Red Alert

Archive for the ‘agriculture’ Category

Priorities

Posted by Damien O'Connor on November 10th, 2010

The outbreak of Psa is a grim reminder how exposed we are as an economy to the effects of biological attack by unwanted organisms. Why then, would a party that claims to represent farmers reduce the border protection efforts to help pay for tax cuts.

The farmers and orchardists at risk from this ridiculous stance should reconsider their loyalty to a party that has deserted their needs. I have been contacted by people working in the system who say this is just the beginning of incursions that will occur because they can’t do their job properly.

Money and resources have been shifted internally to set up Smartgate and smoother passenger processing at our airports. Delays coming into this country are rarely long compared to the US process or the chaos at some larger international airports.

We should never compromise our biosecurity for convenience. The US dont do it for their security, why should we?? I wonder if Hilary passed that wisdom on to John or was he too starstruck to hear?


A Shortcut to Disaster

Posted by Damien O'Connor on October 28th, 2010

I have learnt today that the Food Safety Authority in collaboration with the meat Industry are about to conduct a trial on a new system of meat inspection at freezing works without the assistance of Meat Inspectors.

It is an interesting contradiction and my fear is that industry self regulation is the object of the exercise. Such ideals have proven all too often to be disastrous from international experience. At a time when the meat industry is under extreme pressure at every level from farmer to marketplace the risk is that inadequate inspection leading to any form of contaminated export meat would cripple our meat exports and reputation as a quality food producing nation.

Apparently no details have been made available to the meat inspectors so the assumption is that chain workers will carry out assessment of the health of the carcasses and the Vets will sign off the consignments for export. If you presume no skill is necessary to be a meat inspector we might be ok. But as I know to get the inspections spot on takes training, skill and experience. One mistake identified by our trading buyers and we are doomed.

The question is, does the risk justify the cost savings if any over time?? It is also ironic that in Select Committee today the Food Safety Authority was trying to convince us of the importance of robust systems for food safety under the new Food Bill.

There will be a few hard Questions for them at the next meeting !!!


Goodbye to sow crates and hen cages?

Posted by Phil Twyford on September 14th, 2010

Labour is supporting Sue Kedgley’s Animal Welfare Amendment Bill to select committee.

If passed, it will close the loop hole in the Animal Welfare Act 1999 which allows breaches of specifc welfare codes to continue.  The use of sow crates and battery farming of hens will be brought to an end within five years, which was arguably the intent of the 1999 Act anyway.

I congratulate Sue for bringing this Bill to the House.  I think New Zealanders are ready to say that sow-crates and battery cages for hens don’t meet the humane standards we want to see in our country’s most important industry.

I represented Labour at Sue’s press conference today. It was good to have Gregor Fyfe of Freedom Farms on the panel. Freedom Farms show you can raise pigs for pork successfully without using sow crates. SPCA, WSPA and SAFE were also represented, organisations that have done a great deal to prick the national conscience on this issue.

Future generations will look back on these farming practices with amazement that we practised such cruelty on an industrial scale. It’s time to do something about it.

Sue reports Labour, Greens, United Future and Maori are backing the Bill. ACT oppose it. What will the National Party do?

Update:  Sue Kedgley has posted on the bill and press conference here.

Update #2: National slam cage door shut.


Asleep at the Wheel- an English Family Feud?

Posted by Grant Robertson on August 10th, 2010

A fascinating piece (not on-line it seems) in the Dom Post on Monday from Conor English, Chief Executive of Federated Farmers, and brother to Finance Minister Bill English. He asks the question in terms of the New Zealand economy- “are we asleep at the wheel?”.

This sounds oddly reminiscient of what the Labour Party has been telling Bill English and John Key for some time, that there is no plan. Conor English notes the seismic changes in the world economy and raises the resulting need for us to innovate and to grow our capital markets. He says

We need to focus on the strategic issues that matter. Are we asleep at the wheel, like Wellington was when it forgot to extend its runway for long haul planes? Will we only wake up to realise the world has passed us by and a real opportunity lost? Lets not sleep. Lets find a solution so future generations can benefit from our Kiwi ingenuity.

