National Farming Review - August 2012 by APN Media Services

AUGUST 2012

Fresh face: Federated Farmers newest board member

NATIONAL POLICY Confidence dip Global ecomony gives Kiwi farmers the jitters P8

Historic strategy Getting landowners on board is essential when protecting historic sites P9

REGIONAL POLICY Nitrogen loss Canterbury’s plan for nutrient loss management

ETS burden eases off agriculture — p3

Focus on the future

— p10

Provincial spotlight Transpower moves to secure transmission buffer zones in Northland P23

INDUSTRY GROUPS Rural roads Time for a culture change around drinking and driving

P15

Dairy pathways The different career pathways in the dairy industry

P18

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PER SP E CT I VE

To be green, be in the black

INSIDE Feature: Strategy for farming’s future 10

Regulars: Perspective . .

National Policy

3-6

Counterpoint

Regional Policy

8-9

Weather

Economy

Employment

Meat and Fibre

Dairy

16,18 17

Other Industry Groups Insider . .

Looking after the environment is important, but it’s easiest when you’re making a profit, writes Federated Farmers president Bruce Wills Twelve months ago I talked about the need for a more open, honest discussion around farming’s impact on the environment. A year on, I feel Federated Farmers and our farming community have made a lot of progress. We farmers do use the environment for our business; we also make a major contribution to the income and way of life all New Zealanders enjoy. There are genuine concerns about how some aspects of farming are affecting our water in particular and we must listen and act on these concerns. By being upfront about agriculture’s environmental issues, we gain better respect and credibility from those who care about how we look after this wonderful country of ours. In my view we have two options, we either accept we need to do better, lift our game and take leadership on these issues; or, if we choose not to, we risk more regulation. Councils are obliged to listen to the concerns of their communities; if farmers don’t react to these concerns councils are left with little option. Regulation is expensive, more officials to check that rules are met means higher rates. We farmers are also happier being in charge of our own destiny rather than being told what to do. It

is better, I think, we manage this ourselves. There are many already showing excellent leadership in this area. Recently, North Otago farmers Blair and Jane BRUCE WILLS Smith were President named national winners of the 2012 Ballance Farm Environment Award. They received the Gordon Stephenson Trophy in front of 300 guests at the New Zealand Farm Environment Trust’s Sustainability Showcase at the Parliament buildings in Wellington. Standing alongside them were eight other regional supreme winners, each deserving of the title of progressive, successful, environmentally conscious farmers. Time and again we find those who excel with their environmental management are those who are also financially successful. Behind these people are thousands of farmers who do their part to take better

Time and again we find those who excel with their environmental management are those who are also financially successful. care of the country’s land and water for the generations to come. One thing all these farmers will tell you is to be green, you must be in the black. Fencing waterways, planting trees, protecting biodiversity and putting in good effluent systems all cost money. If farmers aren’t able to grow and run profitable businesses, it constrains the investment they are able to make in these areas. Healthy finances are very much part of helping progress good environmental practices.

Farmers as doctors of the future Managing Editor: Conor English Ph: 04 494 9189 cenglish@fedfarm.org.nz Editor: Felicity Wolfe Ph: 04 494 9181 fwolfe@fedfarm.org.nz Memberships: Miriam Bravenboer Ph: 0800 327 646 mbravenboer@fedfarm.org.nz Advertising Sales Manager: Grayson Bell Ph: 07 834 4823 grayson.bell@apn.co.nz Advertising Sales: Nicola Jordan Ph: 07 834 4650 nicola.jordan@apn.co.nz ■ ISSN 1179-4526

Our Cream of the Crop Awards at the Federated Farmers’ national conference in June highlighted some of the fantastic talent and expertise there is in New Zealand farming. All the winners demonstrated a strong commitment to sustainability and profitability in a very practical way. This was contrasted with the United Nations Rio+20 conference on sustainability I recently attended alongside 50,000 people from 190 nations. I was there as an official Government delegate and as part of the World Farmers’ Organisation team. I was a reluctant participant in what I thought would be an extraordinary talkfest between well-meaning people and governments. There were several parts to it; the outcome document text negotiated between governments, various speaker events, politicians and online engagement. Being involved in the text, which was cut from 80 pages to 283 paragraphs and 49

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pages, was fascinating. I learnt a lot. While some criticised the declaration as not concrete on some issues as many, including New Zealand, would have liked, the only CONOR ENGLISH way to get more Chief executive done would be to get the military involved! Consensus takes more time. Our interest in being there, as well as learning from others, was to promote New Zealand’s trade agenda and look at sustainability, climate change and subsidies in agriculture, fisheries or energy. A key message I took home was, the debate is not about whether we have growth, but how we have growth.

The argument that growth is bad is simply outdated and irrelevant. With Earth’s population growing by 2 billion by 2050, we have to adapt and grow to cope. In Europe and the United States, political contests are about who can actually provide real growth, as citizens seek to retain First World living standards. No one is marching in the streets to continue the recession. Looking back, I am unsure how much positive difference such conferences make, although reality will eventually force the hands of reluctant parties. On the other hand, our award winners, like most farmers, make a difference every day by harvesting the environment in a sustainable, profitable way. New Zealand farmers need to look for the opportunities. Given the growing population and interest in healthy eating, ‘‘farmers as doctors of the future’’ may be something to aspire to.

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August 2012 National Farming Review

NA T IONA L POLICY

Farmers and environment win with ETS amendments By Jacob Haronga Federated Farmers senior policy advisor The Government has promised that agricultural biological emissions will remain outside the Emissions Trading Scheme (ETS) until at least 2015. This is a huge win for New Zealand’s farmers. It was part of a package of proposed amendments which will lessen the cost of the scheme on agriculture, encouraging growth. It follows continued hard lobbying of Government by the Federation to ensure farmers are not being unfairly treated compared to their international counterparts. Initial estimates by the Prime Minister of the cost of the previous government’s ETS was around $30,000 for the average farmer. This is now substantially reduced. The Government is to make three significant changes: ■ Delaying any decision on the entry of biological agricultural emissions to the ETS until the next review of the scheme in 2015. Current legislation would see biological emissions enter the ETS in 2015, regardless of whether cost-effective mitigation technologies are readily available, or other countries have moved to impose similar obligations on their own farmers. ■ Allowing “offsetting” of forests, so pre-1990 forests can be effectively moved to where it makes more sense for them to be. This marks a big step towards farmers and foresters managing their land in a way which sees land put to best use. ■ Transition measures currently in place to minimise the cost impact of the ETS are proposed to extend beyond this year. The measures include the one-fortwo surrender obligation and the $25 tonne price cap. These are vital for New Zealand to mitigate against the effects of the inconsistent efforts on climate change among other countries. Other proposals will improve the treatment of forestry under the ETS by allowing minor clearance of forest boundaries, extending the deadline for the filing of emission returns to six months and easing restocking requirements for predominantly indigenous regeneration or erosion control

The Productivity Commission is conducting an inquiry into local government’s regulatory performance. Submissions are due on August 31 and Federated Farmers will be submitting on the Commission’s Issues Paper.

Federated Farmers has presented its submission on the Building Amendment Bill (No 4) which makes changes to the Dam Safety Scheme to reduce compliance costs for dam owners. The Federation supports the changes.

Livestock tax

The detail of the Government’s changes to livestock tax rules will be contained in an Income Tax Bill to be introduced to Parliament. The Federation supports the intent of the changes, but is looking at the details to ensure farmers are treated fairly. TAKING NOTE: Climate Change Minister Tim Groser, pictured at his Titirangi home, has listened to Federated Farmers call for commonsense to prevail around biological emissions and the ETS.

plantings of poplar and willow. However, while these and other proposals are greatly appreciated, the Government is also proposing amendments which still require some attention, particularly a potential levy on vehicle licencing and some rules around forestry units. The announcement compliments work already underway in the agricultural sector to look to reduce emissions. Significant money has been invested in research, both domestically and internationally, through the Global Research Alliance on Agricultural Emissions, which involves 33 countries and was instigated by New Zealand Climate Change Minister Tim Groser. Farmers also continue to invest and drive for improved farm productivity to produce more with less inputs and environmental effect. New

Zealand farmers are already highly efficient comparded to other producers, so continued growth here will work to reduce global emissions. Irrespective of agriculture’s biological emissions, progress is being made in all aspects of the industry, because reducing emissions is simply good business. Fonterra, for example, has a target of a 20 per cent reduction in emissions intensity right across its supply chain by 2020. It is also important to note farmers, like other New Zealand business, currently pay for ETS carbon emissions, through carbon costs on fuel, energy and farmers’ share of the carbon cost being paid by processors. The draft legislation containing the changes should be tabled in Parliament later this year and Federated Farmers continues to work towards ensuring the best possible outcome for farming.

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SH ORT C U T S

Good high country outcome After a prolonged battle, including the Minaret case in the Land Valuation Court, high country farmers are celebrating the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Act passing its final parliamentary stage. It clarifies pastoral lease farm rents are to be based on pastoral rather than landscape values.

Tough choice

The five finalists in the Allflex/ Federated Farmers Agribusiness Person of the Year were; LeaderBrand founder Murray McPhail, Progressive Meats founder/managing director Craig Hickson, Baker No-Tillage founder, Dr John Baker, Miraka chairman Kingi Smiler and Ravensdown CEO Rodney Green. Craig Hickson won the award.

