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Politics matters

Politics matters

Final speech delivered by Bruce Wills, Federated Farmers National President, to Federated Farmers 2014 National Conference, Palmerston North


I want to start this, my final address as National President of Federated Farmers, with a thank you.

Thank you for the privilege of being your President, thank you for your support, and thank you for all the work you continue to do for Federated Farmers and farming.

Three years has flown by.

I have enjoyed doing ‘my bit’ to help farming remain profitable and sustainable, and like our own aspirations with our farms, I feel I have left this organisation in better heart than I found it. I will return to the hills of Hawke’s Bay later today knowing there is a very capable and competent team to take it from here.

Before signing off I want to reflect on the two things that have absorbed much of my time in this role, the economy and the environment.

The economy
Farming confidence is high and some sectors are close to being as strong now as they have ever been.

Our dairy farmers have just received their highest pay-out in history and there is a quiet optimism in the dry-stock sector with the ‘China affect’ now benefitting red meat and wool.

Food and fibre represents an extraordinary 70 percent of this country’s merchandise exports and if done well is entirely renewable. We are well on the way to doubling the value of our agricultural exports to $64 billion by 2025, on the back of an exploding world population and rising standards of living.

I cannot stress enough the importance of free and open trade. In six short years, China has become our biggest export partner as well as our biggest import market.

When I joined the Board of Federated Farmers, in 2008, our two way trade with China was $8 billion. Last month we broke through $20 billion and we are on track to exceed $30 billion within the next six years.

Our 2013 trade deal with Taiwan is ramping up quickly and the Trans Pacific Partnership (TPP) remains a prize we must pursue with all the vigour we can.

No question, we have some challenges.
In recent days the New Zealand Dollar has approached all time highs against both the US Dollar as well as the Trade Weighted Index. This will be a significant headwind and may well prompt a slowing in further interest rate rises.

I have continually cautioned about our very high debt levels.

I note a large monthly increase of $842 million to the end of May reaching a total of just under $53 billion now loaned to our farms alone. In light of global uncertainty across many areas I am not sure how sustainable this sort of debt level is.

A few years ago Australian farmers had $70 billion of rural debt and things looked okay. Then came a serious weather event and now $10 billion of this is ‘non performing’ with a good portion of it unlikely to ever be repaid. We run the same risk here.

I have learnt in this role that ‘politics matters.’

For the past six years we have had a Government that has been largely supportive of agriculture. Should we have a change of Government on September 20, this is unlikely to continue to be the case.

Putting these challenges aside, what I have also learnt from my three years with the World Farmers Organisation is that New Zealand farmers are the envy of the world. Everywhere I travel people are stunned how a small island nation, a long way away, can be such a powerhouse when it comes to producing food and selling it competitively to the rest of the world.

I have learnt that we are a grass fed economy and what happens on our farms absolutely matters on Lambton Quay and Queen Street and all the towns in-between.

We are some of the best farmers on the planet and Agricultural exports will continue to pay the lion’s share of this country’s bills for a long time to come.

The environment
This is the flip side of the economy’s coin, the natural resources, which allow us to keep our food and fibre businesses forever renewable.

Three years ago I called for a more open and honest discussion about farming’s impact on the environment.

We have come a long way. The Land & Water Forum got us talking with all the interested parties and we listened to the concerns of others and have pursued a more collaborative approach to resolving our differences.

Getting agreement is not easy but having the science and being well informed on the issues is the key to making sensible progress. We have engaged a lot with parties right across the economy/environment spectrum and this organisation has gained significant credibility from its more reasoned and reasonable approach.

Some believe it is about winners and losers, I don’t. Farmers understand the ‘black and green’ bit well, it is difficult to invest in environmental innovation without running profitable businesses, and we certainly can’t keep farming without resilient long lasting farming practices.

The big issue of my time in this role has been water. How do we maintain and improve its quality in the face of a growing population, and an expanding and changing farm business environment?

The main focus has been the nutrients we lose from our farms finding their way into our streams, rivers and lakes. We can sort phosphorus, which is largely about good management. It is the diffuse nitrogen leaching that remains our biggest challenge.

All farmers, that I know, strive hard to be profitable and most do a wonderful job looking after their land and their water. Being sustainable is good business, and wasting expensive nutrients just doesn’t make sense.

We have seen a rapid land use change to dairying in the last twenty years. This has pushed onto lighter soils and in some areas we are seeing too many nutrients being lost. The science is telling us this and farmers have been responding for some time by fencing water ways, riparian planting, preparing strict nutrient plans and adopting more efficient irrigation.

In some sensitive areas more needs to be done, and again farmers are responding by building feed pads, herd homes or other means of controlling effluent runoff. Less inputs and reducing cow numbers are further options, and more science is needed for some. I am very encouraged at how quickly farmers are responding to this challenge.

I had the privilege last week to be in Christchurch to judge NZ’s top 10 supreme environmental winners from all around the country. They are outstanding operators leading by example, running profitable businesses, but well and truly meeting their social and environmental responsibilities as well. I think it is telling that the national winner was a large scale intensive dairy farm, on some of Canterbury’s lighter soils. This is exactly the sort of farm at the sharp end of this economy/environment conundrum that we are trying to solve.

Mark & Devon Slee milk 2,580 cows producing 1,830 kgMS/ha, or 475kgMS/cow, but with precision farming, smart science and exceptional management, are leaching the same nitrogen they were leaching in the mid ‘90’s with 70% more cows. Their immediate focus is on reducing their nutrient losses even more.

This is a clear example that we can and must do both. Whilst running efficient profitable businesses, we must do this within sustainable environmental boundaries. All the other nine finalists had very similar stories to tell.

I need to congratulate the CEO of Fish & Game, who took up my challenge of coming to this awards evening to see for himself the great results that our leading farmers are achieving and to follow this up with a Fish & Game media release that quoted the following:

“Dairying has never won the top national award before,” says Fish & Game Chief Executive Bryce Johnson. “In winning the coveted Gordon Stevenson Trophy, Mark and Devon are demonstrating that environmentally sustainable and profitable dairy farming is not only possible, but up there alongside the other farming categories that have previously won the top national award.”

To ensure all New Zealanders prosper we must continue to grow our largest industry but we must also look after our environment.

This is our challenge; and as I pack my bags and hand over the reins I am more convinced than ever that this is entirely achievable and our farmers are well on the road to making this a reality.

Thank you.

ends

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