Carter, do your job

Written By: - Date published: 12:12 pm, September 30th, 2009 - 46 comments
Categories: animal welfare, national/act government - Tags: , , ,

One area where I agree with Fran O’Sullivan is the dairy industry. Today she covers the Crafars:

CraFarms’ bankers should do the decent thing and put the so-called dairy farming “giant” into receivership before its practices further decrease the value of its assets and bring New Zealand’s prime agriculture export industry into international disrepute.

The Government is quickly losing patience with the aloof stance the bankers are publicly taking while the Crafar family business, whose rocket-like growth they fuelled with $200 million of loans, proves itself to be a management disaster.

In case the Government hadn’t noticed, the banks are foreign-owned, the reputation of our agriculture export industry is of little or no concern to them. Who it should be of great concern to, however, is the Government. If they were a decent government, they wouldn’t be sitting on their hands and hoping the banks will act, they would act themselves.

The banks can’t actually afford to put the heavily indebted CraFarms into receivership. This is the biggest dairy farming company in New Zealand. In August, not a single dairy farm was sold. Receivership sales of CraFarms’ farms would see them go at deeply discounted prices. That would force the banks to revalue downwards the book value of all their dairy loans. Obviously, the banks are keen to avoid taking a huge paper loss.

All Agriculture Minister David Carter has managed to do is ask for a report from his officials. If he were a good minister, he would be joining the Greens in condemning and publicly ostracising the Crafars, to make absolutely clear that their behaviour is not typical of farming practice in New Zealand and is completely unacceptable. The Government has the power to appoint a statutory manager of Crafarms to oversee wrapping it up.

Come on Carter, do your job.

46 comments on “Carter, do your job”

  1. Lew 1

    He can’t really do that until an investigation has been conducted. It’s all very well for the Greens and the media to put the boot in, but the Min of Ag must meet a higher standard of rigour.

    I agree that such investigations and reports are now so late as to be farcical, and the question of whether he will take action when they are said and done remains open, however.

    L

  2. Tim Ellis 2

    The Minister of Agriculture doesn’t have the power to place a company under statutory management. Even then, as long as the banks are continuing to provide liquidity to Crafarms, there is no issue of receivership, which makes statutory management impossible.

    I don’t see how the foreign-owned nature of the banks makes banks less interested in New Zealand’s national interest. All of the major trading banks have large rural mortgage portfolios. If Crafarms causes major damage to the New Zealand dairy industry, it would severely affect the banks’ bottom lines by a far greater degree than the risk of the Crafars’ farm defaulting.

    There really isn’t any evidence that the banks can’t afford to put Crafarms into receivership, Marty.

    Crafarms appears to be an example of a dairy farm acting recklessly. If you think the government should intervene now, using powers that it doesn’t currently have, how do you feel about the Labour Government’s inability to intervene into rogue finance companies over the last five years?

    • snoozer 2.1

      “The Minister of Agriculture doesn’t have the power to place a company under statutory management.”

      Who said anything about the Ministry of Agriculture?

      “The Government could orchestrate statutory management under the Corporations (Investigation and Management) Act 1989. This is usually done by the Minister of Commerce following a recommendation from the Securities Commission. “

      • Tim Ellis 2.1.1

        snoozer, Marty said that Mr Carter should “do his job”, and indicated that he wasn’t doing his job. The recommendation from Marty was that Crafarms should be put into statutory management. The implication was that Mr Carter somehow has the power to do this.

        There are three organisations that need to work together. Fonterra, the banks, and MAF. There isn’t much Mr Carter can do without changing the law under urgency (which Marty seems to oppose), to give him the kind of powers that no other Minister of Agriculture has had in the past. For some reason Marty seems to think that Mr Carter is to blame for behaviour of one farmer that has gone on for many years.

  3. First English, then Key’s holiday in NY, now this…

    Help! I’ve fallen into a parallel universe where I find myself repeatedly agreeing with Fran O’Sullivan 🙄

  4. grumpy 4

    Crafar is a disgrace to farming – of any sort. It is great that a fellow farmer potted him to MAF but what a limp wristed department they are!
    Recent example of MAF (and SPCA) uselessness include Emerald Lodge and Slade Farm in Canterbury.
    The dairy industry and it’s practices are a time bomb waiting to destroy NZ’s external image. It’s time for a cleanup now and it’s up to Fonterra and the Government to lead it.

  5. Ianmac 5

    Perhaps Fran has had a transplant Sprout?
    A very clever little smiley face too. 🙄 I copied it so wonder if it will work?

  6. JohnDee 6

    If Fonterra had the gumption to take action and ban milk from Crafer’s, what how fast something will happen. Do you notice how limp wristed Federated Farmers are as well.