National Farming Review August 2012 www.fedfarm.org.nz

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N AT IONAL P OLI CY

Vehicle compliance costs under review By Kara Lok Federated Farmers policy advisor In a move to reduce compliance costs for vehicle owners, the Ministry of Transport (MOT) and New Zealand Transport Agency (NZTA) are undertaking a review of New Zealand’s vehicle licensing system. The reform, which Federated Farmers is involved with, is in line with the Government’s ‘‘better regulation, less regulation’’ strategy. The current licensing rules have been in place for 30 years and MOT and NZTA are determining whether they are still relevant. The reform has been split into three parts: Annual Vehicle Licensing (AVL), Transport Service Licenses (TSL) and the warrant and certificate of fitness systems (WOF/COF). At present vehicle owners are required to license their vehicle annually. The AVL can be purchased in one go or broken into smaller increments. It includes the annual Accident Compensation Corporation (ACC) motor vehicle levy, which makes up about 69 per cent of a petrol vehicle’s annual license, $287.75, and about 75 per cent of a diesel vehicle’s annual license, $417.61. Federated Farmers wants the ACC levy taken out of the Annual Vehicle License fee and collected elsewhere.

As a result, Federated Farmers believes TSLs may be an unnecessary bureaucratic imposition. There are plenty of other systems, such as motor vehicle registration, driving licensing and the operator rating system (ORS), WOFs and COFs, allowing police and NZTA to identify and discipline poor operators. At present small vehicles over six years old need to get a WOF every six months and larger vehicles and passenger service vehicles require a COF every six months. NZTA and MOT are considering reducing the frequency of both licenses. Road safety is important and farmers running older vehicles requiring COFs sometimes rely on six-monthly checks to ensure their vehicles are safe. Moves to change the frequency of checks will need careful consideration. Federated Farmers is also concerned that reducing the frequency of checks may reduce the viability of rural service centres and testing stations. This reform has the potential to affect anyone who owns a vehicle. A discussion document detailing the proposed changes is due to be released later this month for public consultation. Federated Farmers will seek its members’ views to inform its submission. Government is expected to make a final decision in December.

EASING THE REGULATORY BURDEN: Thanks to regulatory reform, the cost of getting farm vehicles licensed will decrease.

Both MOT and NZTA are considering this option. NZTA and MOT are also considering whether there is still a need for TSLs. There are three types of TSLs: goods service, passenger service and a vehicle recovery TSL. These were introduced to ensure transport operators understand health and safety

requirements and to enable NZTA to remove bad operators. In practice this has not happened. It has proven extremely difficult to bar a company from operating. Instances of misconduct are difficult to prove and even harder to tie to one person. In some cases barred operators got another TSL under a different name.

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August 2012 National Farming Review

NA T IONA L POLICY

Local Government Bill progresses By Katie Milne Federated Farmers local government board spokesperson In April the National Farming Review looked at Federated Farmers’ calls for local government reform and bringing rates increases back down to earth. At the time it was uncertain whether the reforms would carry the same emphasis given by then Minister of Local Government, Nick Smith. Thankfully, his successor to the role, David Carter, stayed faithful to Dr Smith’s vision of a more focused and efficient local government sector. Given the impact councils and their costs have on farmers, it is very helpful the Minister for Primary Industries is also the Minister of Local Government. Mr Carter’s commitment at Federated Farmers National Conference, that the next step will be local government funding reform, was hugely encouraging. This is hugely important for farmers. As the Federation has repeatedly pointed out, the land and capital value system of funding local government places an ever-increasing burden on farm businesses, entirely detached from either income levels or benefit from local services. Many farmers pay general rates in excess of $10,000 a year for a business with modest returns. In the meantime, the Local Government Act Amendment Bill is proceeding through Parliament as the first stage of the reforms. This should be passed by the end of the year. Federated Farmers is submitting on the Bill and we look forward to our date with the Select Committee. Two of the Bill’s key provisions are the purpose of local government and amalgamations.

Regarding the purpose, the Bill replaces the current Act’s purpose statement, which calls for the broad promotion of the ‘‘four well-beings’’ — social, cultural, environmental and economic — with a commitment to ‘‘meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in the way most costeffective for households and businesses’’. This is a big improvement on the current purpose statement, especially the inclusion of the words ‘‘costeffective for households and businesses’’. In our view, the inclusion of the four well-beings in local government’s current ‘‘job description’’ encouraged many councils to be involved in activities outside their ‘‘core business’’. These range from motor racing and football matches to festivals and flower shows. Also, significantly, it made it harder for councils to say no to demands for increased spending in their core areas. For example, much ratepayer money has been poured into new or expanded stadiums, aquatic centres, theatres, museums and art galleries. These are all worthy facilities, but are they as critical as roads, water, sewage and rubbish? Regarding amalgamations, the Government reckons the current Act’s provisions are lengthy, complex and the chances of success are low. If passed in its current form, the Bill will make it easier to advance and implement proposals to merge councils. The Federation has no national position on local government re-

CORE BUSINESS?: Federated Farmers is pushing for the review of Local Government to re-focus councils on essentials such as new sewerage infrastructure rather than flower shows.

structuring. Any decision on supporting or opposing proposals are made on a case-by-case basis at a local level, weighing up the pros and cons for farmers. The changes in the Bill may or may not be a good thing depending on individual circumstances. One worry for some rural people is the risk their small council will be swallowed by a larger neighbour, against their wishes. The Federation agrees this is a risk and is pleased the

Bill requires the Local Government Commission to be satisfied there is ‘‘significant support’’ for reform in the smaller council. This provision should help, but whether it makes a meaningful difference will not be known until proposals are advanced and the law tested. Overall, though, the Federation supports the Bill and we are looking forward to it passing. Then we can get on with the big job of reforming local government funding.

Conference debates powerlines, ownership By Mark Ross Federated Farmers general manager, policy and advocacy Unlike previous years, only a small number of remits and formal discussion items were raised at Federated Farmers 2012 National Conference and AGM. On the agenda were transmission line buffer zones, animal welfare compliance, foreign ownership of land, rural delivery and the establishment of a

primary producers’ consultation forum. Most discussion was centred on the changes to the utilities section of district plans that creates additional buffer zones around transmission lines. It was agreed by delegates that Federated Farmers will continue to moderate Transpower’s demands on district plans to ensure landowners retain rights to their property and that buffer zones sought are not excessive

or disruptive to farming operations. Foreign ownership also created some good debate, with an agreement reached that the National Board will keep a watching brief on developments to ensure Federated Farmers’ current policy remains valid. The policy is that overseas investment in New Zealand is beneficial and supported, but concern is expressed with overseas corporations looking to purchase multiple productive farms.

On the animal welfare compliance, rural delivery and development of a consultation forum it was agreed that Federated Farmers’ policy team would continue to liaise with targeted groups to ensure our members’ views were articulated. The emphasis remains on the Federation having a strategic vision of policy leadership and advocacy becaus it is important it remains at the forefront of policy development.

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N ATIO NAL P OL I CY

Katie Milne: Stepping up for Kiwi farms Waiting for other people to come up with solutions is not the style of Federated Farmers’ newest board member, Katie Milne, writes Felicity Wolfe.

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A proud West Coaster and small-scale dairy farmer, Katie Milne first got involved with the Federation and agricultural politics because she wanted to find out more about the Resource Management Act and how it was going to affect her and partner Ian Whitmore’s farming business. Rather than wait for somebody else to step up, Milne’s can-do attitude prompted her to get involved with the Federation and bring her own influence to the process. She moved up through the ranks of the dairy section to be elected as the West Coast’s provincial president in 2009 and was elected to the national board at the Federation’s National Conference and AGM in June. Milne aims to encourage younger farmers to bring their enthusiasm to the Federation. ‘‘We need more young farmers to step up and bring their ideas and ambition to the organisation,’’ Milne says. ‘‘We have a wealth of experience and wisdom in the Federation, but to look

KATIE MILNE: ‘‘If you leave things to other people and they don’t come up with the solution you need, then you have no one to blame but yourself.’’

forward to how New Zealand’s agriculture will be run in 20 or 30 years we need the young people who will still be farming to contribute their take on solutions to our industry’s many issues. ‘‘If you leave things to other people and they don’t come up with the solution you need, then you have no one to blame but yourself.’’ It was this self-sufficient, yet community-minded, view that prompted her to get involved with the Federation. ‘‘I had seen what effect decisions made in Wellington had on forestry in our region. I did not want to see West Coast farming go in the same direction,’’ Milne says. Over the years, Milne has worked

extensively on local government plans around the West Coast, especially around property rights issues arising from the introduction of Significant Natural Areas and wetland protection. ‘‘Much of the West Coast has been locked away from further development, so we have to retain as much as possible so future generations can continue to farm here,’’ she says. Her negotiation skills and techniques were honed during years of dealing with lawyers, planners and council staff in Environmental Court proceedings. Increasingly these are fellow women who are well educated, articulate and very savvy, Milne says. ‘‘Working with these professionals

requires a more communicative and collaborative method for resolving issues. ‘‘We have to approach negotiations differently than 10 to 15 years ago. That does not mean the Federation is not prepared to put a line in the sand to protect farmers’ interests when need be, but being more open to dialogue is a far better way of starting the process.’’ While her work for the West Coast Federation has kept her busy, she has also been on the Westland TBFree committee which has overseen a huge reduction in bovine tuberculosis (Tb) outbreaks which used to be rampant in the region. ‘‘We are now moving into a followthrough phase with the aim of stamping out Tb once and for all.’’ Being part of a small community has also prompted her to participate and give back as much as she can; Milne is part of the local volunteer fire brigade and coached netball at her daughter’s school before she went to Lincoln University. Outside of work and volunteering, Milne enjoys a range of outdoor challenges, from skiing to scuba diving. Of course, as a Coaster, she loves disappearing off to a whitebait stand when the season is on. Due to demands of her new role, she is well aware the immediate future’s catch may be halved. ‘‘I was not made to sit indoors, so farming has been the perfect career for me,’’ Milne says.

