Written By:
Natwatch - Date published:
3:28 pm, March 15th, 2016 - 107 comments
Categories: exports, farming, john key -
Tags: dairy, useless
The current rise of populism challenges the way we think about people’s relationship to the economy.We seem to be entering an era of populism, in which leadership in a democracy is based on preferences of the population which do not seem entirely rational nor serving their longer interests. ...
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So… we like dairy farmers now? They should be propped up with taxpayer dollars?
Well it might be worth having a reasonable estimate on how many farms are in danger of passing into foreign hands, and what the effect might be of failures on rural/provincial unemployment.
If you don’t give a sh*t about either of things because you essentially don’t govern with the interests of every citizen and future generations in mind, then you shrug it off like Key.
No, get the message through that they’ve been bullshitted continually about the riches to be found in dairy farming, and get them onside. Convert the farms into wetlands and forests at the expense of the grossly over-subsidised pollutive industries. The absurd increase in land value gets redistributed to pay for the clean up. No one loses, we all win.
How do wetlands make money? Are wetlands even appropriate for, eg, Canterbury? How do you “get the message through”?
I’m pretty sure that Canterbury used to pretty much be Wetland.
And our environment is far more important than money.
forest, apparently. Before humans came along.
And of course the question becomes whether past ecosystems would survive tomorrow, because climate change.
Oh, I think we should also be looking to rats, cats, mice, stoats, rabbits, possums, etc, etc…
Our ecosystem is already changed but it can still support life which is where the wetlands really shine.
+1000
the potential for the South Island to majorly restore native habitats is huge.
You can also have wetlands within forests, and forest wetlands. Many places in the South Island had wetlands alongside forests. No reason why that couldn’t happen in Canterbury again even with climate change. We’re just not used to thinking they can be there because we’ve fucked with the land so much that in many places it doesn’t hold water any more (doesn’t Canty have something like 1% of the plains as native ecosystems now?). Replacing forests with pasture is a pretty sure way to get rid of wetlands as well as draining specific sites.
You get wetlands in NZ even in dry climates.
http://www.orc.govt.nz/Information-and-Services/Wetlands-Inventory/Central-Otago-District/Chapman-Road-Inland-Saline-Wetland/
http://www.orc.govt.nz/Information-and-Services/Wetlands-Inventory/Central-Otago-District/
http://canterburymaps.govt.nz/mapping-the-wetlands-of-canterbury
http://www.doc.govt.nz/nature/habitats/wetlands/wetlands-by-region/canterbury/
http://www.wetlandtrust.org.nz/Site/Visiting_Wetlands/Wetlands_you_can_visit_in_NZ/Canterbury.ashx
“I’m pretty sure that Canterbury used to pretty much be Wetland.”
Forested, yes, wetland no. Except in pockets, such as Christchurch, which was largely a swamp.
Well then, strengthen the OIA, but don’t give them a fucking cent.
So right. For years the greens have been saying nz is reliant on dairy. Dairy is wrecking the environment. Need to half the dairy stock. Now they want to prop them up. Does this include the corporate farmers based in parnell.
Now they want to prop them up
Are you running this line because you believe it or because you think you can score points?
Or is Polly in desperate need of a cracker?
Have the Greens ever advocated abandoning New Zealanders to predation by the National Party’s owners? Why would they start now?
am I missing something? How do people get ‘the Greens want to bail out dairy farmers’ from this post?
Probably from James shaw in the house today, he seemed very concerned about the number of dairy farmer who will lose their farms. I thought he would be celebrating
Sorry “dairy farms”
Sorry again “farmers” fat thumbs.
I thought he would be celebrating
Why, what’s wrong with you? Blinded by hate much.
The Greens have never been anti-dairy farmers, what are you on about?
Listening to Shaw’s questions in the House, it’s clear that the GP is concerned about rural communities and the risks to the NZ economy, which is consistent with its kaupapa and policies.
http://www.inthehouse.co.nz/video/42053
The Greens think that Dairy farmers get some unfair subsidies from the government and need to use clean farming techniques if they don’t already.
That’s not the same thing as wanting farmers to fail. I want farmers to do better, not sell up to overseas interests.
