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Alan Wills: Dairy farmers walking the talk

4 April 2014

Dairy farmers walking the talk

Speech by Alan Wills, Federated Farmers Rotorua-Taupo provincial president, to the Maori Research Institute Charitable Trust’s Walk The Talk Conference, Distinction Hotel, Rotorua

Good afternoon and it is my pleasure to take the final spot in today’s programme.

My name is Alan Wills and I am the President of Federated Farmers Rotorua-Taupo.

Before I start to walk the talk, I’d like to properly introduce myself.

I am a second generation Reporoa dairy farmer who, with my wife Alison, farm two properties close to the Reporoa village. One is 104ha.carrying 300 dairy cattle and the other is 180ha. carrying 500 dairy cattle.

We have four adult children and four grandchildren. I am pleased to say that our three eldest children are employed or have businesses in and around Rotorua, while our youngest works for Fonterra up in Auckland.

Hopefully you can see my life is invested in our district.

At this point I would like to mention our National President Bruce Wills. Bruce sends his apology and would have normally given this address.

He had a diary conflict, having returned from the World Farmers Organisation in Argentina yesterday morning at 2am, he was at the inaugural New Zealand Farm Environment Awards in Taranaki last night.

I think he deserves an early night! Oh I need to add that we are not related in any way but have known each other for over 20 years.

So everyone, on this occasion, you have ‘the other Wills’ with you today.

My brief has been to talk to you about “The future for farming and water strategies.”

So firstly, “the future for farming.”

In a nut shell farming has a great future in New Zealand. We have our challenges but the long term future in my opinion is better than just good.

Why? We are naturally good farmers. We have the climate and water availability in some areas to take the vagrancies out of seasonal production. Globally this is called the ‘pastoral sweet spot’ and there aren’t too many countries in the world in it.

We have very good infrastructure here and abroad to effectively market what we produce. We have very focused research and development supporting us to stay on the front foot. Politically, our Westminister type democracy provides stability and stability begets confidence. I can think of one country that is like our twin except for politics and policies that shoots its economy in the foot. Here, nothing is going to fall over by revolution or in a coup.

Finally, we can produce food products in particular that the rest of developing world wants.

All of these attributes are vital in any successful production and marketing process.

You see, back in the mid-1980’s, a former Prime Minister, David Lange, said “that agriculture was a sunset industry.” Nothing could be further from the truth or reality today.

Yes we have had and continue to face challenges. Yet we have, and will continue to meet them. We go forward in the knowledge they’ll turn up from time to time.

Much of the demand for our goods whether it be milk products, beef and lamb, wine, seafood, fruit and fine wool to name just a few, is coming from a rapidly growing middle class in the developing world. China and the Asia-Pacific especially.

Through education, employment, the internet, TV and travel, these people know what they want and what is good for them.

They want quality products, much of it protein based and they want to know where it comes from. Coupled with this is that they want to look good because of their new found life style.

It is mind blowing the impact that the middle classes have in these developing countries, Brazil and Indonesia each have about 200 million people and China and India are in the 1 billion plus club each.

Can’t we see this in the demand and current returns in the dairy industry.

Yes, commodity markets swing but this is the way it will always be when you are supplying new markets as against our ‘old’ northern European marketplace. A market with very little growth in it for us.

The big challenge around this growth in agriculture and dairying in particular is why you are meeting here today.

Land use, Water use, water quality, water storage.

The challenge is finding the right balance between our productive opportunities and the community. Farmers too want water that is drinkable, swimmable and fishable. I can also say my cows want good quality water too.

Other industries have their specific challenges like the impact of PSA on kiwifruit and the fact that there is a belief that they have weathered the worst of it and that better times are here now.

Their research and development and plant breeding organisations have played a significant role in that renewed confidence in that industry.

Improved returns for our sheep meat and fibre industry is a work in progress. Some would say they are struggling to see the progress but it depends on who you talk to. There is no doubt about it that if we can get the industry better organised beyond the sheep farmer’s farm gate, then the pressure to convert to dairy, forestry or some more viable land use, declines.

What is beyond doubt is our ability to do more with less. Productivity. This is the real impact of agricultural science, breeding and extension over a period of 25years. Our ewe flock in is about half of what it was in 1990, but by export volume, we are still exporting similar volumes of sheep meat products. That has all happened on farm and is shared by my industry and our beef colleagues too.

