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PGG Wrightson / Silver Fern Farms settlement delay

MEDIA RELEASE

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1 October 2008

PGG Wrightson / Silver Fern Farms settlement delay

Federated Farmers has linked the delay of the PGG Wrightson / Silver Fern Farms settlement on upheaval in global finance markets.

Federated Farmers Meat & Fibre chairman, Bruce Wills, said:

“Raising capital in today’s financial market is very difficult, given the current turmoil in the financial sector and markets. The difficulties PGG Wrightson face could well be the advance guard for an international credit crunch reaching our shores.

What it really highlights is just how important farming is to the New Zealand economy. The poor GDP figures released late last week are further proof of the importance of food production to ‘New Zealand Inc’.”

Mr Wills observed the GDP figures, released last week, showed a 0.2 percent decline in the June 2008 quarter after a decline of 0.3 percent in the March 2008 quarter – confirming New Zealand was in recession. The last time there were consecutive quarters of decline in economic activity was March 1998, as a result of drought and the Asian economic crisis. Agricultural activity over this quarter decreased by 0.6 percent.

New Zealand has been fortunate that the reduction in dairy production volume has been offset by a better dairy payout. According to the Minister of Finance, Hon. Michael Cullen, if it wasn’t for the dairy receipts, New Zealand would be in an even more serious trouble. Food exports accounted for an estimated $17.8 billion in foreign exchange earnings in 2008.

Mr Wills added:

“Far from the sunset industry predicted by some in the early 1980s, food production is to New Zealand what Nokia is to Finland. What those living in cities sometimes forget is that New Zealand’s farmers provide the glue which binds our economy. We export goods the world needs.

“While drought looks like being a major factor in the current recession, campaigns like T150, targeting $150 for lamb, and a reduction in the compliance burden on farmers are highly important, if New Zealand is to farm its way out of recession.

“New Zealand’s sheep and beef farmers have long called for consolidation and improved marketing. That is something T150 will address for lamb exports by working with the processors. Clearly what happens with PGG Wrightson / Silver Fern Farms is important to us all. We just hope that this is a small blip on the way to a vibrant future,” Mr Wills ended by saying.


ENDS

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