Nobody should be celebrating as Dairy farmers losing their farms because the new buyers will probably be off shore and not give a F about NZ, our exports or our environment.
If enough farms get sold then the new buyers could get the majority voting rights of Fonterra and our main export of NZ will be out of NZ control and probably the co operative approach destroyed and then NZ Dairy will be controlled by finance companies and wall street.
Of all the nutty comments the Greens could make, this takes the tofu. Who would know how many farmers will fail? And if he knows that, why doesn’t he tell them so the poor buggers can have a sleep in and not worry about getting up for milking.
I’m happy to admit that the Nats can be poor but like a low grade, mid week horse race, the winner doesn’t need to be a champion if it’s up against hopeless competition.
You know that Treasury is able to do modelling to work out estimates of the number of farms that will fail, right? National should be aware of the forecasts and the consequences coming in the next 12 months. If they are not, they are incompetent.
No if about it mate – we didn’t get $120 billion in debt by National knowing what they were doing. $150 billion this year – IMF’ll be stepping in before very long.
The banks will know which of their borrowers are in danger of default. And I suspect John Key does know but the number isn’t a good one.
He’ll know how many are at risk of failing, and he can have a reasonable guess at which are most likely to with the current facts. I don’t think anyone is asking him to be exactly right, just to put some sort of scope on the problem using the government’s resources.
Greens have now done a press release pointing out the issues:
https://www.greens.org.nz/news/press-release/prime-minister-%E2%80%9Cdoesn%E2%80%99t-have-clue%E2%80%9D-dairy-farm-downturn
This government doesn’t expect to have to manage. That’s what the market is for.
Exactly
The problem being, of course, is that the market doesn’t manage either resulting in collapse.
The Standard implicitly calling for bailouts of Tory dairy farmers – i think i’ve seen it all.
Next thing those wildly excreting bovines will be flying past my window.
No, an author on The Standard is explicitly calling for the government to show some interest in the economic troubles facing the regions.
With a view to doing what?
Have a read of TRP’s nonsensical post and thread.
There is functionally no difference between favours to Sky City and favours to Dairy Farmers.
There is a fundamental difference: casinos suck money from their locality, like vampires.
Farming, of whatever type, injects money into the regions. Sure, our waterways will be cleaner, but it could result in a rural disaster.
Rather than waiting for bubbles to burst and market corrections to evolve, the government can help manage the transition towards more diverse production.
With a view to knowing what is going on in your own economy. Anticipating the likely consequences. Mitigating the ones you want to mitigate. You know – governing.
Favours to dairy farmers is one possible outcome – it makes a hell of a lot more sense than favours to SkyCity.
Unlike corruption, farming can actually be done in a sustainable fashion, lol.
This is the problem with some of our friends on the left- we still need to have some room for nuance. Just because dairy farmers as a whole pollute too much and have lobbied national to destroy local government in Canterbury shouldn’t mean we want their individual businesses to fail. We should be supporting them to do better, if they’re willing.
(ie. better on not polluting things. If people overspecialise in dairy and overleverage, we may just have to let them fail, unfortunately. Hopefully we can stop them from selling our farmland at cut rates to overseas buyers if they do. =/)
“Hopefully we can stop them from selling our farmland at cut rates to overseas buyers if they do.”
Unfortunately it’s the banks who get to make that decision under current arrangements. Gee, wonder what they’ll do?
Exactly – thank you McFlock.
I think the phrase ‘ex Tory dairy farmers’ is closer to the mark, Bruce. That’ll be why National are crapping themselves over the issue. Yesterday Key reckoned ten percent were going to be going bust, today … he has no fucken clue how many. Of course, he may be lying. It could be because the figure is way higher than 10% and he actually knows that.
It’s not often we see Key blindsided, but this one has got him stumped. If he can bail out his bankster mates, why doesn’t he give a shit about National Party loyalists? He’s looking more and more like a typical JAFA out in the heartland.
No. An actual JAFA would be taking an interest in what’s happening. Key just doesn’t give a shit.
Perhaps we can repurpose it Just Another F****** American-wannabe.
Or maybe he’s keeping that inside knowledge to allow,say, someone’s blind trust to make a killing picking up some cut price land….
Can’t see any implication that anyone is calling for farmers to be bailed out.