  7. Draco T Bastard 7

    The banks can’t actually afford to put the heavily indebted CraFarms into receivership.

    Bingo. The banks can’t do anything because there’s no way they’d get their money back if they tried – never mind the interest. As such, if they did a mortgagee sale on the farms they’d lose millions of dollars.

    The government does need to take the farms back and also tell the banks that they will be getting no compensation as the money will be going into fixing up the damage that the Crafars have done.

    As for the response so far?

    Agriculture Minister David Carter says ‘dirty dairy farmer’ Allan Crafar could do huge damage to New Zealand’s reputation and needed to leave the industry, but MAF, Fonterra and Crafar’s banks should work independently to deal with Crafar Farms financial and operational problems.

    The government would not intervene to force a solution, he said.

    He wants them out but he’s not going to do anything about it – typical lame duck NACT action.

    • Tim Ellis 7.1

      Draco, apparently all the evidence that Crafarms have been operating recklessly, and have had little concern for the environment or animal welfare is very new. There is no evidence that the Crafars have been acting less than perfectly except in the last year.

      • kaplan 7.1.1

        Tim your research ability is no better than the current governments.

        Tim says, “There is no evidence that the Crafars have been acting less than perfectly except in the last year.”

        This took my about three mins on Google:
        27/1/2007
        http://www.rotoruadailypost.co.nz/local/news/farm-fined-35000-for-dirty-dairying/3719401/

        23/9/2006
        http://www.rotoruadailypost.co.nz/local/news/reporoa-farmer-faces-maf-mistreatment-investigatio/3702495/

        4/8/2006
        http://www.hawkesbaytoday.co.nz/local/news/neglected-animals-grim-sight-court-told/3695250/

        No evidence eh? And this is just what has made it into the media.

      • lprent 7.1.2

        Yeah right…. There have been a number of stories on them this year piling up convictions. Most of these have been for environmental issues and most of them are for ongoing violations.

        There are only 5 MAF inspectors for the whole country it is hardly surprising that they haven’t been looked at too closely. What you probably mean is that they haven’t got caught.

        I’d now expect that other regulatory institutions are going to start having a close look at them. They seem to regard breaking legal requirements as being something that one should do as a civic duty. I’d expect that they have the same lax attitude about tax, working conditions, erosion, fencing, using public roads, etc…

        They seem to operate their business as if it was a criminal enterprise. I suspect that is how they will now be treated.

        • Zorr 7.1.2.1

          Geez Iprent… you yourself should know.

          It’s only illegal if you get caught! (so, yeah, they have only recently started doing illegal activities as they have only just been caught out… :P)

      • Armchair Critic 7.1.3

        Nice try Tim. Try these links:
        http://www.stuff.co.nz/waikato-times/business/1760238
        http://www.stuff.co.nz/dominion-post/business/farming/562473
        http://www.stuff.co.nz/national/farming/50608
        You are wrong, and the Crafars have literally been sh*tting all over the NI for years.
        I’m at a loss to work out where you are coming from on this issue, what the Crafar’s have done is indefensible. It is not even only immoral and not illegal, it is both, and by a long way.
        Your 12:46 post is just a distraction, too. While the Minister of Agriculture has only limited powers in this situation, other ministers can act on this. And they should, without waiting for a report. Is a report really necessary to confirm that something is terrribly wrong at Crafarms? I expect NACT won’t do anything, JK is probably quite relaxed about it.

      • Draco T Bastard 7.1.4

        Wow Tim, that amount of spin must have strained something – you want me to call a doctor?

        • Tim Ellis 7.1.4.1

          Oh, so it appears that the Crafars have been behaving badly for years. Why didn’t the last Labour Government intervene and place Crafarms under statutory management?

          • bill brown 7.1.4.1.1

            Oh for fuck’s sake!

          • snoozer 7.1.4.1.2

            If something hasn’t been fixed in the past, we must not fix it now. So says Tim

          • Armchair Critic 7.1.4.1.3

            Good grief, Tim, now your comment has been shown to be unadulterated crap, it’s Labour’s fault? I’ve got puddles outside my window right now that you would be out of your depth in.
            Consider this – did Labour have enough evidence to put Crafarm’s under statutory management a year ago? Not just “some evidence”, but “enough to put them under statutory management”. NACT have a lot more evidence now.

            • Tim Ellis 7.1.4.1.3.1

              No I didn’t say it was Labour’s fault AC. I’m making the point that you can’t blame Mr Carter for not intervening against the Crafars when the last Labour Government failed to intervene against them when there was plenty of evidence that they were acting recklessly over a long period of time.

              Labour’s history of non intervention while finance companies were taking large pools of savings in dodgy investments did far more to damage New Zealanders in my view.