It also means the carbon intensity in each item of agricultural product has fallen by about 1.3 percent each year.

I for one, and I am sure, many people do as well, would like to see the conversion process slowed down significantly.

Better returns for sheep products would do that.

But I also wonder how many in this room are wearing natural fibres as opposed to the stuff which originated in a barrel of oil.

And so to strategies around water.

If takes a village to raise a child, it takes the whole community to improve water quality.

Simply put there has been a small army of advisers from DairyNZ to Beef+Lamb to the processors to the regional council all working on this issue with us.

Then you have the people that I deal with who advise me on how to farm better for productivity and the environment. The two aren’t so different.

As a Fonterra supplier and a dairy farmer, I get audited by the company I part own and then from a regulatory perspective by the regional council.

They check that dairy shed effluent is being spread correctly to my overall compliance with the RMA. There is no shortage of advice and encouragement to help farmers to get across the line. This process has worked well in that we are seeing significantly less issues and prosecutions around effluent management.

Good effluent management represents good business management because it recycles Phosphorus and Nitrogen as free fertiliser. Surely, a win-win for farmers and the environment as I can shave my synthetic fertiliser costs by about a sixth.

Fonterra’s ‘Supply Fonterra’ programme also looks at riparian margins, stock exclusion from waterways and nutrient management. I help to meet the salaries of these consultants just as regional council inspections are done on a cost recovery basis.

Fonterra dairy farmers have spent about $100m to $200m on fencing 22,000 kilometres of waterways around the country. This is all GPS mapped.

Given farm effluent codes continually change, and I can show you out at Reporoa the legacies of old effluent systems we’ve been encouraged to retire, it costs between $50,000 to $250,000 per farmto upgrade effluent systems.

It’s probably conservative to say the industry has spent $3 billion on environmental works since we are currently spending $150,000, over the two farms, to improve storage and extend the underground lateral and hydrant systems.

It is a huge investment in proportion to our business but we are to be heading in the right direction. Farmer buy-in is about ‘let’s do this properly and with plenty of capacity.’

Then we have other advisers and consultants on implementing farm nutrient management plans to keep nutrients within the top soil and not running into the groundwater. Many farmers have also planted trees and created wetlands on their farms.

The farms at home have a common back boundary and we have two streams running through both properties, from the forest to the Waiotapu River.

I am pleased to report that they are all fenced and we have an ongoing annual planting programme of indigenous flax, grasses shrubs and trees. We have also a wetland we are developing too.

I am looking forward to the day that I can show the Grandchildren a Tui or two.

This fencing is all about trapping not just Nitrogen but Phosphorus but keeping sediment on-farm and out of water. There is a heap of work going on and our Iwi partners deserve much credit.

As do scientists and researchers because this is a fast moving field.

I am also pleased to say the NZ River Awards recognised the Ngongotaha Stream as most improved in our region.

The sheep and beef farming Heather family have invested blood, sweat and tears doing their bit over a long period of time. Neil was my Federated Farmers predecessor and has a real passion for the environment as a great planter of trees and retiring land for conservation.

Neil and his family, who have been on their land for very nearly 100 years, have a heap of skin in the Rotorua Catchment issues. Their future, as is that of other farmers in the catchment is uncertain at the moment.

Some of you may have seen a recent press article on the improved state of rivers in the Taranaki region. There is still more to do but they are tracking in the right direction.

Irrigation is used by some as a dirty word when in fact modern systems are like the star ship enterprise and are very high tech.

Capital costs for an irrigation system are around $5,000 per hectare and employ what we call precision agriculture.

If we take Precision Irrigation’s variable rate irrigation system, it uses GPS technology in conjunction with its customised Field MAP software. Individual sprinklers on centre-pivot or lateral-moved irrigators adjust application rates for different crops or soil types.

As well as avoiding unproductive areas like tracks, lower application rates can reduce overwatering, run-off and associated nitrate leaching. They also carry ground penetrating sensors and this is a long way from the less visible but inefficient flood irrigation border dyke systems

Another type of work I would like to share with you is that being done by groups of farmers throughout New Zealand.