Direct assistance might be complicated by various free trade bullshit, but what about this:
1) declare a climate emergency in some of the hardest hit areas in order to enable relief efforts
2) target longer term relief efforts at transitioning towards crops and animals that are more approriate to the expected regional climates, rather than sucking water from strained aquifers. Olives and that sort of thing, maybe.
3) a coherent regional development plan, from infrastructure to moving people away from cities (with actual financial encouragement, not just to juggle declining state houses). Real wealth is produced in the regions, and moves towards the financial centres. Service sector money just travels in circles between corporations in the cities.
Yeah, That may not work.
Coffee. Definitely need coffee. And from what I can make out it may actually grow quite well in some parts of Te Waipounamu (Once we start to feel the effects of AGCC – oh, wait).
Building up the infrastructure to develop our economy – I like it. R&D on electronics, aeronautics industry, developing our full resources, recycling, etc, etc.
Could probably do that Space Program that I think we need.
coffee is a good one.
It’s about using the land for what it is best suited to, and diversity in produce.
The Indian solar panel thing was interesting – it was overruled on the basis that it stipulated using local parts. We don’t need to do that if we’re just talking about regional recovery. Think agresearch being better funded and more diverse.
Making it easier to decentralise some tech jobs into the regions by developing infrastructure is a way to diversify the regional income streams – the fibre rollout is definitely A Good Thingtm
You’re getting ahead of things there.
It’s not so much the ongoing use of the land, but rather the immediate effect of a very large (10-40%) of one of our largest industries going tits up. The capital loss from this is going to affect the capitalisation of every farm and rural business in the country. And in the very short term.
The immediate issue is to get some control over the implosion to try and limit the loss of equity of operations that have positive EBIT. Something like Crown Asset Management after GFC, or using Landcorp to manage the disbursement in a controlled way.
I’d almost bet there’s frantic work going on along these lines to try and stave off the coming implosion in the Tory heartland.
“Relief efforts” is just code for removing money from the public purse (whether its cutely called tax breaks or whatever), and i can guarantee it will be a lot more than the 28m for the flag that raised so much ire.
If anything this shows that primary production is a shit way of making money, unless you are adding value significantly. And we aren’t doing that because, more or less, our farmers are dumb hicks. We’ve struggled to do it with our logs too. And finally, the service sector isn’t necessarily inferior to hard production – after all not everything people want and need is material.
🙄
What this situation shows is that leaving primary production purely to the markets creates bubbles.
People will always need food and raw materials. Not everyone needs an accountant, or a convoluted and hedged stock trading plan.
The difference between money for economic management and money for a fucking flag is that economic management improves people’s lives and produces a net benefit to the nation. A flag does neither.
Ever heard of “holidays” on mortgage repayments? Lowering interest rates on loans? The major banks have been sucking Billions out of NZ over the past few years . They are partly responsible for the crap the dairy industry finds itself in right now – so being partly to blame – the Banks – as much as the farmers should be taking some of the pain. Of course banks structure their lending so that they loose as little as possible should things go belly up. But this is where the Government can step in and direct banks to moderate their behaviour towards those farmers who are in dire straits wrt loan repayments. Remember the GFC and Banks needing guaranteed funding from govt – too big to fail. Well now its the turn of the banks to behave in a manner that is beneficial to society. They can take a cut in their profits for a while,a s farmers struggle to get back on their feet.
Of course those who can only see the market as the solution to every problem are those with very little brain and very little learning. A managed economy out-performs a market economy every single time. ( there is in fact no such thing as a purely free- market economy). But just suppose the government continues to ignore the plight of farmers over their heads in debt. What will be the outcome?
a. Farmer suicides will continue to increase.
b. Land values will drop as more and more farmers are forced off their land and farm mortgage sales will increase.
c. As land values drop even more farmers will find the equity in their land diminishing and their gearing increasing meaning that they in turn will be finding pressure from banks desperate to not loose money on their “investment”.
d. Those farmers who have not suicided and who are now off their farm will be adding to a growing rural unemployment.
e.Rural towns which are essentially service towns to farming will also be closing down. (this is a particularly strong trend in Australia where many rural towns have vanished in recent years following the long term drought and the down turn in the farming industry in those areas such as southern NSW).