An interesting article, raising interesting issues. Could also be interesting to be a fly on the wall at the next English family get-together.


Key’s lie puts free trade deal down US agenda

Posted by Trevor Mallard on July 31st, 2010

I don’t agree with her emphasis but Fran O’Sullivan has highlighted a less obvious outcome of John Key’s employment relations reform.

Helen Kelly last year initiated contact between Tim Groser, the Nact Trade Minister, and Richard Trumka, President of the AFL-CIO, in an attempt (and in itself a risk on Kelly’s part) to get the US union support necessary for a free trade deal through congress and to push it up the Obama agenda.

Trumka, who is not a natural supporter of free trade, agreed to visit NZ and talk with unionists as well as politicians.

Kelly’s intervention was based on a fairly co-operative arrangement with the Key government, involving a large degree of trust. It resulted from some undertakings – especially relating to consultation.

Key broke his word, co-operation finished and Trumka was told that the positive working relationship no longer existed and he pulled the pin on the visit.

Nice one John.  Just to be seen to give wage and salary earners a bit of a kicking at your party conference.


Milk ahead of water

Posted by Brendon Burns on July 20th, 2010

Synlait, the Canterbury corporate dairy farmer, has been hunting for capital since it began making milk powder two years ago. It’s already an unmistakeable site on State Highway One about 30 mins south of Christchurch. The plant handles 300 million litres of milk from its own farms and supplies from rival Fonterra, as required under the dairy industry deregulation that spawned Synlait.

Synlait has now secured an $82m injection from China’s Bright Dairy,  taking a majority stake in the company, already  22 percent  owed by Japanese coporate Mitsui. Subject to regulatory and shareholder approval, Bright Dairy’s capital will see Synlait’s milk powder output doubled by 2011/12 .

This lines up neatly with the Government’s announced agenda to see new water allocations flowing in Canterbury next year, long before any tough new environmental controls can be put in place. You can’t help but believe the Synlait injection wasn’t in Government’s mind – Ruth Richardson is on the Synlait board – with its axing of Environment Canterbury’s elected councillors who were among those concerned at the deteriorating water quality, most particularly in the area around where Synlait’s milk plant is centred.

Dunsandel township, just up the road from the existing plant, has had e-coli in its water supply for the past year. Synlait wants to double production and later double it again. Little wonder it has invested in the Central Plains Water project, which, despite occasional attempts to mask its purpose, is designed to create more water for dairying. Fonterra is also intent on using the CPW scheme to create milk for a brand new $100m plant it is planning at Darfield,  to the norwest of Dunsandel.

So a new wall of milk is coming fast, with little prospect of tough new environmental rules in the same timeframe. Little wonder, water is now identified as the number one issue in Canterbury. Nick Smith is in Christchurch tomorrow for a major announcement on water issues, so perhaps he comes with soothing words.  Trouble is, milk comes ahead of water as far as his Cabinet colleagues are concerned.


Don’t send those old ewes to the works

Posted by Trevor Mallard on July 17th, 2010

Like most MPs spent recess time in electorate and doing portfolio stuff.

One of my RWC visits was to the stadium to get briefing on the training that has been put in place for the thousands of new staff that will be taken on next year for bar and catering operations. Getting specialist senior staff through the recently tightened Immigration Service maze is a real issue.

Chatted with a couple of young men who are just finishing chef’s modern apprenticeship. Talk about being employable.

But one thing that became clear is that there is a danger of being short of chicken and lamb if planning doesn’t improve. And decisions made now will make the difference.

So there are bonuses in the Rugby World cup even for roosters and rams.


Farms for foreigners?

Posted by Trevor Mallard on July 10th, 2010

The Herald has an article which goes into a bit more depth on the question of overseas ownership of land. While we are short of capital and have relied on foreigners since the days of the whalers and sealers the time has come to tighten up. It is now almost impossible for a kiwi to buy farmland from scratch.

The Landcorp Crafar bid is one I supported and in fact called for Landcorp to run the farms in two postings on Red Alert one Landcorp Should take over Crafar farms in October last year and the other use Lancorp for orderly disposal of Crafar farms in May.  I’m pleased the government has accepted my advice.