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August 2012 National Farming Review

COU NT E RPOINT

Primary sector attacked from all sides The challenges farmers face equate to more than just low exports and the Global Financial Crisis, writes Winston Peters. There is an old military maxim that warns against fighting a war on two fronts. But right now it’s much worse than that for the New Zealand primary sector which is contending with heavy economic flak on three fronts — and a fourth is looming. First, the world economy has not recovered from the Global Financial Crisis. International trade and economic growth is still suffering and there appears no end to the bleak outlook in the foreseeable future. The recession was triggered four years but the consequences of the financial and economic crisis are still being felt. For our exporters this means weakening demand for many of our products. Second, the agricultural sector is struggling with New Zealand’s chronically overvalued exchange rate which makes our products expensive and less affordable for overseas markets. The third front that completes a black future is the National-led Government’s woeful incompetence in areas that are of critical importance to the primary sector. The recent release of the investigation into how the Psa kiwifruit virus entered New Zealand was an indictment of border control failure. There was inadequate screening of imported goods that posed a biosecurity risk.

As a result of the Government’s biosecurity failure, an estimated loss of up to $400 million to the kiwifruit industry over the next five years. It will spell ruin for many individual WINSTON PETERS growers. New Zealand First The dairy secleader tor is also facing gloom. Prices are at their lowest level in almost three years. It is only an increase in production that is helping offset the price declines. We all know that dairy is our singlebiggest export sector, and milk powder our single-biggest export product. The challenges facing the dairy sector are large, but not insurmountable. Action is needed now to address the root cause — an overvalued New Zealand dollar. Everyone, from the International Monetary Fund to local economists, agree our exchange rate is overvalued by about 20 per cent. It is crippling our international competitiveness and severely distorting and damaging our

economic prospects. The Government is content to sit by and let its money speculator chums make astronomical profits by dealing in our dollar as a commodity. Make no mistake, this is damaging our tourism, manufacturing and exporting industries. New Zealand First has a solution. We have legislation prepared that would give the Reserve Bank the flexibility it needs to promote growth, employment and our export base. It would expand the Reserve Bank’s focus from its current responsibility for keeping the rate of annual inflation between 1 and 3 per cent. That is the historical role of the Reserve Bank that was legislated for in the 1980s during the time of rampant inflation. But inflation has not been a major problem here for a number of years, yet the Reserve Bank still operates as if it is. The legislation prepared by New Zealand First would allow the Reserve Bank to take a wider view of the economy and tackle our overvalued dollar head-on. We aren’t saying that restricting inflation isn’t important, but it is just one aspect that should be considered by the Reserve Bank when it sets monetary policy. We have twice tried to introduce the

legislation into Parliament and both times National refused. The fourth front looming for the primary sector is the Emissions Trading Scheme (ETS). Its implementation has been slowed down by the National Government, — but only slowed down. They are just delaying the blow to the farming community and industry so their paper-shuffling mates behind the ETS can make even bigger profits. We are realistic and know the ETS would mean higher domestic commodity prices as farmers are penalised with another tax. A much better way to achieve a reduction of greenhouse gases is to identify problem areas and target appropriate responses through research and development. In other words, address the issue by direct action from government and industry and not by making huge payments to an ETS in which faceless outsiders and non-compliant nations will profit at the expense of our industries and workers. It would lead to the introduction of cutting-edge technology to combat environmental problems which would be a win-win situation for New Zealand producers and the environment.

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REGIO NAL P OLI CY

Partnership key to heritage protection By Matt Harcombe Federated Farmers South Island policy manager A recently introduced Bill looks to reform the way New Zealand looks after its old treasures. The Heritage New Zealand Pouhere Taonga Bill, among other things, renames a restructured Historic Places Trust and aligns processes for protecting heritage more closely with the Resource Management Act. By world standards, even the oldest human influences in Aotearoa are very recent, but that does not make our history of human occupation any less important. It is critical to look after the evidence of early human occupation and continue to retain special living pieces of our progression throughout history. Looking after historical buildings and sites is important, but there has to be some priority placed on what we look after, who should manage it and how and, equally importantly, who should pay for it. Federated Farmers’ submission on the Bill asks for no statutory advocacy role for Heritage New Zealand. The Bill’s purpose is to set a platform for a more balanced conversation between protection and the economic use of particular sites and more transparent processes for determining whether a site is worthy to be categorised as a historic place.

HERITAGE STATUS: Evidence of New Zealand’s human habitation, such as this pa site in the Papamoa Hills near Tauranga, should be preserved, but landowners need to be taken into consideration too.

There were key threads in our submission tied closely to recurring issues landowners face during resource management processes and the implementation of the Resource Management Act. One of those is about legislation empowering partnership-based approaches to protection, not litigation. This might sound familiar to those who

have worked closely and positively with government departments to look after a stretch of river or bush only to find other staff in the same department advocating for district or regional plan rules on that area. Federated Farmers is concerned the Bill effectively sets up the same scenario with Heritage New Zealand, requiring it to be both a statutory

advocate in the planning process and a legislated administrator and protector of historic places and things. This scenario immediately sets up a tension between working with the owners of historic sites to protect and manage them and advocating for rules to say owners cannot make changes to that place. An emerging trend around the country is for advocates in the planning process, such as landscape architects and, in response, councils, to identify and seek to manage amenity landscapes through rules. These ‘second tier’ landscapes supposedly contain cultural and heritage aspects. The Historic Places Trust currently also has a role advocating for heritage. Recently it has become an active player in resource management processes, asking for rules to protect rural landscapes which give ‘context’ to historic sites or that were home to important events in New Zealand’s brief human history. Federated Farmers considers it critical that the Heritage New Zealand Bill sets the platform for these conversations to happen directly between landowners and the organisation responsible for managing them, not through advocacy which will put yet more lines on maps and more rules in plans.

N AT IONAL P OLI CY

Farmer confidence takes a tumble

The Federated Farmers’ July 2012 Farm Confidence Survey shows farmer confidence entering the 2012/13 season has been hit by reduced farm gate and commodity prices, reports Nick Clark, Federated Farmers general policy manager. The six-monthly Farm Confidence Survey, undertaken at the start of July, gives the Federation a clearer picture of how farmers feel about and are responding to the economic climate. The key findings from the survey show: ■ A net 38.7 per cent expect general economic conditions to worsen over the next 12 months, down 34.3 points on January. ■ A net 39.5 per cent expect their own farm’s profitability to worsen over the next 12 months, down 71.1 points on January. ■ A net 30.4 per cent expect to increase production over the next 12 months, down

17.3 points on January. ■ A net 3.6 per cent believe they will reduce on-farm spending over the next 12 months, down 37.1 points on January when a net 33.5 per cent expected their spending to increase. ■ A net 26.3 per cent expect their farm debt to reduce over the next 12 months, down 18.0 points on January when a net 44.3 per cent expected their debt to reduce. ■ A net 13 per cent found it harder to find skilled and motivated staff, up 1.8 points compared to January’s net 11.2 per cent.

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The drop in confidence is not a surprise. The 2011/12 season was one of the best in recent history for dairy, meat, and wool, with high farm gate prices and great growing conditions in most of the country most of the time. However, the falls were dramatic. The past few months have seen a large drop in commodity prices, with the June 2012 ANZ World Commodity Price Index down 12.3 per cent on its level in January. The exchange rate has not fallen to the same extent, so the NZD Index was down 10.4 per cent on January. Forecasts for the 2012/13 season were for prices to

reduce from their peaks. Will prices fall further? The global economy is far from settled. New Zealand is not as bad as Europe and North America, but the ongoing global malaise is keeping our dollar higher than it should be. Also, is the scope for higher production to offset falling prices? This depends on the weather, especially in areas without much water storage and irrigation. Farmers are resilient and markets have risen and fallen many times before. They will be hope 2012/13 is a ‘bump in the road’ and that brighter medium-term forecasts come true.

Ph 0800 327 646 www.fedfarm.org.nz

August 2012 National Farming Review

RE G IONA L POLICY

Managing Canterbury’s nutrient loss By Lionel Hume Federated Farmers senior policy advisor Water quality and the management of nutrient losses from farms is a hot topic, with recent media and public scrutiny on the Rotorua Lakes, Lake Taupo, the Waikato and Manawatu rivers, Te Waihora/Lake Ellesmere in Canterbury and Waituna Lagoon in Southland. Each has invoked a range of responses from the public and councils. In its attempts to implement a new regional plan to set limits on the loss of nutrients from farms, Environment Canterbury (ECan) has headed down a different path from other regional councils. Its new Land and Water Regional Plan sets region-wide objectives, policies and rules, including default limits, to manage nutrient discharge. These limits will apply until catchmentbased sub-regional plans are developed in conjunction with Water Management Zone Committees and in consultation with local communities. The nutrient discharge provisions of the plan have far-reaching effects on farming. Federated Farmers and a number of other primary sector groups have been in constant discussion with ECan throughout the development of the plan. The current iteration has improved considerably as a result of those discussions, but still has the potential to prevent or severely curtail land-use change, especially where it involves irrigation development. The plan provides for a transition period of five years, during which existing landuse is permitted. In this time, farmers are required to gain a better understanding of how much nitrogen they are losing, using Overseer, and how to manage that loss.

However, new land-use activities — effectively, where new or additional water is applied for — without nitrogenleaching conditions on their water permits will require consents. In Red Zones which do not meet water-quality standards, including much of the Canterbury plains, or Alpine Lake Zones, such activities will be noncomplying, where the presumption is that a consent will not be granted. From July 2017, existing activities are permitted only if their nitrogen losses do not exceed the relevant look-up table value, based on good management practice. If average annual loss of nitrogen is 20kg/hectare per year or more, existing activities will also be required to have a farm environmental plan, which is subject to external audit. This opens the way for audited self-management approaches linked to industry or irrigation scheme environmental audit programmes. Federated Farmers believes audited self-management approaches will be a more effective way of improving environmental performance than detailed prescription through plan rules and resource consent processes. The primary production sector will be empowered to take responsibility for improving the environmental performance of existing members and requiring the high performance of new entrants. These approaches rely on the development of effective industry and irrigation scheme programmes, and developing public confidence that these programmes will deliver the required improvement in environmental performance. We have five years to do this.

