Key is on top of the dairy crisis

Written By: - Date published: 3:28 pm, March 15th, 2016 - 107 comments
Categories: exports, farming, john key - Tags: ,

Parliament today, our PM at work:

107 comments on “Key is on top of the dairy crisis ”

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  1. Magisterium 1
    15 March 2016 at 3:35 pm

    So… we like dairy farmers now? They should be propped up with taxpayer dollars?

    • AB 1.1
      15 March 2016 at 3:53 pm

      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.

    • Eyre 1.2
      15 March 2016 at 6:19 pm

      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.

      • One Anonymous Bloke 1.2.1
        15 March 2016 at 6:41 pm

        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?

        • weka 1.2.1.1
          15 March 2016 at 7:38 pm

          am I missing something? How do people get ‘the Greens want to bail out dairy farmers’ from this post?

          • Eyre 1.2.1.1.1
            15 March 2016 at 7:52 pm

            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

            • Eyre 1.2.1.1.1.1
              15 March 2016 at 7:53 pm

              Sorry “dairy farms”

            • One Anonymous Bloke 1.2.1.1.1.2
              15 March 2016 at 8:02 pm

              I thought he would be celebrating

              Why, what’s wrong with you? Blinded by hate much.

            • weka 1.2.1.1.1.3
              15 March 2016 at 8:07 pm

              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

            • Matthew Whitehead 1.2.1.1.1.4
              15 March 2016 at 8:25 pm

              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.

            • saveNZ 1.2.1.1.1.5
              16 March 2016 at 9:05 am

              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.

  2. Dazzer 2
    15 March 2016 at 3:42 pm

    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.

    • DoublePlusGood 2.1
      15 March 2016 at 5:54 pm

      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.

      • Stuart Munro 2.1.1
        16 March 2016 at 9:55 am

        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.

    • Jones 2.2
      15 March 2016 at 6:54 pm

      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.

    • Matthew Whitehead 2.3
      15 March 2016 at 8:27 pm

      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.

    • Draco T Bastard 3.1
      15 March 2016 at 4:11 pm

      “You can’t manage what you’re not measuring, and the National Government are clearly not measuring.

      This government doesn’t expect to have to manage. That’s what the market is for.

  4. Brutus Iscariot 4
    15 March 2016 at 4:11 pm

    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.

    • McFlock 4.1
      15 March 2016 at 4:17 pm

      No, an author on The Standard is explicitly calling for the government to show some interest in the economic troubles facing the regions.

      • Brutus Iscariot 4.1.1
        15 March 2016 at 4:18 pm

        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.

        • McFlock 4.1.1.1
          15 March 2016 at 4:24 pm

          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.

        • Natwatch 4.1.1.2
          15 March 2016 at 4:29 pm

          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.

        • Matthew Whitehead 4.1.1.3
          15 March 2016 at 8:31 pm

          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. =/)

          • Sacha 4.1.1.3.1
            16 March 2016 at 7:56 am

            “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?

      • Natwatch 4.1.2
        15 March 2016 at 4:26 pm

        Exactly – thank you McFlock.

    • te reo putake 4.2
      15 March 2016 at 4:27 pm

      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.

      • Draco T Bastard 4.2.1
        15 March 2016 at 4:35 pm

        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.

        • Jones 4.2.1.1
          15 March 2016 at 6:58 pm

          Perhaps we can repurpose it Just Another F****** American-wannabe.

        • s y d 4.2.1.2
          15 March 2016 at 9:37 pm

          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….

    • Draco T Bastard 4.3
      15 March 2016 at 4:33 pm

      Can’t see any implication that anyone is calling for farmers to be bailed out.

  5. McFlock 5
    15 March 2016 at 4:31 pm

    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.

    • Draco T Bastard 5.1
      15 March 2016 at 4:43 pm

      declare a climate emergency in some of the hardest hit areas in order to enable relief efforts

      Yeah, That may not work.

      Olives and that sort of thing, maybe.

      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).

      a coherent regional development plan, from infrastructure to moving people away from cities

      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.

      • McFlock 5.1.1
        15 March 2016 at 4:50 pm

        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

    • Graeme 5.2
      15 March 2016 at 7:31 pm

      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.

  6. Brutus Iscariot 6
    15 March 2016 at 4:44 pm

    “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.

    • McFlock 6.1
      15 March 2016 at 4:58 pm

      🙄

      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.

    • Macro 6.2
      15 March 2016 at 7:53 pm

      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.

      • Brutus Iscariot 6.2.1
        16 March 2016 at 9:02 am

        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.

        • Colonial Viper 6.2.1.1
          16 March 2016 at 9:08 am

          “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.

          • tinfoilhat 6.2.1.1.1
            16 March 2016 at 10:09 am

            “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.

  7. The Gormless Fool formerly known as Oleolebiscuitbarrell 7
    15 March 2016 at 4:51 pm

    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.