            • Armchair Critic 7.1.4.1.3.2

              It sure sounded a lot like one of your tired old lines, Tim.
              If you think Labour had enough to go on last year, then surely with all the extra that has come in National are compelled to act. Or, and more likely, National won’t do any more than talk and you will do another 180 degree turn.
              Labour, finance companies and non-intervention – maybe finance company failures have done more damage in terms of money, so far. Longer term, letting this one run has a fair bit more potential to cause financial damage. Keep in mind that the failing finance companies were neither deliberately cruel to animals nor responsible for repeated discharges of particularly destructive contaminants to the environment. And that when NZ’s finance companies were failing, there were plenty of other bigger but otherwise similar failures happening around the world, so the focus was elsewhere.
              Are you suggesting Labour should have intervened with the finance companies? Thought not. Were National calling for intervention? Post a link, if they were.

          • The Voice of Reason 7.1.4.1.4

            Well, Labour didn’t have the benefit of your advice, Tim. Luckily the new Government does and they are busy doing … um, nothing.*

            *except rorting taxpayers, ignoring voters and going on holiday. But you’re in favour of all that good stuff, eh?

          • indiana 7.1.4.1.5

            Didn’t realise you could catch so many fish with one hook…nice Tim…heh heh!

      • grumpy 7.1.5

        Come on Tim, don’t defend these bastards. Just admit they should be booted out of farming FOREVER.

  8. outofbed 8

    In 2001, Valley View Ltd, of which Mr Crafar is a director, was fined $13,000 for disposing effluent where it could enter waterways.

  9. Zaphod Beeblebrox 9

    Don’t we have an Animal Welfare Act?

    Isn’t MAF the body responsible for enforcing this act?

    Might be worth asking them what is going on.

  10. Herodotus 10

    Animial welfare has been assigned to the SPCA to lead proscutions out of their funds, with little support from any govt as a whole. Perhaps this action (NOT) is why central govt agencies have not been greatly involved in admin and charging for “fowl” actions to animals. They are incapable of doing so. We at Kiwiland do hide behind the “Clean Green” image, yet such inappropiate farming methods go by almost with implied support, everyone (eg Govt, MAF, Fed Farm, public) should be calling for and seeing the heads of this corp to roll. Sharped the gullotine

    • Zaphod Beeblebrox 10.1

      The Animal Welfare Act deliberately diffentiates different standards for what is acceptable for different species. Of course to argue that your family dog or cat suffers more than your production animal is unscientific and clearly ridiculous.

      Don’t know why we continue to put up with this situation- its got nothing to do with productivity as farmers who care for their stock seem to also have superior production figures.

      Its interesting that the export freezing works (believe it or not) place a big emphasis on animal welfare, this is because their buyers (esp the EU) demand it of them and it certainly affects the quality of their product.

  11. Red Rosa 11

    Borrowed from InterestNZ with thanks, is the following

    Just so you don’t miss out,

    http://www.interest.co.nz/ratesblog/index.php/2009/09/28/exclusive-nzs-biggest-dairy-farmer-allows-calves-to-starve-to-death/#comment-39559

    apparently from the guy who gave Bernard the video.

  12. insider 12

    ANy other busiensses you want to chuck under state control just because you don’t like them?

    We have rule of law for very good reasons, one of which is to try and prevent illegitimate use of state power.

    If I don’t like the way you run your home – you have cars on the lawn and play loud stereos, don’t wash, and have yuck snotty kids – should I be able to pressure the government into forcing your bank to call in your mortgage? Get real.

    If he has broken the law then go for him under that, and hit him hard if he is a multiple offender. But to argue he be stripped of his property and rights without any due process or even evidence of “harm to our brand” is just ridiculous. Can anyone point to one lost sale for Fonterra as a result of this or other past misdeeds? Some people are a wee bit provinicial in thinking that this kind of thing has any audience anywhere outside our narrow shores. It’s probably harmed our brand as much as John Key on Letterman enhanced it…

    • Draco T Bastard 12.1

      Didn’t see anybody saying that due process shouldn’t be followed. There’s more than enough evidence to prove that the Crafars are a bunch of losers with no regard to the land, the animals or the law. When it gets that bad then they damn well should lose title to the land.

  13. Red Rosa 13

    To give Carter credit, things do seem to be moving

    http://www.beehive.govt.nz/release/minister+orders+wider+inspection+crafar+farms

    MAF do have extraordinary powers, almost amounting to martial law, to deal with foot and mouth disease. This shambles, sad though it is, does not fall into that category.

    Some of the largest NZ dairy operations are run to exemplary standards of operation and management. Their owners and staff must be cringing at every turn of the Crafar saga.

    Trouble is, all are tarred with the same brush.

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