RIGHT SOLUTION?: Setting regionwide nutrient loss limits based on Overseer raises some questions.

Show your environmental farm leadership The supreme winners of this year’s Ballance Farm Environment Awards, North Otago farmers Blair and Jane Smith, say just entering is a fantastic experience that helps farmers evaluate their farm business’ direction. As of August 1, the New Zealand Farm Environment (NZFE) Trust, of which Federated Farmers is a member, is accepting entries for the 2013 awards. Federated Farmers’ chief executive Conor English says the Federation is proud to support the awards which showcase environmentally, economically and socially

sustainable farming. Mr English says these are the qualities the Federation champions for the future of agriculture. NZFE Trust chairman Jim Cotman said the Smiths were chosen from an outstanding group of regional winners who clearly proved ‘‘they have what it takes to be profitable and sustainable guardians of our natural resources’’. The 2013 competition opened on August 1 in all regions and entry forms are available from the NZFE website at www.nzfeatrust.org.nz. Jamie Strang, national judging co-

ordinator for the Ballance Farm Environment Awards, says many farmers use the awards to benchmark their sustainability progress. ‘‘It’s a great opportunity for farmers to discuss their business with a team of skilled judges who want to understand their farming philosophy and why they make the decisions they do,’’ Mr Strang says. Judging is an ‘‘inclusive process allowing farmers to test their ideas without fear or prejudice’’. Mr Cotman says the 2012 awards

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National Farming Review August 2012 www.fedfarm.org.nz Ph 0800 327 646

FE ATUR E

Strategy 2.0: Profitable

A refreshed strategy for Federated Farmers was launched at the Federation’s 2012 national conference and AGM, with the focus firmly on profitable and sustainable farming. Felicity Wolfe looks at what this means. There may be uncertainty around the global economy as farmers head into the 2012/13 season, but Bruce Wills is confident Federated Farmers has the right strategy to help its members achieve a profitable and sustainable future. This year, Wills and the Federation’s chief executive Conor English headed a project to review the organisation’s strategy and policy objectives. ‘‘Our mission has always been to look after the interests of our farmer members and to be their voice, but we wanted to sharpen the focus,’’ Wills says. ‘‘Resources are limited so we needed to make sure we have our priorities clearly defined, so we know we are delivering the best service and value.’’ ‘‘Volatility and uncertainty are the new normal in a world struggling to adapt to the global financial crisis,’’ English says. ‘‘At the same time we have significant demographic change locally and internationally, which is both a threat and an opportunity. ‘‘Successive Governments have worked hard to get access to new and growing markets. Food and water are becoming scarcer, so at a macro level our medium-term outlook is positive. ‘‘However, there are plenty of policy risks and issues that need to be managed at international, national, regional and sector level.’’ Wills and the board have worked to build bridges between the rural heartland and urban New Zealand. This has included being open and upfront about agriculture’s environmental responsibilities and communicating what farmers are doing to increase their

environmental sustainability. The Federation will continue to push the environmental message, but Wills is equally focusing on the financial sustainability of farming and its importance to the economy. ‘‘The New Zealand economy is hugely reliant on agriculture. The primary sector produces more than two-thirds of our exports, which helps pay the bills. ‘‘Yes, we need to focus on environmental issues, but farm profitability is absolutely critical as well. Federated Farmers exists ‘to influence decision-makers to create better outcomes for profitable and sustainable farming’. That is our focus,’’ Wills says. In June, Wills and English attended global events which reaffirmed the Federation’s path. Wills participated at the World Farmers Organisation (WFO) forum in Rome, with food security high on the agenda. He said listening to global concerns reaffirmed New Zealand’s place as a global farming leader, from the environmental to production efficiency. Of the 40-plus countries represented, few support free trade but being there showcased how an open market economy is beneficial for agriculture, encouraging innovation and productivity. ‘‘Many countries are looking for ways to increase food production because they are reliant on food imports to feed their own populations. That is where New Zealand agriculture has a lot of valuable intellectual property.’’ Rome also proved the adage that poor countries are not green. Rubbish piled up in the city’s parks and the Tiber River was very

LEADING ON ALL FRONTS: President Bruce Wills announced a refreshed Federation strategy at Federated Farmers’ national conference.

polluted. The lesson for New Zealand was clear. ‘‘A thriving country has more money to advance and support environmentally-friendly projects. Thriving farmers are more able to invest in environmental protection works such as riparian planting and retiring land for regeneration of bush. You must be in the black to be green,’’ Wills says. English was part of the World Farmers Organisation group and an official delegate of the New Zealand Government at the Rio+20 United Nations Conference on Sustainable Development. ‘‘Sustainability can mean many things to different people, but one thing was clear — money matters,’’ English says. ‘‘There was debate around whether food security meant selfsufficiency and was anti-trade or pro-trade. Fortunately, we got the free trade message in there. ‘‘One issue there was no debate on was growth. Here, we seem to be arguing over whether growth is good or not. At Rio they are past that — they all want growth. The

question is how you get that.’’

Complex political environment ‘‘Many people don’t quite understand the complex political environment the Federation operates in,’’ says English. ‘‘New Zealand has 4.5 million people, 3m of whom are voters and 35,000 are commercial farmers. Central and local government involves about 54,000 people in administration. There are 121 MPs, 28 Cabinet Ministers, 14 Cabinet committees, 13 select committees and 212 central Government entities.’’ At local government level, New Zealand also has 78 councils, including 11 regional, 12 city, 54 district and 6 unitary councils. Wills says Federated Farmers works with nearly all of these and is represented in more than 60 groups at national level, and many more at regional and sector level. There is international work as well. ‘‘We deal with 300 to 500 issues

at any one time,’’ Wills says. ‘‘We work with all political parties and views, to get good outcomes. Farmers may not realise we are the largest policy shop outside of Government departments. Last year we presented 100 submissions in 100 days.’’ ‘‘As well as identifying problems, we are very focused on solutions. When the issues are actually very complex, this is not easy,’’ English says.

Federation is ‘a business’ While lobbying and running a farm are different, English points out that like any other business Federated Farmers needs a solid strategy. The new plan focuses on four critical areas of the Federation: ■ Policy and advocacy success: Policy development, advocacy, visibility/communications. ■ Pan-industry leadership: Provincial strength, celebrating success, leadership capability. FARMREV-JAN12

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August 2012 National Farming Review

F E A T U RE

and sustainable farming INTERNATIONAL PICTURE: Federated Farmers chief executive Conor English with World Farming Organisation director Dr Marco Marzano De Mari at the United Nation’s Rio+20 sustainability conference in June.

LOCALLY GROUNDED: Federated Farmers national president Bruce Wills talks with hill country farmers in Taumarunui about finding environmental solutions.

■ Provide farmer support: Farm business products and service, adverse events, foster support organisations. ■ Ensure Federation’s financial strength: Membership growth and retention, efficient organisation, non-membership revenue. ‘‘We just have to stay focussed and get on with it. We have over 60 staff and thousands of passionate elected and volunteers, so it’s quite a machine,’’ English says.

Policy objectives

Wills says there are many issues which impact farming, both positively and negatively, so the Federation needs to focus on its job. To help define this, it has two major policy objectives with a high-level list of issues. These are: 1. Profitable Farming — New Zealand needs a viable, profitable farming sector to remain a First World country and to increase its wealth. The Federation focuses on influencing decision-makers regarding;

■ Expenses: inputs, rates, banks, tax, immigration ■ Incomes: farm gate returns, supply chain, trade access, market structures, fiscal/monetary policy ■ Compliance and regulatory frameworks. 2. Sustainable Farming — Farming is the backbone of the nation’s development and progress. The Federation focuses on the frameworks needed to ensure future generations can farm. These include: ■ Environmental sustainability ■ Urban rural relationships ■ Infrastructure — roads, data/ broadband, electricity lines ■ Water — ownership, allocation, management, quality, storage ■ Farm succession ■ Energy ■ Bio-security ■ Safe food ■ Animal welfare ■ Skills/ human capability ■ Research /innovation ■ Rights in property ■ Capital availability and cost ■ Local government reform

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■ Adverse events ‘‘Of course, each issue has many strands to it and they vary. What is pleasing is we have had significant and material wins,’’ Wills says.

Policy promotion

Many farmers don’t realise that, as well as arguing against poor policy proposals, the Federation also promotes good policy outcomes. ‘‘One example is the Rural Broadband Initiative (RBI),’’ English says. ‘‘It is critical for rural communities to have broadband infrastructure in place if farming is to continue to compete in overseas markets, encourage people to live in the countryside, enhance learning, social cohesion and health outcomes. Politicians need to understand — rural people are people too.’’ Originally, the Government only allocated $48m for the rural sector. After significant lobbying, rural gained an additional $250m. Also, through the tender process, tenderers committed further investment. The result is rural areas now have a similar investment level as the urban.

Climate change, global warming

The recent announcement of the Government’s proposed changes to the Emissions Trading Scheme (ETS) deferring any decision on biological emissions until 2015 is a win for the Federation, for farmers, and the environment, after three years of lobbying. While the Federation lobbied against the ETS, it lobbied for and supports other, potentially better, solutions for farming and the planet. ‘‘The Federation supported Government setting up the Productivity Commission to examine how, as a country, we can improve our productivity which would reduce emissions,’’ says English. ‘‘We lobbied hard for water storage which saw the Government commit $435m to feasibility and potential storage projects.’’ Projects such as the proposed Ruataniwha Water Storage project in Hawke’s Bay would bring certainty to drought-prone areas, securing farmers’ incomes so they can invest in better infrastructure and environmental improvements. ‘‘We supported the Government’s climate change coalition of 33 countries investing in research on emission reduction and we lobbied successfully to get more money into the Primary Growth Partnership to improve farmers’ productivity, reducing emissions.’’