As far as foreign land ownership generally maybe the line should be that there is to be significant benefit to New Zealand that could not be gained any other way?

A Weekend Herald investigation of consents granted under the Overseas Investment Act shows at least 24 countries have been given approval to invest in the agricultural sector, covering 154,855ha and a wide range of sectors from sheep farming to viticulture.

The Overseas Investment Office is currently assessing seven applications involving land totalling about 3678ha.

Under the Overseas Investment Act 2005 any non-urban land of 5ha is deemed “sensitive” and needs approval, while farmland must be offered on the open market before consent can be granted.

Westpac chief economist Brendan O’Donovan says foreign investment generally has been an integral part of New Zealand’s growth.

“Because we’ve always had a capital shortage and we’ve been very dependent on foreign funding and foreign firms,” O’Donovan explains.

Foreign direct investment in New Zealand is currently about $92 billion in total, he says.

“By and of itself there’s nothing that you need to be particularly scared of.”

New Zealanders buy into foreign companies and land, he says. “If you expect to be able to buy land in other countries then you’ve got to be prepared to sell it here.”

Although it is notable that New Zealanders cannot buy land in China, O’Donovan says.


Field Days

Posted by David Shearer on June 17th, 2010

I was struck by the sheer size of Fieldays at Hamilton when I visited yesterday. It’s truly extraordinary. It covers a huge area and is expected to be visited by over 130,000 people over its four days. It was also great to see the face of NZ agriculture at its finest – particularly as this year’s theme was innovation.

They even advertised my arrival. In Labour colours and font. Thanks to Tim MacIndoe who took the picture.

Field Days 1

That event, and the MAF forecast of future prices is encouraging. Dairy, forestry, lamb are all set to rise. Even wool, which has been performing rather poorly is expected to rise over the next four years. That’s good news for the NZ economy.

I just hope it won’t be used as further proof by those who believe that shipping out commodities is our future.

We believe that at our peril. We need to be developing higher value products from our commodities, not just shipping ever larger quantities.

This was the message delivered in KPMG’s agribusiness report. It forecast increased demand for our commodities, but that demand is likely to be met with increased supply from Chile, Eastern Europe, China and others – some of our most welcomed exports is the farming expertise we’re delivering to less developed farmers in those countries.

Green, ethical, clean commodities from NZ will be our defining difference – and provide the premium – that our wealthier customers will be willing to pay. So too will be the new products that our R&D will create. They need to be sophisticated, clever, responding to our markets and with a low carbon footprint.

What we don’t want to do, with these optimistic forecasts is take our eye off that ball.


Why at Creech

Posted by Brendon Burns on June 15th, 2010

Two questions today in the House to John Key on why Wyatt Creech was in cosy contact with Ag Minister David Carter’s office on December 22 2008 seeking briefings on Canterbury water/RMA issues. 

This was two days after the forum held by Carter,English and Brownlee with Canterbury irrigators (and no environmental voice) to progress their issues. Issued a media release at the time noting not even Nick Smith was present.

Have always believed an implicit if not explicit signal was given at the forum to irrigators that ECAN would be taken out of the way if it was impeding their access to more water . Did an OIA of Carter and out pops an email exchange between his political advisor and Wyatt Creech, 11 months before he is appointed to the “independent’ review of ECAN. Creech says he wanted  “a comprehensive picture” about the RMA/water issues “so that I can see that they are raised.” Raised where?

OIA now on way to David Carter asking for all the contacts /correspondence with Creech and other former National Ministers…


Reforming Paradise

Posted by Brendon Burns on June 3rd, 2010

The chairman of the Government-supported Land and Water Forum acknowledged yesterday that the legislation axing Environment Canterbury has severely tested the Forum.

Former diplomat Alastair Bisley needed all his diplomatic skills at the Environmental Defence Society’s annual conference in Auckland  – Reform in Paradise -where he reported on progress with the Land and Water Forum.

The Forum was initiated two years ago as a way to bring diverse parties – farmers, fishers, Fonterra, iwi, irrigators an others – together to try and improve freshwater quality.

Nick Smith won Cabinet funding for it as a vehicle to progress his much-professed ambitions to improve water quality. Then he shat on it with the ECAN legislation.