Of course if this is the wish of the RWNJ that is what they want. One has to question why they desire this sort of outcome – but that is for them to justify.
Sounds like a normal economic cycle to me. People who overreach and make malinvestments losing money. The role of the taxpayer is not to insure against business failure.
Land values dropping is exactly what needs to happen, to return what has been a bubble, to real and sustainable values. Given the amount of talk about the need for this to happen in the Auckland property market, i thought more people here would get it.
“Sounds like a normal economic cycle to me.”
Yes, unstable and damaging boom-busts have become the new normal of bankster/hot credit/irresponsible lending driven economic cycles.
“Yes, unstable and damaging boom-busts have become the new normal of bankster/hot credit/irresponsible lending driven economic cycles.”
Pretty much not sure why anyone is surprised by this – oil has been bouncing around wildly and will be just about due to spike upwards anytime now.
Yup, indeed, and the oil market has been manipulated in the past year.
You really do expect a lot from the PM, don’t you. It’s not like he’s Nicolas Maduro, who understands the inner workings of all parts of the economy that he can manage it all in concert for the best.
Well he’s paid handsomely for not doing this job – and has the whole of Treasury to help him with the math. But all he wants to do is schmooze the spooks and daydream about spying. Useless tosser.
No. He is not paid to run dairy farms. He should leave that up to dairy farmers. And, if they fuck it up, that’s their look out, not the government’s.
“He is not paid to run dairy farms”
He is paid to have a handle on the impacts of the policies his government promotes.
He’s an accountant. for goodness sake. He knows the importance on numbers (to the exclusion of all else usually). I don’t believe he doesn’t know these numbers – lying and incompetent.
He’s paid to govern in the public interest and he’s never done it. He should be thrown in jail and every cent he’s been paid taken back, while the damages are calculated. The asset thefts alone cost NZ billions.
🙄
Smilies – for the tr0lls who find language just too difficult.
🙄
And they wonder why people think rwnj are morons 😉
🙄
‘preciate your call.
Cows are major emitters of GHGs. Time to halve the NZ dairy herd, not prop up its numbers with tax payer subsidies.
Who’s saying dairy farms should be propped up?
The regions need to be supported. And we need information about the likely extent of the dairy collapse before that can happen.
And that won’t involve financially supporting dairy farms, which are massive emitters of GHGs?
who is saying that dairy farms should be propped up?
Don’t care who. I’m asking if politicians are about to throw money at GHG producing dairy farms.
why do you think politicians are about to do that?
Don’t think any of the parties are proposing bailing them out at this stage, CV.
I’m sure that if someone tried really hard to be a one-eyed zealot who insists on thinking the absolute worst of any plan not their own, then the words “The regions need to be supported” could translate only into “financially supporting dairy farms”.
In the real world, however, many other activities can fall under the umbrella of “regional development”. Some of them have already been mentioned in this very comment thread, That makes it much more difficult to assume that “The regions need to be supported” means “financially supporting dairy farms”. But I’m inspired that you keep reaching for that rainbow, CV.
A bit of history. In the 80s there was a drought bailout for farmers. For a fact I know two farmers who lied and were proud of the handout they received. Further back in time there was “Sheep Retention scheme” where there was a payout of dollars per head of sheep to encourage the sheep-farming industry. Local farmers recounted their flocks to discover overnight a 15-20% increase in their numbers. Funny that.
Nowdays it would become very public on the net.
If you did it on a per kilo of solids supplied it couldn’t be fudged.
And I’m sure these cheat farmers were voting National in a few years, and applauding Bolger and Richardson as they ‘got stuck into those lazy welfare bludgers!!’
In the 80s farmers also had their land confiscated by banks. Deja vu.
The dairy industry, fronted by Fonterra has pushed New Zealanders to pay global prices for their products. Why should the consumer care if a certain number of dairy farmers hit the wall? However, we need to make certain, written in law, that none of our land goes, again, into foreign ownership. Be like some African countries that lease portions of land.
Losing the land to foreign ownership is a major risk if this is left to the market.
We could always legislate to compensate them and nationalise the land, selling it to people who will actually do ecologically responsible stuff with it.
Fat chance of that under National, though.