Other policy work

Other issues include working with the Ministry of Transport to review the Motor Vehicle Registration and Road User charges. There have been commonsense changes to cut down paper-work and costs for agricultural vehicles. Federated Farmers successfully argued against logbooks for tractors and buntings around all diesel tanks. At the local government level, the Federation is the only organisation submitting annually to over 90 per cent of the country’s local authorities. ‘‘Also, after sustained lobbying, a package of reform for the local government sector should see positive outcomes,’’ Wills says. There is also a watching brief on what banks are up to with regard to farm lending levels and interest rates. Back when the OCR reduced

from 8.5 to 2.5 per cent, the Federation fought for benefits to be passed on to farmers. With $47 billion of farm debt, every 100 basis points is worth $470m cash. To help farm succession, the Federation lobbied for the removal of gift duties. Federated Farmers is proactive on water management, participating in the Land and Water Forum (LAWF) to ensure realistic expectations around farmers’ capacity to enact any regulations. The Federation’s message is, while there are no one-size-fits-all solutions for farming’s challenges, farmers will work to get satisfactory outcomes to suit all. The Federation encourages other industry sectors and society to acknowledge their part in ensuring future generations have clean water. Industry sector success is another priority. ‘‘Four years ago, when lamb prices slumped to an all-time low, Federated Farmers started the T150 campaign, targeting an average $150 value on mid-season lambs,’’ Wills says. ‘‘This set an aspirational target for the sector and pleasingly, over the last season many farmers achieved these prices, though this year appears more challenging.’’ Federated Farmers lobbied successfully for Fonterra’s second vote on the Trading Among Farmers proposal. ‘‘It is important farmers are treated with the respect of any shareholders and given all the information they need to make an informed decision.’’ There are many more issues the Federation is working to influence decision-makers for better outcomes for farming.

The future

While on-farm sentiment may have dipped in the last six months, Wills is very upbeat about agriculture’s future. ‘‘We have the water, we have the land and we have innovative and highly-educated people. The demand for high-quality food will only increase. Federated Farmers is on a strong growth path, we are achieving good results for farming and New Zealand.’’

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National Farming Review August 2012 www.fedfarm.org.nz Ph 0800 327 646

W E ATHE R

From anticyclones to active westerlies By Daniel Corbett MetService weather ambassador The winter so far has had a bit of variety with polar outbreaks, large anticyclones, moisture-laden Tasman Sea fronts and broad troughs. The anticyclones were the dominant feature during the late part of April, much of May and into the first few days of June.

July’s weather events

MIXED: July was a mixed month with lots of rain in the north, and southern frosts.

did extend from the Coral Sea down to the Kermadec group has relaxed to normal. The waters around New Zealand are also about average. Global models are picking the current neutral conditions to begin to develop into El Nino conditions over the next several months. Conditions in the central Pacific are currently in-between a La Nina and an El Nino, indicating more variability in our weather. In the shorter term the active westerlies will keep the weather systems rolling in from the west across New Zealand every few days interspersed

persistent rain. By mid-month another large anticyclone brought settled weather again to much of New Zealand.

Winter’s outlook

Equatorial sea surface temperatures have continued to warm over the past month and the area of above-average sea surface temperatures over the eastern Pacific has now begun to slowly extend westwards. The subsurface waters of the eastern equatorial Pacific have also shown signs of warming in the past few weeks. The warmer zone of water that

8797642AA

The persistent southwest flow and polar air brought significant snow to the western coasts of Fiordland, Westland and Buller in July. Polar chilled air brought severe frosts to parts of New Zealand. Lake Pukaki dropped down to around -10°C at night for several nights and low cloud and fog was common in places too. A moist northeast flow helped fuel an active front that brought heavy downpours and thunderstorms to Auckland in early July. Radar rainfall estimates were about 30-40mm an hour in the heaviest rain, resulting in flash floods to the city and several days later the already moist air combined with light winds brought dense fog to Auckland and Waikato. During the second week of July a slowmoving front with moisture from the subtropics brought several days of heavy and

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with anticyclones bringing some fine and dry spells. These anticyclones have recently been tracking a bit further north, partly due to the seasonal shift, but also maybe hinting at other atmospheric changes, such as the building El Nino. The risk for further spells of polarchilled air arriving behind departing weather systems will still be possible over the next few weeks. Any low-pressure system developing in the central Tasman Sea may draw moist winds from the tropics southwards, clashing with cold southern air. This may lead to thunderstorms with possible downpours, lightning, hail and gusty winds. The active fronts from the Southern Ocean will also tend to have more bite as we progress through the meat of the winter season. During late winter, a change of weather pattern is expected, with more frequent fronts moving on to the country from the south Tasman Sea followed by episodes with cool southwest winds lasting several days. This may bring windy showery conditions to all western districts and dry and mild conditions to the east and is currently the most likely pattern for spring. A few polar outbreaks may be mixed in, caused by a low deepening over the Chatham Islands, bringing a brief period of chilling southerly winds, typical of winter.

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August 2012 National Farming Review

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SWAHILI SAFARI ADVENTURE SHANGHAI SUNRISE: China’s growth is showing signs of slowing, which is adding pressure on commodity prices at the moment. PHOTO: LONELY PLANET

In Europe’s shadow By Anne Boniface Westpac Institutional Bank senior economist More than two years into the European debt crisis, developments in the debt-laden economies of Greece, Spain and Italy still hog international headlines. European policymakers and politicians have stumbled from one quick fix to another, so far managing to avert a fullblown crisis, but at the same time failing to provide a credible, comprehensive and achievable path toward redemption for the Eurozone economies. As key players have stumbled from one all-night crisis meeting into the next, the rest of the world has been reduced to watching and waiting from the sidelines — preparing from the worst, but hoping for the best. Nobody really knows whether Europe’s travails will end in a full-blown catastrophe or not. But for farmers and economists alike, the presence of this pervasive uncertainty is not enough to stop us going about the day job. In the case of economists, we publish our forecasts based on what we think is the most likely outcome in Europe, bearing in mind the risk that things could turn out worse, or better, than we expect. Our central expectation is European policymakers will continue to muddle their way through — averting full-blown catastrophe, but stumbling from one problem to the next. In this environment ongoing volatility and uncertainty, as well as extensive fiscal belt tightening, will weigh on European growth prospects and push Europe back into recession this year, with growth struggling to improve much the year after. So what impact is this uncertainty having on New Zealand’s agricultural sector? The prices of products heading into European markets have fallen hard. Lamb prices, for example, have fallen 28 per cent from their peaks. However, it is not just Europe’s deteriorating growth prospects weighing on commodity prices. Growth in other big commodity consumers, most notably China and

other parts of Asia, have also slowed noticeably and in some markets increased supply has put downward pressure on prices. The European debt crisis has also impacted on the New Zealand dollar. We have seen bouts of increased volatility as market sentiment on the outlook for Europe has waxed and waned. When things look better, the New Zealand dollar (NZD) tends to appreciate. When the outlook is getting worse markets tend to be more risk averse and the NZD tends to depreciate. All this has often happened independently of what has been going on with commodity prices, which are usually an important driver of NZD movements. While Europe’s problems certainly put a dampener on global growth prospects, it is not the only game in town worth keeping an eye on. For commodity producers like New Zealand, developments in economies such as China are also very important. The period following the Global Financial Crisis showed Asian economies, led by regional juggernaut China, had the ability to, if not completely decouple from western economies, post strong growth while growth while Europe and the United States were anything but spectacular. Indeed, lower commodity prices actually make growth easier for these developing economies as they compete for scarce resources. Chinese policymakers have been taking active steps to stimulate domestic growth. Lower interest rates, easier access to credit and other stimulus are likely to start gaining traction by the end of the year. This is likely to flow through to improved demand growth and recovering commodity prices by late 2012 and into 2013. New Zealand exporters’ increased exposure to trade with China and other emerging economies means, although 2012 may be a challenging year for agricultural exporters, we think fortunes will improve in 2013, even as European policymakers continue to trundle from one crisis summit to the next.

National award-winners gather The highlight of Federated Farmers 2012 National Conference was the Vodafone Cream of the Crop Awards night which brought the past year’s major agricultural award winners together. The gala evening was hosted by Country99 TV’s Mark Leishman. The award for the Allflex/Federated Farmers Agribusiness Person went to Progressive Meats managing director, Craig Hickson, while Dr Doug Edmeades was named as the Ravensdown/Federated Farmers Agri Personality. ‘‘We are pleased to have such highcalibre award winners,’’ says Bruce Wills, Federated Farmers President. ‘‘Preceding our awards was the Vodafone Cream of the Crop; the only occasion I believe where all of agriculture’s

major award winners assemble under the same roof. It is a privilege to have so many exceptional farmers in the same room.’’ The Cream of the Crop for 2012 were: ■ NZDIA Farm Manager of the Year, Mick O’Connor ■ NZDIA Sharemilker/Equity Farmer of the Year, Enda and Sarah Hawe ■ NZDIA Dairy Trainee of the Year, Nathan Christian ■ NZDIA Sharemilker/Equity Farmer Merit Award & Federated Farmers Leadership Award, Richard and Amy Fowler ■ NZ Young Farmer of the Year, Michael Lilley ■ Enterprising Rural Women Supreme Award, Rose Voice ■ BNZ Maori Excellence in Farming Award, Kapenga M Trust (chairman Roku Mihinui) ■ Ballance Farm Environment Award, Blair and Jane Smith ■ For a photo of the award winners, see page 23.

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EMPLO YME N T

Personal, farm succession planning Succession planning

By Peter Grigor Federated Farmers legal advisor FAMILY HOMESTEAD: Make sure you have a sound succession plan in place to make sure the family farm will remain a profitable enterprise for future generations.