Yesterday also, even one of the Creech review team admitted he had sympathy for ECAN and acknowledged the lack of national water standards from the Government. http://www.stuff.co.nz/the-press/news/3769946/Govt-reviewer-admits-sympathy-for-ECan

Bisley indicated the Land and Water Forum was briefed about the abolition of Environment Canterbury’s councillors; what clearly came as a nasty surpise was handing the new ECAN commissioners powers to amend or rescind Water Conservation Orders protecting Canterbury rivers like the Rakaia and Rangitata. Five parties to the Land and Water Forum went publicly ballistic.

Alastair Bisley could only say that what tests you makes you stronger. My own question to him was how he could reconcile the Forum’s wish to improve water quality when John Key has stated publicly that he wants new water in place in Canterbury in the next year – an impossible timeframe to achieve any environmental improvements.

Alastair pointed to new water storage taking pressure off aquifers. Correct, but not a solution to increased effluent and nitrates which a new rush of water will also create and further degrade water quality.

Have to say that it was galling to watch John Key coming in earlier at the EDS conference by video link and saying no less than 5 times that the government attached great importance to getting the balance right between economic and environmental growth. Sorry but that is fundamentally contradicted by his agenda for rapid new water to provide election year lines and photo ops around ‘step change’ growth which will again come at the environment’s expense. And all of that puts our whole economic base at risk, as several speakers said yesterday.

Prof Caroline Saunders from Lincoln Unversity said she was astonished at the state of Canterbury rivers when she came here 14 years ago – from the less than pristine Newcastle-on-Tyne.  That was before the Canty dairy boom really kicked in.  Caroline affirmed our prosperity rested on marketing and delivering on our environmental sustaintainability.  Marks and Spencers sustainability head said the recent reporting in Britain questioning our ‘clean, green’ image was a ‘warning shot’ across our economic bows.  It’s almost unbelievable that this Government continues to think it can get more economic cake by flicking crumbs to environmental outcomes. More reforming Paradise than reform of it.


Coddington 90% right

Posted by Trevor Mallard on May 30th, 2010

Pretty good article from Deborah Coddington on the need for Landcorp to buy Crafar farms.

She proposes a partial float of Landcorp. I disagree. But she is 90% right. correct.


Latin America insulted

Posted by Trevor Mallard on May 26th, 2010

During our dinner break last night a few MPs attended the 200th anniversary of the Argentinian revolution. I’ve never been there but see real possibilities for lots of NZ companies in Latin America.

Great function except the speech from the government.

The first problem was that they sent Georgina te Heuheu. It should have been the PM or McCully if Key was out of the country.

The other Minister there was Carter who was heading out the door as Georgie acknowledged him. Red faces.

Then she apologised for McCully being there – might have been appropriate if he was but he wasn’t.

And then she said that she knew that David Carter had had a positive and productive trip to Argentina last year – and she had just found out because Carter had just told her. As the Diplomats pointed out very discreetly all that showed was that she hadn’t read the report on the trip to Cabinet.


Fairtrade and smart development in Samoa

Posted by Phil Twyford on May 9th, 2010

Getting sustainable economic development happening is the challenge in any developing country. NGOs generally do the small scale grassroots stuff like micro-credit and the challenge is how to scale up.  Governments usually focus on macro-economic reform and infrastructure but the challenge is how do you make sure the poor get the benefit of any growth.

Country Calendar have profiled an NGO in Samoa who are hitting the sweet spot. Women in Business are working with 1000 families, mostly subsistence farmers, helping them add value to their produce and find niche markets. They just delivered 400 tonnes of organic virgin coconut oil to the Bodyshop. It’s grassroots alright, but they have scaled up, working in 234 of Samoa’s 300-odd villages. And they are fast establishing a thriving organics industry.

They are finding a path for Samoa beyond the classic Pacific aid-tourism-remittances economy, and breathing new life into the country’s depressed subsistence agriculture.

It is good to see Kiwis helping out. Women in Business are supported by Oxfam NZ, the Tindall Foundation, and NZAID (at least it was NZAID until Mr McCully disestablished it).  The other NZ connection is that Women in Business have brokered  a link with Christchurch cafe C1 Espresso who are working with Samoan farmers to grow and supply an exclusive line of organic fairtrade coffee. Breakfast at C1 a couple of weeks back alerted me to this story (thanks James!).