I would support that 100% Mathew W
How is it that “global prices” seem higher in NZ supermarkets than in just about every other western country that Kiwis live in?
Would be good to see someone like Swordfish evaluate which high-capital dairy electorates could change their vote share if Labour, Greens and New Zealand First campaigned intelligently. Concentrating solely on the Party vote:
West Coast-Tasman
National 16,000
Labour 8,400
NZF 3,100
Green 4,600
Clutha-Southland
National 21,700
Labour 5,000
NZF 2,100
Green 4,600
Taupo
National 20,700
Labour 6,700
NZF 3,700
Green 2,200
Waikato
National 21,600
Labour 5,300
NZF 3,900
Green 2,000
New Plymouth
National 21,000
Labour 8,000
NZF 3,400
Greens 3,000
Waitaki
National 22,600
Labour 7,162
NZF 2,700
Greens 4,400
We should be under no illusions that any of these seats will shift as MPs. But thinking in MMP terms, the potential for a 2-3% change in overall party vote when spread across all three potential coalition parties in these dairy-dependent electorates would be a huge harvest that National would struggle with.
Seems counter-intuitive, but an MMP attack straight into dairy heartland could yield strong electoral rewards if well coordinated across the thee opposing parties.
very smart thinking Ad.
Yeah, whoever’s nominated for those seats needs to be campaigning hard on the party vote. Arguably you could even have people very high on the list parachuted into those electorates for Labour so that it’s clear that Labour is taking the regions seriously. (although most of them love their electorate safety net, so won’t want to go…)
With only one electorate between their many MPs, Greens and NZFirst would be free to campaign and reap the rewards.
You’d lose easily that 2-3% from the urban poor and middle class.
Leave the regions to the Muldoonists in NZF.
You get my logic clearly.
As you can see from the NZFirst results, their party vote base is very low in these electorates. So it would take cooperation across the Opposition to achieve a strong measurable result.
I think there’s much more likelihood of voter movement in the regions than in the cities this time.
While I don’t have much sympathy for people who have borrowed themselves into a deep hole, the knock on effects in the rural communities will be massive.
If a government was planning some form of spending to help nz through the coming pinch, a $1.50 subsidy per kilo on dairy would go a long way.
Socialism by stealth.
At no stage should we consider a bailout for the dairy industry… farming should be look upon like any other business…. if it costs a farm $500,000 (random number) a year to run, and if they only bring in $450,000 , then you would have to look seriously at your costs or your sales… seeing as they are selling milk at auction, they cant really look at sales, so can only look at costs… but there would be little room there generally (I cant see dairy farmers spending more than they have to already)…
It’s a business, and kiwis shouldn’t be subsidizing the farmers
Agree Richard however theres warehouses full of Palm Kernels in Taranaki and from what I see and hear the demand for them hasn’t diminished.
Perhaps excess stock should go and cows could eat grass and hay for their diet.
After all they have been doing that for centurys.
I remember the chortles from my farming acquaintances if not laughter every time the government tightened the screws on the unemployed and beneficiaries. I remember the whinging and outright racism every time the word Maori came up. Usually it didn’t because the subject wasn’t welcome.
Subsidizing the farmers is just a waste of time and a load of taxpayers money and if allowed once will come back to haunt us in future generations when the mistakes of the past are repeated as they will be.
Basically screw em. They are adults and are responsible for their own problems.
After all thats what the free market and true capitalism that they adhere to when things are going well is all about. Lets see how it works when things are tough.
“Basically screw em. They are adults and are responsible for their own problems.”
What about the young falla in his first job on a dairy farm that’s going to be one of the first expences pruned, or rural subcontractors whose pH has gone quiet and has a mortgage to pay, screw them to,??
Theyre still hoping the next years auction prices will rise… its possible, but then again, other countries are learning to do what we do, and while we are (were) a major player, we didnt have a monopoly on it, and we were pretty much at capacity…
Any “bailout” should only be considered to stop the land going overseas, IMO.
Seems like people are talking farm bailouts already eh. It was predictable that bailing out massive GHG producers will be considered seriously as an option.
Why not just tighten the OIA if that’s the problem?
I’d be happy for bail outs or subsidies as long as the farm was bonded to convert to organics or other sustainable land management within 5 years. You’d need to put other supports in place via advisors etc.