PERSONAL MATTERS

Wills

Although not pleasant to think of, everyone needs to turn their minds to what will happen when they die. Having a properly drafted and executed will is critical to ensure your property passes as you want it to. If you do not have a will, your estate will be administered in accordance with the intestacy provisions of the Administration Act and your assets may pass to people you do not wish to benefit. If you do not have family, your property could end up with the Crown. Wills allow you to have a say in what happens to your property when you die. You get to choose the people you wish to administer your assets and who you wish your property to go to following your death. There are also other important things that can be dealt with in your will, such as the appointment of guardians for your children. Your will can also be an important part of your wider succession plan, particularly if you have a family trust. Often the power

of appointment of new trustees for a family trust vests in the executors and trustees of the settlor’s will. If you are the settlor or appointor for a family trust, the people you name as your executors and trustees will have a bearing on who the future trustees of the family trust will be and ultimately how it is managed.

Enduring Powers of Attorney Have you thought about who would make decisions in relation to your property and personal care and welfare if you were unable to do so yourself?

Enduring Powers of Attorney relating to your property and your personal care and welfare mean you appoint people to act as your attorney to make decisions for you, if you are no longer able to do so yourself. Having these documents in place provides peace of mind that these decisions will be made by someone you trust. If you do not have Enduring Powers of Attorney in place and something happens to you, your family may have to apply to the Court to be appointed as property managers and welfare guardians. As well as being stressful and expensive for the family, ultimately the Court, not you, will decide who makes these decisions.

FARM MATTERS Protecting the family farm for future generations is often a concern weighing heavily on many farmers’ minds. It is important you have a well-thoughtout plan in place. Every farmer’s circumstances will be different and dealing with succession planning should be looked at on a case-bycase basis, considering your family’s needs and circumstances. While it is important to consider who in your family has the skills and desire to run your farm, the needs of other family members, who may not have an interest in farming must also be considered. We suggest you meet with your solicitor and accountant to discuss options and put in place a succession plan. This should not only provide for the continued operation of the farm, if that is your wish, but also appropriately deals with your obligations to the family. ■ If you have any other questions regarding the information above, feel free to call 0800 FARMING for free independent legal advice.

NATIO NAL PO L I C Y

AHB/NAIT merger progressing smoothly By Jacob Haronga Federated Farmers senior policy advisor With Federated Farmers’ board member Anders Crofoot chairing the Shareholders council which has overseen the amalgamation of the Animal Health Board (AHB) and animal tracing organisation NAIT Limited, farmers can be sure their concerns have been taken into account. Farmers need the amalgamation to deliver a single, streamlined organisation, without duplicate sets of overheads. There have already been synergies between the work done by NAIT and AHB. Some people in charge of cattle, whose farms were not previously known to the AHB, have registered for NAIT. Having an additional source of information will allow AHB to be more effective in their bovine tuberculosis (Tb) eradication work under

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its TbFree New Zealand programme. Crofoot and the council are working towards ensuring farmers’ needs are met through a body which efficiently carries out its existing roles, but is flexible enough to potentially take on new tasks beyond Tb control and cattle and deer identification. Last month, the council announced the new entity’s independent directors — Jeff Grant, Keith Sutton, Ted Coats, Lesley Campbell and Michael Spaans. Andrew Coleman from the Ministry for Primary Industries, will be the Government appointee. A chairman has yet to be appointed. The directors were selected by a stakeholders’ council of Government and industry representatives who are funders and partners in the national bovine Tb control programme and NAIT schemes.

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August 2012 National Farming Review

MEAT & F I B RE

IND U S T RY G ROU PS

Time to change the rural road culture By Jeanette Maxwell Federated Farmers Meat & Fibre chair and health and safety spokesperson The old drink-drive slogan ‘rural people die on rural roads’ is unfortunately all too true, as highlighted in the Coroner’s recent inquest findings into the death of 17-yearold Southland shearer Troy Adamson. Rural drink-driving is also being looked at by a number of agencies and organisations, including Federated Farmers. Recently, the New Zealand Shearing Industry Health and Safety Committee, the NZ Shearing Contractors Association, police, ACC and the Department of Labour met to discuss this issue. They are working together within rural communities to find ways to help prevent further accidents. The Shearing Health and Safety Committee last month released guidelines around on-farm host responsibility, which can be found on its website at www.shearsmart.co.nz. Federated Farmers supports this effort and encourages all farmers to have a look. Shearing Health and Safety Committee member Peter Taylor says in many areas there is an entrenched culture of the shed shout for shearers after they have finished their contract, which comes back to the ‘work hard, play hard’ ethos prevalent in many rural communities. However, while providing a few beers

as an extra thank-you for a job well done is a nice idea, it should be remembered these men and women will not be able to catch a bus back to their accommodation or homes. For shearers and other farm workers, the combination of early starts, icy roads during the cold season and fatigue after long, hard days with travelling long distances on rough or unsealed roads is already a hazardous one. The addition of alcohol, especially in excess, can have lethal consequences. On my own farm it has been a number of years since we held any shed shouts, in preference for allowing people to go home early. People always appreciate more time with their families or friends and I have not yet had any complaints. Following Mr Adamson’s inquest, the Coroner has recommended the shearing industry take a more active ‘host responsibility’ role if a shed shout is held. Mr Taylor says shearing industry leaders is already acknowledging there is a problem and encourages shearing employers to improve the way they manage their staff on the roads. Some shearing contractors make sure they provide good vehicles which meet legal requirements, have driving policies in place and ensure drivers are experienced and correctly licensed. Some even provide driver training,

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TIPS FOR A SAFE EVENT The Alcohol Advisory Council of New Zealand website, www.easeuponthedrink.org.nz, has a number of good tips for ensuring a safe and enjoyable party or event. ■ Be clear about your expectations of people and be aware of which people are more likely to over-indulge ■ Hosts need to moderate their own drinking to make sure they remain aware of what is happening around them ■ Plan some other entertainment or activities aside from drinking, encouraging people to mix and have a laugh ■ Do not allow anyone to drive home if they have had too much to drink. If they cannot get a ride with a sober driver, offer them somewhere to sleep ■ Serve more interesting nonalcoholic drinks.

This issue affects more than just the shearing industry. All farmers should take note of their host responsibilities if there is a function where alcohol will be consumed on their properties. Firstly, they need to make sure shearing contractors have health and safety systems in place to look after their workers. If farmers have an open shed and hire their own shearers, they are fully responsible for ensuring that health and safety systems are set up and adhered to. Other issues to take note of are under-age drinkers and drug use. The latter should never be allowed on-farm.

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while a few have introduced breathalyser testing. There are, however, many others without these systems in place. ShearNZ last month released these guidelines around keeping shearers and wool-handlers safe on the roads: ■ Make sure clear policies on vehicles, drivers, alcohol and host responsibility are set up and working ■ Adopt a zero-tolerance to drivers having any alcohol on or after the job ■ If farmers want to show appreciation for good work provide non-alcoholic drinks and food ■ Get a copy of the new Best Practice Guideline for Travel in the New Zealand Wool Harvesting Industry and use it.

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INDUST R Y G R OU P S

DA IRY

Fonterra’s new chairman-elect ‘‘He is an immensely intelligent and capable farmer with that allimportant institutional knowledge of where Fonterra has come from.’’

By Felicity Wolfe Federated Farmers Dairy chair Willy Leferink is looking forward to starting with Waikato farmer John Wilson who was named as Fonterra Cooperative Group’s chairman-elect last month. Wilson will take over from retiring Fonterra chairman Sir Henry van der Heyden who will step down from the role in December. ‘‘John may be stepping into big shoes, but he is ably equipped to do so,’’ Leferink says. ‘‘He is an immensely intelligent and capable farmer with that all-important institutional knowledge of where Fonterra has come from.’’ Since Wilson joined Fonterra’s board in 2003, Fonterra has gone from generating $11.8 billion in revenue to around $20b. His family farm is in Te Awamutu and he also manages a dairy business in South Canterbury. Wilson is also the chairman of South Auckland Independent Testing Society and a director of Turners & Growers. Wilson will be in charge of taking the world’s fourth largest dairy company forward in its second decade of life. This includes delivering to shareholders and unit holders, everything promised from Trading Among Farmers (TAF) and the strategy refresh.

Dairies saga nears end By Ann Thompson The demise of NZ Dairies in South Canterbury has left behind many supplier sharemilkers and dairy farm owners fearful for their bottom line. Russian company Nutritek put NZ Dairies up for sale in June following the bankruptcy of its owner, Nutrinvestholding, which was declared bankrupt in March. ‘‘It is never good to see agribusinesses folding, as it leaves a mess in rural communities. This is no exception,’’ says Federated Farmers Dairy chairperson Willy Leferink. As a consequence, these farmers are uniting to push for the best outcome for all of them. Leading farmers in a time of stress takes skill and Leferink is pleased Federated Farmers has trained leaders for such events as these. To date, Fonterra has made an offer which is with the Commerce Commission. While the end of the saga of who will take up the local factory is in sight, and is likely to be Fonterra, the affected farmers know Federated Farmers will continue to fight for their rights.

— Willy Leferink Federated Farmers Dairy chair

CHAIRMAN-ELECT: Waikato dairy farmer John Wilson has been named as Fonterra’s new chairman-elect.

‘‘As van der Heyden knows, being the chairman of Fonterra means being in the spotlight locally and internationally.’’ However, Leferink has no doubts around Wilson’s ability to handle the pressure. With the cooperative working to tidy up other aspects of its operation,

such as implementing the TAF scheme, Leferink strongly hopes Wilson will put in place a clear succession pathway by creating a deputy chair. ‘‘A lack of board succession is a strategic weakness given, Fonterra is a team made up of farmers, staff, customers and suppliers,’’ Leferink says. ‘‘The immediate priority for John, during the transition phase, is to put to bed Fonterra’s constitution in November so the cooperative can move forward. Leferink says the ‘‘Federation recognises the urgent need to get this sorted as it is 010’s ‘B’ constitution currently remains a potential threat to the continued stability of the cooperative. ‘‘The Federated Farmers Dairy executive looks forward to meeting John soon, in his chairman-elect capacity,’’ he concluded.