Watch the Country Calendar item here. And by the way, it is Fairtrade Fortnight.


Oram on agriculture

Posted by Trevor Mallard on April 26th, 2010

Rod Oram has a good handle on economic development issues. Yesterdays op piece on agriculture in the SST is further back in the paper than most readers get to but is well worth a read. He says :-

If sensible analysts said national champions such as the US semiconductor industry, Japanese carmakers or the German engineering sector were failing, you’d get an immediate and vigorous debate in their respective countries about how to restore their competitiveness.

Well, KPMG said last week that New Zealand’s agricultural sector will be under serious threat from low-cost, large volume commodity producers overseas as soon as five years from now. Yet its report created barely a ripple.

and

Worse, nothing about the past or current performance of the primary sector suggests it has the vision and ambition to lead the rapid evolution to a high science, high value, high sustainability economy.

Last, and by no means least, the government is a problem. For example, it has overthrown local democracy in Canterbury so it could drastically weaken water conservation safeguards in order to clear the way for a lot more irrigation. Such moves are damaging public support of agriculture and aiding and abetting the primary sector’s pursuit of greater volume of the very commodities that KPMG says other countries will produce more cheaply and abundantly.

Even if we could be cost-competitive on commodities, we don’t have enough land to achieve the enormous increase in volume required for agriculture to make this a big, rich economy.

and

Third, KPMG believes the primary sector can make money selling its technology overseas. But it misses the far bigger opportunity. New Zealand could massively increase its farming scale and reach by becoming the world leader in some sub-sectors such as pastoral dairy and lamb farming and some horticulture such as kiwifruit.

But to do so it would have to invest heavily in growing and processing in countries with far lower land and labour costs than here. Then it could continue to make good money from commodities overseas while it made even better money producing sophisticated products here. This is a huge shift in mindset and strategy for the sector, from being simply exporters to becoming truly global businesses.

Fourthly, KPMG underestimates the damage done by farmers’ overriding strategy. They farm for capital gain, not income. The game for many of them, particularly in dairy and kiwifruit, is to pile on debt to accumulate as much land as possible. They are content with low income along the way because they plan to make their big tax-free killing from capital gains when they sell out.

Makes lots of sense to me.

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NZ agriculture ‘has five years’ before being eroded

Posted by David Shearer on April 19th, 2010

Today, KPMG made a worrying announcement – New Zealand agriculture has “as little as five years before underdeveloped agricultural regions such as South America, Western China and Central Asia’s large scale intensive farming practices erode New Zealand’s cost advantage in producing bulk”.

Not for the first time, it is a warning that our reliance on bulk commodities will be undermined by places that can do it cheaper. Add to that, is that a number of NZ companies are making a good living selling our efficient farming practices around the world. And add to that the fact that the Chinese and others are really adept at taking existing technology and improving on it (do we really think agriculture is going to be the exception?) and our bulk commodity trade looks really serious in the medium-long term – undermined by efficient farm practices combined with cheaper labour costs.

Yes, as John Key and others note, there is a growing demand for food and protein out there. But there is also an increasing supply.

Two possibilities may maintin our edge. One is branding – NZ’s clean, green image – that distinguishes us from other factory farmed, less high quality products from elsewhere. The other is the development of high end processed products from our commodities that we develop through our R&D.

Currently the bulk of our R&D in the agricultural sector, for example, goes towards improving farm output. While this has made our farmers amongst the most efficient and profitable globally, much of this improved farm technology is open-source. In other words, the product of our publicly funded science can be replicated by others.

Increasing our prosperity means getting smarter. We’ve talked about it for a couple of generations, time to up the R&D around increasing value from our primary products.

Five years, isn’t a very long time. We need bold action.


Chinese dairy farm bid undermines NZ primary sector?

Posted by Clare Curran on April 18th, 2010

Worth watching.

Selwyn Pellett from the Productive Economy Council, interviewed by David Beatson on why he thinks a $1.5 billion plan by a Chinese Syndicate to buy NZ dairy farms will undermine our strategic capability.