    • Stuart Munro 7.1
      15 March 2016 at 5:44 pm

      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.

      • The Gormless Fool formerly known as Oleolebiscuitbarrell 7.1.1
        15 March 2016 at 6:19 pm

        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.

        • miravox 7.1.1.1
          15 March 2016 at 7:59 pm

          “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.

        • Stuart Munro 7.1.1.2
          16 March 2016 at 9:59 am

          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.

  8. Colonial Viper 8
    15 March 2016 at 5:16 pm

    Cows are major emitters of GHGs. Time to halve the NZ dairy herd, not prop up its numbers with tax payer subsidies.

    • McFlock 8.1
      15 March 2016 at 5:20 pm

      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.

      • Colonial Viper 8.1.1
        15 March 2016 at 5:57 pm

        The regions need to be supported.

        And that won’t involve financially supporting dairy farms, which are massive emitters of GHGs?

        • weka 8.1.1.1
          15 March 2016 at 8:11 pm

          who is saying that dairy farms should be propped up?

          • Colonial Viper 8.1.1.1.1
            15 March 2016 at 8:37 pm

            Don’t care who. I’m asking if politicians are about to throw money at GHG producing dairy farms.

        • Matthew Whitehead 8.1.1.2
          15 March 2016 at 8:34 pm

          Don’t think any of the parties are proposing bailing them out at this stage, CV.

        • McFlock 8.1.1.3
          15 March 2016 at 11:14 pm

          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.

  9. ianmac 9
    15 March 2016 at 5:27 pm

    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.

    • b waghorn 9.1
      15 March 2016 at 6:35 pm

      If you did it on a per kilo of solids supplied it couldn’t be fudged.

    • Acting Up 9.2
      15 March 2016 at 7:38 pm

      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!!’

    • weka 9.3
      15 March 2016 at 8:13 pm

      In the 80s farmers also had their land confiscated by banks. Deja vu.

  10. Johan 10
    15 March 2016 at 6:03 pm

    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.

    • Jones 10.1
      15 March 2016 at 7:09 pm

      Losing the land to foreign ownership is a major risk if this is left to the market.

    • Colonial Viper 10.2
      16 March 2016 at 9:12 am

      The dairy industry, fronted by Fonterra has pushed New Zealanders to pay global prices for their products.

      How is it that “global prices” seem higher in NZ supermarkets than in just about every other western country that Kiwis live in?

  11. Ad 11
    15 March 2016 at 6:06 pm

    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.

    • weka 11.1
      15 March 2016 at 7:52 pm

      very smart thinking Ad.

    • Matthew Whitehead 11.2
      15 March 2016 at 8:56 pm

      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…)

      • Ad 11.2.1
        15 March 2016 at 10:03 pm

        With only one electorate between their many MPs, Greens and NZFirst would be free to campaign and reap the rewards.

    • Brutus Iscariot 11.3
      16 March 2016 at 8:54 am

      You’d lose easily that 2-3% from the urban poor and middle class.

      Leave the regions to the Muldoonists in NZF.

      • Ad 11.3.1
        16 March 2016 at 9:08 am

        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.

  12. b waghorn 12
    15 March 2016 at 6:33 pm

    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.

    • Richard@Down South 12.1
      15 March 2016 at 6:53 pm

      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

      • Glenn 50 12.1.1
        15 March 2016 at 7:35 pm

        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.

        • b waghorn 12.1.1.1
          15 March 2016 at 7:43 pm

          “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,??

        • Richard@Down South 12.1.1.2
          15 March 2016 at 9:09 pm

          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…

      • Matthew Whitehead 12.1.2
        15 March 2016 at 8:57 pm

        Any “bailout” should only be considered to stop the land going overseas, IMO.

        • Colonial Viper 12.1.2.1
          16 March 2016 at 9:17 am

          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.

        • Brutus Iscariot 12.1.2.2
          16 March 2016 at 11:24 am

          Why not just tighten the OIA if that’s the problem?

    • weka 12.2
      15 March 2016 at 7:54 pm

      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.

      • b waghorn 12.2.1
        15 March 2016 at 8:01 pm

        I would settle for them excepting a carbon tax and a cgt .

        • weka 12.2.1.1
          15 March 2016 at 8:14 pm

          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.

      • Colonial Viper 12.2.2
        16 March 2016 at 9:20 am

        You asked me who was considering dairy farm bail outs; it seems that you and many other people are mulling over it at least.

        • weka 12.2.2.1
          16 March 2016 at 9:44 am

          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?

    • Graeme 12.3
      15 March 2016 at 9:56 pm

      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.

  13. cowboy 13
    15 March 2016 at 8:38 pm

    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.

    • Gristle 13.1
      15 March 2016 at 9:33 pm

      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.

  14. the Pink Postman 14
    17 March 2016 at 2:25 pm

    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 .

    • McFlock 14.1
      17 March 2016 at 3:03 pm

      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.