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simple steps. “You just locate the required animal tag details in your ﬁles which you have downloaded from your Weigh Scale or Reader, specify the information you want to send and then hit go. The software handles the rest.” Gallagher NAIT Exchange software can be downloaded through the Gallagher website www.gallagher. co.nz Gallagher has also released a second software product, Gallagher Animal Data Transfer for Android, which has been designed to interface the Gallagher Hand Held Electronic Tag Reader HR3 with Android-compliant mobile phones. This application enables the user to extract animal tag details from the tag reader and attach them to an email on their phone via

Bluetooth. The email can then be sent to a computer where NAIT Exchange software is used to send the animal information to NAIT. Dan says this simple transaction means the reader doesn’t need to be connected directly to the computer for data to be transferred. “It’s a very useful application for farmers, graziers or livestock agents. For example, if your grazier is scanning your heifers before he loads them onto a truck for transport, he can email you the ID information before the heifers even leave the farm. At the same time he can also email that information direct to his own computer.” The ‘Gallagher Animal Data Transfer’ for Android application can be downloaded from

the Google Play Store at no cost. Dan Loughnane says the new software applications are part of a suite of products designed to help farmers capture the benefits of Electronic Identification while simplifying the process of transferring livestock information to NAIT. “Gallagher has a reputation for backing up our high quality products with excellent customer support. It’s all about making these products easy to use, and helping our customers to get the maximum benefit from them.”

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GRAINS

August 2012 National Farming Review

IND U S T RY G ROU PS

US drought prompts grain rises By Nick Hanson Federated Farmers Grain & Seed policy advisor International wheat prices have climbed heavily in the last month after several maize crop downgrades by the United States Department of Agriculture (USDA), as the Midwest ‘corn-belt’ gets baked. The United States (US) is the world’s largest maize producer and much of the American crop is under serious pressure as it battles a mid-west drought while in the crucial pollination period. Reports from note the dry spell is the worst in nearly 25 years and, while widespread, it has particularly affected key corngrowing states of Iowa and Illinois. The response of the USDA has been to cut the estimated average yield per hectare of the nation’s corn crop by 12 per cent in the last month, which has driven the market higher. While corn is king in the US, the market expectation is that high maize prices will move livestock farmers and others to look at wheat as a substitute. This has rallied wheat prices on the US benchmark Chicago Board of Trade exchange. Its May 2013 contract has gained nearly 30 per cent in value since mid June. The USDA estimates 75 per cent of the American winter wheat crop has been harvested already, compared to just over

half at this time last year, so the moisture deficit is having less effect on projected stocks of wheat. However, if extra demand from corn cross-over is realised, there is a high likelihood the stronger wheat prices will be sustained. The Chicago platform trades soft red winter wheat for delivery in America so is hardly in direct market competition with New Zealand wheat, but we have already seen positive effects domestically as local merchants lift their bids for 2013 wheat. Christchurch delivery feed wheat bids have rallied from as low as $330 a tonne to figures approaching $390 more recently. The key driver of price increases within New Zealand is the boost in Australian wheat prices which competes directly with local producers, particularly for delivery to end users in the North Island. The dry conditions that have supported prices for all grain in America have also raised the value of Australian wheat as buyers compete for supply from the two large exporters. Some reports have estimated Australian feed wheat prices have increased by as much as NZ$80 a tonne, making local grain more attractive. While this is a huge positive for incomes next year, we have seen little movement in the price of prompt

delivery wheat or barley at this stage. Although American trading platforms have shown strong prices for near month contracts as well as for next year’s, the increase does not seem

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National Farming Review August 2012 www.fedfarm.org.nz Ph 0800 327 646

INDUST R Y G R OU P S

DA IRY

Sharemilking pathways investigated By Ann Thompson Federated Farmers Sharemilkers’ and the Sharemilker Employers’ sections have launched a DairyNZ funded report investigating pathways from dairy farm employee through to full farm ownership. The document, ‘‘Ensuring a viable progression path in the dairy industry’’, looks at the industry’s many different career paths. Traditionally ownership was via sharemilking, with sharemilkers working the owner’s land and looking after farmers’ cows for a share in the profits. These Variable (or Lower) Order Sharemilkers learn the business, save money, rear calves for themselves and gradually build up their own herd to progress to Herd Owning or 50:50 sharemilkers. These tend their own cows on another farmer’s land who shares in the profits. After building up capital, they can buy their own farms and farm in their own right. This system has seen some changes lately with more contract milkers being employed, mainly due to the volatile milk price which also feeds into land and cow prices. In this arrangement farm owners pay contractors based on the kilograms of milk solids sold to processors. There has also been an increase in equity partnerships, where parties join forces to buy land and cows, sharing the profits and risks. There is no substitute for both parties

running their farm, how much of their own capital they want to use and the amount of risk they want to share. The report shows the contracts developed by Federated Farmers are good. The Variable Order Sharemilking Agreement is bound by legislation, so must not be altered to be less favourable for the sharemilkers than specified in the Sharemilking Agreements Act 1937 and its 2011 Order. The Herd Owning Sharemilking Agreement is, however, well able to be adjusted to suit both parties after negotiation. This is where they can work together to get the incentives for both sides right. Large corporate enterprises may not want a Herd Owning sharemilker bringing cows on to the property, due to variables such as production and breeding worth. Other arrangements such as leasing out the cows for the duration of the contract, however, can be made. Likewise, looking how expenses could be shared may make a Herd Owning sharemilking position more attractive to farm owners. Federated Farmers’ Contract for Contract Milking prompts both parties to ask questions such as, the amount of pasture cover required and the use of supplements. Both parties should be satisfied Inland Revenue Department rules around ‘independent contractors’ are adhered to. ‘‘Ensuring a viable progression path in the dairy industry’’ is available from Federated Farmers and AgFirst.

CHANGING INDUSTRY: A report on the dairy industry shows there are many career paths.

volatile times for farm owners to engage a Variable Order Sharemilker or a contract milker. For those farmers needing to make a decision on ‘where to next’, the report provides two decision support trees. The first asks farmers starting their career to decide how much money they have access to and what risk they want to carry. This leads to the operating structure they can aim for, be it equity partnership, sharemilking, contract milking, managing, leasing or full farm ownership. The second decision support tree is for farm owners deciding on their own business structure based on how much day-to-day involvement they want in

getting good independent advice and doing due diligence on the other party’s business, attitude and ability, before signing on the dotted line. Younger and progressing farmers are advised to make use of mentors and rural professionals in finding the right fit for their business. Investing in these skills will benefit those at the beginning of their careers. While the report found little change to the number of Variable Order Sharemilkers, it did find fewer sharemilkers progressed to becoming Herd Owning sharemilkers, especially in the South Island where there appears to be a bottle neck. Reasons could be higher debt levels on farm, more corporate farm ownership and it being more profitable during

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August 2012 National Farming Review

A D V E RT ORIA L

An off-road adventure story

Improving pasture to milk conversion By Alun Faulkner Country manager, Lallemand NZ Ltd With rising feed costs, the efficient conversion of feed into milk should be one of the cornerstones of profitability in the dairy herd. In New Zealand, with its forage (grass and silage) based systems, it is important that grass consumed by the cow is converted into milk solids as efficiently as possible. The rumen of the cow is responsible for the conversion of forage into energy and microbial protein via the action of rumen microbes that include bacteria, protozoa and fungi. The fibre-digesting bacteria are dependent on the rumen environment to operate effectively and, in particular, these bacteria require a pH >6.0 and an oxygenfree environment to be fully functional. The increased feeding of grain based feeds, although beneficial for microbe production in

the rumen and consequently milk production, tends to result in a decrease in pH resulting in poorer forage digestion and subacute ruminal acidosis (SARA). Early animal nutritionists recognised the beneficial impact that live yeasts could have to optimise environmental conditions in the rumen. Today, with better technology available, Lallemand have identified and isolated a strain of live yeast (Levucell SC or Saccharoymces cerevisiae 1-1077) that is specifically selected to improve rumen function. It does this by increasing the number of fibre digesting microbes in the rumen, stimulating the enzymatic activities of these microbes and scavenging residual oxygen thereby stabilising the pH in the rumen. A combination of these actions in the rumen, results in an improved fibre digestibility and consequently a better conversion of forage into milk.

In this four-wheel drive adventure across the North Island Chris Morton and Tony Bridge, two of the country’s top outdoor photographers, and their friends, take a trip through some of the North Island’s most spectacular landscapes. The drive took over two weeks and covered around 4000 kilometres. Beginning in the urban sprawl of Auckland, they drove to the winterless beauty of the Far North, before travelling down the west coast and past the astonishing gold sand dunes above Hokianga Harbour. Across swollen rivers and rolling fields, through the challenges of the New Zealand terrain and weather, this was a North Island journey very few get to experience. This is a book that will appeal to everyone who dreams of going offroad — as well as the armchair travellers along for the ride — and everyone who wants to know what lies beyond the end of the road.

Smart fuel storage systems Over the past few years diesel engines and their fuel injection systems have undergone many technical advances, mainly driven by regulations governing engine emissions. These systems run at high pressures and with fine tolerances, therefore they demand that clean fuel be run through them. Substandard fuel storage facilities are a quiet but costly threat to businesses in the farming and industry sectors. Fuel stored in substandard facilities can become contaminated with condensation, rust or the diesel bug. This contaminated fuel can result in vehicle and machinery failures, costing thousands in downtime and repairs. Fuel contamination is the most common cause of fuel injection system failure. Ed Harrison of Fuel Storage Systems Ltd, based in Ashburton, developed the Sebco Diesel Stations to tackle these problems. Sebco Diesel Stations are bunded tanks that house diesel in an insulated clean environment that virtually eliminates condensation, as they are not steel, no rotting or rusting occurs. Sebco Diesel Stations provide a sterile environment for fuel and are safe and secure to operate. The Sebco tanks are manufactured to an Environmental Protection Authority’s HSNO (Hazardous Substances and New Organisms Act) Approved Code of Practice and are the only such units on the New Zealand market that comply under these tough requirements. Sebco was launched on the New Zealand market in 2007 and has since become a market leader for fuel storage in New

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NEW ADVENTURE: Out There North: A 4WD Adventure in New Zealand’s North Island by Chris Morton and Tony Bridge.