Natural Dairy NZ Holdings (Chinese syndicate) has lodged an application with the Overseas Investment Office after announcing plans to buy the Crafar family’s farms as part of a $1.5 billion buy-up of land, stock and milk production plants in New Zealand.

Can’t embed the video. See the interview here


Townies to get a cut of cow cockies risk and reward

Posted by Trevor Mallard on April 12th, 2010

The future of the dairy industry – and especially that of Fonterra is vital to New Zealand’s future prosperity.

There are enormous opportunities for the industry. Because dairying is so important to us we are at the cutting edge of technology and marketing.

To take advantage of this requires capital – hundreds of millions over the next few years. Fonterra is the logical vehicle for the development. But farmers are inherently conservative. They farm to produce milk or even capital gains.  They want to be able to get out of Fonterra and get a fair price for their shares in the company.

But that is a problem for the company. Because they have a  massive contingent liability which would become real if a significant proportion of farmers decide to cash up and move to another company. This is a real negative when Fonterra is borrowing to expand.

Farmers have already agreed to “dry” shares, worth up to 20% of the value of their main shareholding.

But the new proposal – described by Bernard Hickey as Clayton’s shares whereby investors can get the dividend stream and capital gains (or losses) equal to the shareholders but can’t take control because the share have no voting power.

Rod Oram sees the potential:-

Fonterra says the fund will only be big enough to meet the financial needs of farmers. But let’s hope farmers get used to the concept. A variation of it could see the creation of virtual equity, perpetual capital in which outside investors get dividends and capital gains linked to Fonterra’s performance. But they’d get no ownership or votes. This would be a way for farmers to bring in outside capital without ceding any ownership.

Looks good to me. Fonterra is one of the best bets we have to lift our standard of living. And the idea of townies being able to invest really appeals.


The crackle of porkies

Posted by Brendon Burns on March 25th, 2010

Extraordinary submission today at Primary Production committee on the Animal Welfare Bill – now a Government bill increasing penalties for ill-treatment – from Sam McIvor of the Pork Industry Board. His submission was that the pork industry abhorred abuse of animals!

Challenged him on this, when many if not most New Zealanders, certainly after last year’s Sunday footage, believe the continued use of sow crates in the pork industry is ongoing animal abuse. His reply was that the industry’s focus groups, once sow crates are explained, accept the practice. I suggested to Sam if he spent months of his life in a crate the size of the desk sitting in front of him, he might have a different view.

He was correct to observe how the public will decide what’s appropriate.  Many NZ pig farms don’t use sow crates and yet the current law allows pigs to be in them for the time they are pregnant, which is most of their pitful lives.

And don’t “townie’ me on this. My late father used to be a pig farmer; I am a meat eater and I understand and accept the case for businesses to be given time to adjust to new realities. Point is the pork industry has known this issue was coming. The NAWAC animal welfare code was reviewed five years ago; the industry played for time. It continues to play for time – an extension to 2017 is now suggested. My only sympathy for it is that we do continue to import similarly-raised pork .  A recent Written Parliamentary Question I asked confirmed we import from a wide range of countries including China and the US, both of which use sow crates widely. The fact the Government has adopted Simon Bridges’ bill shows the power of public opinion on animal welfare issues, at home and abroad.

The pork industry will ignore it at its peril.


Brace yourself for the cow jokes

Posted by Grant Robertson on February 11th, 2010

Oh dear.  I think this article in the Guardian from yesterday (their time) is  going to haunt New Zealanders living overseas.

New Zealanders have long endured jokes about the extent to which they are outnumbered by sheep. But now Kiwis can expect more variety in the gags, with the country’s national statistical office announcing that the population has also been overtaken by that of dairy cattle. Statistics New Zealand’s agricultural production survey, released today, reported that the cows’ numbers soared to 5.8 million in 2009. New Zealand has a human population of 4.3 million.

I think every New Zealander travelling overseas has experienced sheep “humour”, this adds to the arsenal. My favourite quote in the article is

“In 2009, New Zealand had fewer than eight sheep per person,” explained agriculture statistics manager Gary Dunnet.

Only eight sheep each. I can hear the jokes now.