Out at Reporoa, Alison and I are involved with 25 other farmers in a study known as “Tomorrow’s farms today.” I saw a DairyNZ report recently which said that there were 11 such groups in operation. Our Tomorrow’s farms today group is working with a facilitator, Alison Dewes. We are looking at sustainable and resilient business practices coupled with our nutrient footprint.

We live in challenging and volatile times, the weather, exchange rate, milkprice and those of nutrient issues but I am pleased to say that all of us are reasonably well positioned with our management processes and nutrient footprint to respond to any further challenges going forward..

I would like to make some comments around the local lakes catchments.

Lake Rotorua, for a long time, has been in everyone’s frame regarding water quality. It has been for a long time in a bad way. A relatively shallow lake, with geothermal activity around the edge, a caldera, which had for many decades suffered from urban runoff, human, industrial and farming contributions. We were and remain highly involved.

We are farming in a transparent glasshouse and Rotorua is still collecting more and more wastewater as it extends its catchment systems to take sewage tanks away from the lake edge.

The average take of wastewater on a daily basis, excluding industrial waste, is 200+ litres per man, women and child. This of course needs to be processed and spread into the forest which is now overloaded, so Rotorua has got an extension on its consent to discharge nutrients into the lake.

Surely that will only be on a temporary basis until they can spend the capital to get a better system.

There is also a gorse problem in the lake catchment contributing, according to recent science, 30 tonne of Nitrogen into the lake annually.

So for a long period of time the quality of lake water and who needs to do what to put it right, has been a contentious issue.

Eleven years ago it was reported in the NZ Herald, “That farmers were taking much of the blame and at heated public meetings some angered local residents called for an end to all dairy farming around the catchment.”

And you know what, none of them have done anything wrong. It is not like an effluent spill or an industrial accident where there has been a system break down. Modern farming and the city have been here for over 100 years, but Iwi have farmed for ten times longer.

With regard to farming here, a collaborative process is underway. In early 2013, Todd McClay brokered an agreement with Federated Farmers, Te Arawa, Rotorua District and the Bay of Plenty Regional Council.

Known as the Oturoa Agreement, it details a 20 year time frame, the need for cooperation, Nitrogen and Phosphorus reduction plans and regular reviews.

Also in place is a Stakeholders advisory group, or STAG, designed to offer the opportunity to discuss and plan a way forward to improve water quality in the lake. I understand it is working reasonably well

Science is being applied to the lake and on-farm changes are being made. We now have a lake where, in 2012, the medium term target was a trophic level Index of 4.2 but we came in at 4.1. The lake is improving.

The thing that we all need to appreciate here is that Lake Rotorua is a complicated beast with many players involved.

Compare this to the Rerewhakaaitu catchment, another local lake.

Nobody is there except for 26 dairy farmers and 12 years ago they stepped up to take responsibility for the welfare of their lake. It has taken time but 12 years later, they have their lake almost at the TLI that they’d set for themselves 12 years previously. Their success has been well documented but is sadly not so well covered in the media.

The point I want to leave you with is this; the farming community is well resourced to play its part in finding solutions and is playing its part in improving water quality. We have an extensive infrastructure funded by the farming industry to help us keep on the front foot and none of us want to be known as polluters.

On and off farm there is an attitude that we want to play our part in improving water quality. THERE IS A WILL TO BE THERE.

As it has taken place over a long period of time, it will, in most cases, take time to correct the issue. Given realistic time scales we are and will get there benefiting everybody.

The key thing is that we all go in as a collaborative process where we all talk, listen, respect and engage.

Finally, here is my chance to invite you on-farm.

Next Thursday (10 April) in fact, at the farm of Thomas Blackett & Stacey Lepper, 2014 Bay of Plenty Farm Manager’s the year.

It is at 10am in Waimana and you can get details from either farmday.org.nz or the NZ Dairy Industry Awards website.

This couple speaks volumes about the calibre of farmers.

Thomas placed third last year’s Dairy Trainee of the Year contest but stepped up this year to win the Farm Manager title. He is also 28 and was a design engineer for Fisher & Paykel while Stacey is 27 and was a lab technician for AgResearch.

Forget what you think you know about farming until you’ve seen it for yourself.

Thank you everyone.

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