■ Out There North: A 4WD Adventure in New Zealand’s North Island by Chris Morton and Tony Bridge is is available to purchase from bookstores nationwide for $49.99, and online from www.craigpotton.co.nz. For more information please contact Chris Morton on 027 497 7190.

Viafos right for your land Fundamentally different to Super Phosphate and RPR, Viafos is a natural Dicalcium phosphate that offers a part fast, part slow smooth release and maximum availability over approximately 12 months. Viafos is an alkaline phosphate with a pH of 8, with the granule or powder product also offering 26 per cent calcium and 10 per cent silica. Biogro certified, Fertmark registered and a guaranteed minimum rate of P, Viafos has risen to be a strong player in the farming, horticulture, landscaping and home vegetable and garden use circles. Viafos suits any application method and can be blended with most fertilisers and lime. Viafos dissolves in water but is non water soluble therefore has exceptionally low impact on waterways, it supports soil biology, plant establishment and growth along with improved health benefits for stock and human beings. Viafos has been used in farming for the last 7-8 years throughout New Zealand and is available in most main centres. Also enquire about our natural ViaMSK (mg 7% S 16% K 20%) chip or fine powder. ■ Visit www.viafos.co.nz email contact@viafos.co.nz or phone 0800 842367 for further information.

Rodent and pest control a mouse click away Farmers have all their rodent pest control options at the click of a mouse thanks to Pest Go, New Zealand’s leading online shop for farming related pest control products. The business is owned by Specialty Seeds. Owner Stephen Finch says the opportunity to set up Pestgo arose back in 2008 because of the problem of black field crickets in the north of the North Island. ‘‘Black field crickets are a major problem in the Waikato Auckland and Northland regions where they eat pasture. Farmers used to have to mix wheat and chemical themselves which was unpleasant. We developed a premixed product, Crickoff Pro, registered which farmers only had to apply.’’

Having developed an effective product, Finch set about finding one way of selling it to farmers and launched a website in 2009. Since then Pest Go has grown and sells a wide range of products for the control of possums, rabbits, stoats, mice and rats. The e commerce web site is being refined frequently with new products added. Clients can order online by going www.pestgo.co.nz where they can select the product or products they want. The products are then delivered directly to their door. For clients in greater Canterbury orders are normally delivered in two working days.

Unlike some online retailers selling similar products, Finch says Pest Go prices are inclusive of all costs including GST and delivery. One product Finch is particularly excited about is the Pied Piper bait station for the control of rodent pests. This bait station is a rectangular box made of durable moulded plastic featuring a covered bait hopper on the top. This feeds pellets of bait via gravity into the box below through a grate. The station operates by an animal entering the bait station from either end or eating at the pellets of bait hanging down through the grate. The animal eats

the pellets then leaves the bait station to seek water and eventually dies. Finch says the Pied Piper has a number of advantages over other bait stations. ‘‘All the poison is consumed by the animal inside the station which is much safer than other baits where the animals typically take them away to store and eat later. They then die but often leave bait remnants lying around which wastes bait and can be harmful to the environment. The other important advantage is the Pied Piper can be used with other cheaper types of bait reducing operating costs for users.

National Farming Review, Monday August 6, 2012

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August 2012 National Farming Review

INS ID E R

Parliament

CREAM OF THE CROP

Horizons leads the way

Bills in the House

As at July 20 a number of Bills relevant to farming were before Parliament, at various stages, including: ■ Dairy Industry Restructuring Amendment Bill — third reading ■ Biosecurity Law Reform Bill — Committee stage ■ Food Bill — second reading ■ Building Amendment Bill (No 4) — being considered by Local Government and Environment Select Committee ■ Local Government Act Amendment Bill — being considered by the Local Government and Environment Select Committee ■ Game Animal Council Bill — being considered by the Local Government and Environment Select Committee ■ Heritage New Zealand Pouhere Taonga Bill — being considered by the Local Government and Environment Select Committee ■ Regulatory Standards Bill — being considered by Commerce Committee ■ Biosecurity Law Reform Bill — awaiting final stages in the House ■ Local Electoral Act Amendment Bill — awaiting first reading

Other reviews and consultations ■ Review of Agricultural Transport Rules, Ministry of Transport ■ Vehicle Licensing Reform Project, Ministry of Transport ■ Strengthening Economic Relations between Australia and New Zealand, Australian and New Zealand Productivity Commissions. ■ Inquiry into Local Government Regulatory Performance, New Zealand Productivity Commission ■ Road Maintenance Taskforce, New Zealand Transport Agency

Happenings

■ August 4 to 7 — NZ Agricultural Aviation Association Conference, Rotorua ■ August 6 and 7 — EDS Conference, Auckland ■ August 14 to 16 — NZ Plant Protection Conference, Nelson ■ September 1 and 2 — Federated Farmers Rural Butchers Conference, Hamilton ■ September 2 to 6 — Agricultural

THE OFFAL PIT

CREME DE LA CREME: Agriculture’s major award winners for 2011-12 assembled for the Vodafone Cream of the Crop awards night at the Federated Farmers national conference.

Biotechnology International Conference, Rotorua ■ For more details, go to ‘events and training’ at www.fedfarm.org.nz or visit our Facebook page.

F ED S PE OPLE Federation board changes David Rose retired from the Federated Farmers national board, after three years of service, at this year’s national conference. As a Retired Federated passionate Farmers board advocate of farm member David safety education, Rose his work has helped prevent many injuries and worse. David was often seen in his role as the board’s spokesperson on adverse events,

looking after all farmers’ interests even when his own farm was affected by the 2010 Southland snowstorm. He was also instrumental in forming ‘Meat the needs of Christchurch’ which raised $421,000 from cash, wool and livestock donations to help people affected by the earthquakes. We wish David, Helen and their family the very best.

New board member Katie Milne West Coast dairy farmer Katie Milne has filled the position vacated by David to became Federated Farmers second female board member. Katie is also currently the New Federated Federated Farmers board Farmers West member Katie Coast provincial Milne president and West Coast Chair of TbFree. She takes over David’s portfolios, except for health and safety.

NORTHLAND

With statistics showing dairy compliance rates have reached 91 percent for the 2011/2012 season, Horizons region dairy farmers deserve a pat on the back. It is great to see high compliance levels and it is also worth noting, not all cases of significant non-compliance result from effluent entering waterways. The statistics released by the Horizons Regional Council show, with over 900 farms inspected, the percentage of significant non-compliances halved from last year to just over 7 percent. A number of factors, including more settled weather, influenced this, but it is still very pleasing. Other standout stats were; the number of abatement notices issued, down to 12 from 53 last season and 99 in the 2008-2009 season and the number of infringement notices issued, just 36 compared to 41 last season and 75 in 2008-2009. It would be good to get a break down of what infringements have no effect, a potential effect and an actual affect on the environment. Those who have been found non-compliant should be talking to Horizons staff or the Federation’s Manawatu/Rangitikei executive about how they can fix problems they may have. It is good to hear from Horizons that most farmers are doing just that when they are being inspected. In four short years there has been a huge culture shift in the dairy industry, which is still happening. Overall, the vast majority of the region’s dairy farmers, 91 percent, deserve a huge pat on the back. This is not a time to rest on our laurels, with plenty more work to be done, but these figures prove to naysayers that dairy farmers take the environment seriously. Their hard work and investment should be recognised.

PROV INCIA L S POT LIG HT

Another district plan, another dollar By Matthew Long Northland President Transpower is potentially souring a traditional goodwill relationship between it and farmers with buffer zones along national grid lines popping up in several district council plans, including the Whangarei District Council (WDC). Federated Farmers is committed to fighting these plan changes, perceived by many farmers as a land grab. By utilising WDC’s District Plan, landowners cannot claim compensation. Transpower is using the National Policy Statement (NPS) on electricity transmission, saying it needs to stop third parties preventing maintenance, upgrading and development on the grid. However, for rural land at least, there were already guidelines in place.

The Federation’s position has always been, where there are individual issues, that both parties need to work together to solve the problem. The implementation of the NPS in council plan changes is not restricted to Northland. Transpower has responded to farmers’ fears with an open letter attempting to soothe concerns, arguing the regulations sought from councils are not as onerous as portrayed in the media. However, Federated Farmers says, if property rights are to be procured for a commercial electricity enterprise, it should be through negotiation of a formal easement agreement and compensation. This was achieved on the 400kV line from Whakamaru in Taupo to Otahuhu in Auckland. Transpower protected this

line from earthworks, buildings and subdivision by negotiating compensated easement agreements, demonstrating how this system can work. Federated Farmers has submitted to WDC on the plan change, asking them to remove the buffer zones which will otherwise see farmers shouldering more cost and burden around hosting Transpowers’ towers. Under the new rules, if a farmer wanted to build, develop or convert on his or her farm, within 64 metres of a tower or transmission line, they would need to apply for resource consent through the council, rather than negotiating directly with Transpower. In Whangarei resource consent deposits cost $1,500, with possible further costs for billing hours and a hearing. Everyone benefits from power and in

the past farmers have supported Transpowers’ need for transmission line security. However, farmers host Transpower’s towers for free, so new rules undermining their rights need compensation for losing out on opportunities to improve and develop their land are alarming. In some cases transmission towers have been installed on properties without the proper consent. It is more than cheeky to now ask those farmers to foot a bill they never asked for. We believe Transpower is trying to save money and time by using council processes. This is not just a rural issue as urbanites will face the same problem. It serves everyone’s purpose to properly discuss concerns and negotiate in good faith.

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