28 May 2015

Dairy price drop means Landcorp must stop dairy conversions

Today’s cut to Fonterra’s forecast farmgate milk price means that government-owned Landcorp must stop converting forests to dairy farms or risk doing serious damage to the rural economy, the Green Party said.

“Landcorp needs to stop the dairy conversions until they can show how undertaking more conversions stacks up economically in the face of the lower forecast milk price. All the information that we’ve seen so far suggests that, in fact, dairy conversions may be hurting other farmers financially,” Green Party MP Catherine Delahunty said.

“Many farmers are going to be doing it tough because of the lower forecast milk price and the Government is making it even tougher for them by encouraging more Landcorp dairy conversions. The conversions need to stop.

“Every large-scale Landcorp conversion floods the market with more milk, making it harder for ordinary farmers to compete.

“We need a moratorium on new dairy conversions until the Government owns up about whether conversions are worth it, economically and environmentally.”

Landcorp is in the process of converting 25,700 hectares of forest to dairy farming in the upper Waikato River catchment area alone, according to comments made by Landcorp’s CEO. As at December 2014, the conversions had so far cost $87 million.

“Farmers downstream from Landcorp’s dairy conversions know the damage to water quality and availability that Landcorp’s dairy conversions are causing. It’s becoming clear to farmers that that the conversions are doing economic damage as well,” said Ms Delahunty.

“The Government is out of touch with rural communities if it thinks that it can continue encouraging Landcorp dairy conversions when they have such negative impacts on farmers and their families.

“The Government should be supporting farmers in tough times by telling Landcorp to stop making life harder for them through dairy conversions.

“Cutting down forests and replacing them with dairy cows is not good for the economy or the environment.

“We should be encouraging diverse forestry because it’s good for the economy, the environment, and the climate.

“The bottom line is that the Government needs to show how the Landcorp dairy conversions measure up economically and, if they don’t, then all New Zealanders deserve an explanation why government-owned Landcorp is pursuing a failed strategy,” Ms Delahunty said.

ENDS

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