation, some require a change in law. The degree to which each partner has to do this differs according to their constitutional arrangements. . . 

 

By now there are so many imponderables that there is insufficient room in a column to pursue them all in a balanced way. My guess is that, given the way we are trapped by the wider international issues, the cautious advice is to proceed on the path of implementing the legislation for the TPPA, making as much international progress elsewhere. We can then review whether we really want to go ahead with the implementation. Legislation can always be reversed, agreements abrogated, although if the government changes its mind it is better that some other partner pulls the plug. Much of what is due to happen will be less ceremonial than this Thursday.  

And Prime Minister John Key says:

. . . “Opponents claim we’re giving away our sovereignty and that’s completely wrong – the TPP has almost identical provisions to the China free-trade agreement.”

Mr Key said other countries would not be able to write New Zealand laws and the TPP didn’t increase the cost of pharmaceuticals.

“The TPP is our biggest free-trade deal, successive governments have worked to get free trade with countries like the United States, Japan and Canada for 25 years,” he said.

“It will create significant new trade and economic opportunities for New Zealand… it gives our exporters access to 800 million customers in 11 countries across Asia and the Pacific.”

And those new opportunities will create jobs here, increase our GDP and earn us the money we need to pay our way.

The deal isn’t perfect but it’s better than what we’ve got and a long way better than what we’d have if our competitors were in the warmth of the tent and we were left out in the cold.


Three Labour leaders for TPP

January 28, 2016

Two of Labour’s former leaders, Phil Goff and David Shearer, who are still senior members of its caucus are quite clear that they support the Trans Pacific Partnership (TPP).

A third former leader, Helen Clark, also supports the agreement.

Mr Goff, a former leader and former Trade Minister and now an Auckland mayoral candidate, and David Shearer, also a former Labour leader, last night told the Herald they both still supported the TPP.

Mr Goff said the deal should be signed.

Former Labour Prime Minister Helen Clark also backed the TPP among 12 countries and it was begun under her leadership. Mr Goff was Trade Minister.

Labour has decided to oppose the TPP on the grounds that it undermines New Zealand’s sovereignty.

Mr Goff did not blatantly criticise Labour’s position. But he effectively dismissed that view and the suggestion that Labour would not be able to prevent foreign investors buying New Zealand residential property.

“Every time you sign any international agreement you give away a degree of your sovereignty.” He cited the China free trade deal negotiated when he was Trade Minister.

“We gave up the sovereign right to impose tariffs against China when we signed up to the China free trade agreement. But it came with quid pro quos. China gave up its right to impose huge tariffs on us.

“That’s what an international agreement is; it’s an agreement to follow a particular course of action and a limitation on your ability to take action against the other country.

“You have the ultimate right of sovereignty that you can back out of an agreement – with all the cost that that incurs.”

The costs of not being part of such a wide trade agreement would be significant.

The TPP obliges member Governments to treat investors from member countries as though they were domestic unless exceptions are written into the agreement. Labour wanted an exception written in for investors in residential housing but National did not seek it.

Mr Goff is critical of National for choosing not to do that.

“But there is more than one way to skin that particular cat,” he said. “We retained the right to make it financially undesirable or unattractive to buy up residential property in New Zealand.

“You can still impose, as Singapore and Hong Kong do, stamp duty on foreign investors.” . . 

Labour’s biggest achievement last year was the appearance of caucus unity.

This breaking of ranks shows that the veneer of unity was thin.

That some in Labour disagree with the caucus position might entertain political tragics.

But the bigger significance is that for the first time in decades it’s walking away from the consensus it’s had with National on free trade.

Caucus disunity might hamper its chances of returning to government. But it will get there sooner or later and any failure to foster free trade progress as successive governments have, won’t be in the country’s best interests.


Rural round-up

January 27, 2016

NIA shows duty cuts to major export destinations – Neal Wallace:

Annual duty savings of $272 million will be removed on exports to five signatories to the Trans Pacific Partnership with which New Zealand does not have trade agreements, the Government revealed today.  

Trade Minister Todd McClay released the national interest analysis (NIA) on the 12-country agreement which largely confirmed trade benefits it had announced earlier.  

The NIA revealed exporters paid duty of $334 million a year on exports to five countries with which NZ does not have free trade agreements, the United States, Japan, Canada, Mexico and Peru. . . 

Westland Lowers Pay-Out Predictions as Global Dairy Prices Predicted to Remain Low:

Westland Milk Products, New Zealand’s second biggest dairy co-operative, today announced a drop in its pay-out predictions for 2015-16, saying a forecast 15 to 25 percent reduction across all commodity products for the remainder of the season is the driving force behind the decision.

