Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


Drought to cost farmers $1.24 billion

19 March 2008 Media statement

Drought to cost farmers $1.24 billion

The drought currently dogging many parts of rural New Zealand is forecast to cost farmers around $1.24 billion this financial year, Agriculture Minister Jim Anderton said today.

A Ministry of Agriculture and Forestry (MAF) report estimates the impact of recent extreme dry weather across New Zealand as removing $1.24 billion from the farmgate, as a result of falls in production and increases in unexpected costs such as feed supplementation.

The report says the cost is based on the change in "farm profit before tax" between the original budgeted positions prepared in July last year and an updated budget prepared in February this year. Those budgets were compiled as part of MAF's Farm Monitoring model.

The analysis shows that the cost of the 2007-08 drought is $894 million for dairy farming and $345 million for sheep and beef farming. That works out as $25,200 for the average sheep and beef farm and $79,400 for the average dairy farm. However, as these are average estimates across New Zealand, farmers in more acutely affected regions are facing much larger losses.

Some individual sheep and beef farmers are forecast to have income reductions in excess of $100,000, resulting in overdrafts being capitalised back into mortgages and reducing equity at a time when interest rates are high.

Jim Anderton said that while the cost of the drought was significant for dairy farmers, their overall financial position in this financial year was still significantly better than last financial year, because of the much higher dairy milksolids payout.

"Sheep and beef farmers are in a very weak financial position, following two years of poor profitability. The drought couldn't have come at a worse time in the commodity price cycle for our dry stock farmers.

"Significant flow-on effects are likely next financial year because of expected lower lambing percentages, reduced wool production, reduced capital stock, and animals in poorer condition going into next spring.

MAF's Farm Monitoring models do not estimate the cost to the country, or the impact on GDP, from the drought. This is significantly more complex to model and will not be known until the financial year is complete.

"There can be no question that the impacts of this drought on farming families, rural communities and the rest of New Zealand are severe and will be felt for several years to come."


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On Why Labour Isn’t Responsible For Barnaby Joyce

As a desperate Turnbull government tries to treat the Barnaby Joyce affair as a Pauline Hanson fever dream – blame it on the foreigners! We’re the victims of the dastardly New Zealand Labour Party! – our own government has chosen to further that narrative, and make itself an accomplice.

Evidently, the National government is similarly desperate for anything that might discredit or derail the Ardern juggernaut, even if that means throwing Internal Affairs Minister Peter Dunne under a bus More>>


Treaty: Agreement In Principle Signed With Moriori

“The Crown acknowledges Moriori was left virtually landless from 1870, hindering its cultural, social and economic development. The Crown also acknowledges its contribution to the myths that the people of Moriori were racially inferior and became extinct." More>>


Susan Devoy: Call For Inquiry Into State Abuse Reaches UN

Race Relations Commissioner Dame Susan Devoy is in Geneva and has asked a United Nations committee to urge the New Zealand government to initiate an inquiry into the physical and sexual abuse of children and disabled people held in state institutions. More>>


(Not National): Cross-Party Agreement On Pike River Re-Entry

The commitment was signed this afternoon by the leaders of Labour, United Future, The Maori Party, and the Green Party and, together with the earlier commitment by New Zealand First, means that there is now a Parliamentary majority behind the families’ fight for truth and justice. More>>



Mental Health Foundation: 'Positive First Steps'

“The heavy reliance on pilots and targeted approaches in the package announced today makes it plain that additional funding will be needed so that activities that work can be made available throughout New Zealand,” says Mr Robinson. More>>


'Gift' To NZ: Synod Considers Third Christchurch Cathedral Option

Members of the Anglican Diocese of Christchurch will consider three, not two, options regarding the future of the ChristChurch Cathedral... The new option is for the Synod to gift the Cathedral building to the Government for the people of New Zealand. More>>


PM's Presser: Labour's Water Policy 'Reckless', Says English

The Labour Party has "bumbled into" its policy to charge for water in a "reckless" way that would put a Labour-led government on a collision course with both Maori and other water users, Prime Minister Bill English said at his weekly post-Cabinet press conference.. More>>





Featured InfoPages

Opening the Election