You’d probably get a riot if the govt tried to pay farmers extra to keep dumping cowshit and nitrates in our rivers.
I would settle for them excepting a carbon tax and a cgt .
not enough. We’re already going to be picking up the pollution clean up bills for farmers, it’s unethical to pay them to keep polluting.
You asked me who was considering dairy farm bail outs; it seems that you and many other people are mulling over it at least.
I replied to b about an ideal. But if you listen to what I am actually saying I am saying that in 2016 there shouldnt be any bailouts (unless you think that the National govt would put my kinds of conditions on them).
No idea who the ‘many others’ are, and I suspect you don’t either because there aren’t many (you could link if I am wrong). B wants a bail out in the form of a subsidy. Is there anyone else?
The last thing we need is a subsidy. It only reinforces the bad decision making.
The problem isn’t $3.90 , it’s the $8.40 and other spike payouts before that. Have a look at http://www.interest.co.nz/rural-data/dairy-industry-payout-history to see these spikes above the normal curve in the graph at the bottom. These have encouraged some poor decisions in the industry that it’s having to deal with now.
And Fontera is carrying a huge debt, is this the result of these spike payments? They are technically insolvent since they can’t pay their bill on time, so have a thought about them going tits up too.
We need to manage this to minimise the impacts and change behaviour, not reinforce bad behaviours.
And the big new flash offices Downtown Auckland which are yet to be completed?
I listened to question time today and think there is a danger of the opposition overplaying their collective hand. Virtually all the questions were about the dairy situation and Ron Mark asked essentially an identical question to the one Grant Robertson had just asked in the previous question.
I get this is a very big deal (im a farmer so understand the reality of the situation) but there is a danger that the opposition appear over zealous exploiting real peoples hardship for the purpose of political gain.
Labour seem to be making up policy responses on the hoof which to me seems unnecessary when it is the govt that is on the ropes over this. This issue is a slow motion trainwreck and the govt have backed themselves into a corner the opposition will have plenty of opportunity capitalise if they play their cards right.
I am a farmer, but not a dairy farmer.
New dairy farmers, or dairy farmers that have expanded, paid too much for just about everything. To a large extent I think that’s tough shit.
Banks not reducing interest rates as the OCR drops is sickening. They expect to make extraordinary profits regardless of both the general economic performance and to cover the gambling they have been making in an industry that has fundimental flaws.
The government has been actively making things easy for them in relation to water rights (ECAN) and subsidising irrigation when the business and environmental impacts do not justify it. Having the government as your cheerleaders probably should be regarded as a kiss of death: remember the white gold.
9% of global milk production is exported. Fonterra (with milk from NZ) accounted for 25% of the total milk production that was exported.
The production capability of farms that were not exporting needed only to rise by a couple of percent for them to swamp the demand for export milk. (A couple of percent rise in the 91% is equivalent to Fonterras total export.) This why Fonterra are extremely vulnerable. This is why high cost dairy production in New Zealand is counter to the business model that made its milk attractive overseas.
Fonterra needs to be fixed because otherwise dairy farmers will always be tettering on the edge of one type of oblivion or another.
Fixing one farmer’s debt or one hundred farmer’s debt through tax payer intervention is not going to really put the country in a better position.
The history regarding dairy farmers and working people is shocking .
Massey Cossack’s, the 1951 lockout, their anti union agenda and their disgraceful way most of them treat their workers makes it hard for me to have any sympathy for their present plight.Instead of having their overseas holidays and spending non-stop they should have done what most people try to do save a bit for hard times.
I have never heard of dairy farmers calling for action to help the unemployed or solo parents in fact just the opposite they protest with anger at any help given the underprivileged.
However despite this crisis their Tory government has got them into
they will still vote National and still bash unions .
Thing is, it’s not just about them though, is it?
Think about if a factory in a small town cuts its workforce – yes, the factory might have been mismanaged, or is obsolete, or is simply being swampd by other suppliers in the global market. All of that is by-the-by, none of it helps the town face the sudden problem.
Well, magnify that effect throughout the regions. Cafes, shops, garages, vehicle dealerships, all getting hit by a drop in customers…
And the regions are the areas that feed money through to real people, rather than corporations.