Chairman Matt O’Regan says the new predicted payout of $4.15 – $4.45 per kilogramme of milk solids (kgMS) (previously $4.90 to $5.30 per kgMS) will be grim news for Westland’s shareholders but, given the widely publicised state of the global dairy market, not unexpected. He says lower prices are expected to remain for this season and probably into the second half of 2016 – the beginning of the 2016-7 season. . . 

New Zealand’s future agri-leaders in running for trans-Tasman award:

• 2016 Zanda McDonald Award finalists announced

Two young New Zealand agri-business professionals have made it through to the finals for the 2016 Zanda McDonald Award.

Dean Rabbidge, a dairy, beef and sheep farmer from Wyndham, Southland, and Erica van Reenen, an agricultural and environmental consultant with AgFirst, based in Manawatu, have been selected as finalists alongside soil scientist, Wesley Lefroy, from Western Australia.

The three, who attended interviews in Brisbane late last year, will join the PPP ‘Capital Connections’ Conference in Wellington in March – where the award winner will be announced. . . 

Drought in South Island enters second year:

Widespread drought conditions in the South Island mean the medium-scale event classification will be extended until the end of June, Primary Industries Minister Nathan Guy has announced today.

“Extra funding of up to $150,000 will go to local Rural Support Trusts with $40,000 of this going to the North Canterbury Trust,” says Mr Guy. 

Speaking with farmers at a sheep and beef farm in Weka Pass, Hurunui, Mr Guy acknowledged this is the third time the classification has been extended.

“Marlborough, Canterbury and parts of Otago were originally classified as a medium-scale event on 12 February 2015 and have had very little rainfall for more than a year now. . . 

Drought resistant pasture being investigated:

Scientists have identified a type of plant that recovers quicker than others after drought and are taking the next steps to get it on to farmers’ paddocks.

But they say it could be eight to 10 years before it is available.

The Primary Growth Partnership – Transforming the Dairy Value Chain is funding the research into pasture resistance.

It comes at a crucial time with 2015 being the hottest on record and Marlborough, Canterbury and parts of Otago enduring their second season of drought. . . 

Industry Challenged by new forest technology:

Foresters face paradigm shift for logging steep slopes

The tables are being turned on foresters and logging contractors in British Columbia. Disruptive technology from New Zealand is set to create a whole new way of logging in B.C.’s forests. When meeting challenges to safely harvest NZ’s steep sloped forests, practicing foresters found convincing safety advantages with the new harvesting technology.

In recent years, loggers in New Zealand’s forest industry faced safety challenges in tree falling, especially on steep slopes. There was no choice but to reduce accidents. Up and down the steep, forested country, people turned to the safety of mechanised harvesters. Simultaneously, safety and productivity improved. . . 

Intensifying workplace laws means there are no longer any ‘family farms’ and they can’t be an extension of a backyard playground – John Brosnan:

It’s a new year on farm.

You have negotiated the Christmas and the New Year breaks with the team, so now is a good time to take a breath and consider – what next?

Well first out the gate will be the new WorkSafe legislation which comes into force 1st April this year. Are you prepared for this? Have you prepared an operational plan and put in place a robust health and safety policy? Do you and all your employees have a means to adhere to it? . . 

Canterbury dairy farm penalised for employment law breaches:

The Employment Relations Authority (ERA) has ordered Viewbank Dairy Ltd near Rakaia to rectify employment law breaches discovered by Ministry of Business, Innovation and Employment’s Labour Inspectorate and pay $7,500 in penalties.

The Ministry of Business, Innovation and Employment’s Labour Inspectorate visited the farm as part of an audit to check for compliance with minimum employment standards on dairy farms. A number of breaches were identified and an Improvement Notice was issued. The Inspector brought the case before the ERA when the employer failed to comply with parts of the Notice.

Labour Inspectorate Southern Regional Manager Stuart Lumsden says the investigation found that several workers had been treated as casual employees when in fact they were permanent. . . 

Take advantage of steady nutrient costs:

The Fertiliser Quality Council (FQC) says current stability around fertiliser prices will give farm budgets an early boost for 2016 – but only if farmers are quick to seize the opportunity.

The two main fertiliser manufacturers, Ballance and Ravensdown, have kept costs for major nutrients under control since September 2015 – despite economic volatility caused by last year’s slide in the value of the New Zealand dollar.

The FQC says there’s no knowing for how long the good deals will continue and urges farmers to take advantage of the co-ops’ goodwill while it lasts. . . 

Karaka Select Sale Commences Today:

The first day of the Karaka Select Sale commences today at 11am with Lot 448 to Lot 670 going under the hammer.

The Sale will be streamed live online. To view the live stream, click here.

There have been 27 Group 1 wins from graduates of the Select Sale over the past three seasons. The new season has seen Mongolian Khan (Holy Roman Emperor) and Tarzino (NZ) (Tavistock) both land Group 1 races during the Melbourne Spring Carnival. . . 


End of Ag subsidies in sight

January 19, 2016

The 10th World Trade Organisation Ministerial Conference concluded with an agreement of eliminate agricultural subsidies.

. . . Hailed by WTO Director General Roberto Azevêdo as “the most significant outcome on agriculture” in the history of the WTO, this decision includes a commitment to eliminate subsidies for farm exports.1 Developed countries have made a direct commitment to eliminate export subsidies immediately, with the exception of a few agricultural products; subsidies on some of the most sensitive products, such as processed foods, dairy products, and meat, must be phased out by 2020. Developing countries have been granted until 2023 to remove their subsidies, with Least Developed Countries (LDCs) and net food-importing countries having until 2030 to meet their commitments.

The decision to end agricultural export subsidies is widely supported by research from institutions such as IFPRI’s Markets, Trade and Institutions Division, which contributed several reports to this year’s discussions with the WTO Secretariat and a number of WTO member countries. In a recentFSP blog post based on a forthcoming IFPRI Working Paper, IFPRI researchers David Laborde and Eugenio Diaz-Bonilla explained the potential impacts of the full use of existing export subsidy allowances. During recent years of high global agricultural prices, export subsidies were not needed by countries to sell on the global market; thus, the subsidy levels allowed by the WTO were higher than the level of subsidies actually being used. As prices have started to fall, however, this unused portion of allowable subsidies (sometimes called “the water”) could come into play. Using a CGE model, the authors find that if global agricultural prices continue to fall, the unused portion of export subsidies allowed by the WTO could reach US$11 billion. The full use of this amount, the authors estimated, could displace agricultural production in middle- and low-income countries by about US$12 billion, negatively impacting poverty reduction and food security throughout developing regions. The decision in Nairobi to eliminate agricultural export subsidies represents an important step in the right direction to protect poor populations from these harmful effects. . . 

Subsidies benefit a relatively few, generally inefficient producers at the cost of more efficient producers, consumers and taxpayers.

They reduce choice and increase costs.

They also divorce producers from market signals.

When the milk price dropped, New Zealand farmers cut back production but farmers in countries with subsidies didn’t, adding to the problem of supply outstripping demand.

Losing subsidies can cause short-term pain as New Zealand farmers found in the 1980s when we were dragged into the real world, but the medium to long term gains are worth it.

That we’ve already faced up to market realities is one of the reasons we have more to gain from the Trans Pacific Partnership Agreement (TPPA) than the USA:

New Zealand stands to reap considerably greater benefits from the Trans-Pacific Partnership trade and investment agreement (TPP) than the United States, says a new study of the controversial pact by economists at the World Bank.

However, the biggest long term benefits are likely to be in emerging economies like Vietnam and Malaysia, where a combination of manufacturers shifting production to their more competitive economies and structural economic reforms are expected to deliver more than in countries where many of those transitions have already largely occurred. . . 

The World Bank study estimates an increase in economic output for New Zealand by 2030 from TPP of around 3 percent, compared to less than 1 percent for the US and Australia.

New Zealand would be the fourth largest gainer behind Malaysia, Vietnam and Brunei, roughly equal with gains estimated for Singapore.

New Zealand could expect small increases of around 2 percent in output growth, with slightly greater gains in unskilled than skilled labour-intensive industries. . . 

Those opposing the TPPA are fighting against an agreement that will help developing countries and provide greater gains for unskilled workers here.

At least some of the opponents are ideologically opposed to free trade per se. They also ignore the costs of being outside this large and influential trade tent:

. . . Claims that New Zealand has given up sovereignty appear misinformed at best, highly politically-motivated at worst. 

The TPPA sets the rules for more than a third of the world’s trade. More than that, it will play a large role in defining the world we live in should it be voted through by each of the 12 member states.

And for New Zealand’s part in pushing the deal through, it seems likely we’ll take the auspicious role of hosting the document’s signing by all 12 member nations, next month.

But it seems prudent to ask – of those who have done the economic modelling – what would New Zealand look like if it was left behind? 

The World Bank Report is here.


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