26 February 2009

Farmers’ prescription for the jobs summit

“The key focus about this jobs summit is to ensure we don’t fall into a trap of creating non-jobs.  Farmers have been there before in the 1980s with subsidies and it’s a trap we don’t want to see other sectors fall into, said Don Nicolson, President of Federated Farmers.

“Anything that hints of protectionism needs to be avoided.  New Zealand is the poster country for being an open dynamic economy.  If any company or organisation proposes protectionist measures, we farmers will tell them to go and read some history books.

“A key part of what Federated Farmers recommends is not to panic.

“We are still selling goods overseas and are now seeing some price stabilisation.  We’re actually pretty upbeat about New Zealand’s economic prospects as there’s no direct protein in a silicon chip.  Everyone needs food.

“Some gentle steps rather than a series of knockout schemes must be the starting point.  This is an argument for treading gently and not thinking big.

“The fact is that Federated Farmers anticipated what was needed for the New Zealand economy and distilled this into a pre-election manifesto last year.  We stand by these recommendations and this can be downloaded at http://www.fedfarm.org.nz/n1046.html.  This covers a much broader remit than the jobs summit alone.

“It’s important that whatever happens the New Zealand economy is not tripped up costing more jobs.  Federated Farmers wants to see rural New Zealand given the infrastructure to create more wealth while building the skills base by getting more people into agriculture.  Finally, research and development is key for a brighter future,” Mr Nicolson concluded.

 FEDERATED FARMERS FOUR POINTS

1.    Not tripping up the New Zealand economy and costing more jobs: The Emissions Trading Scheme (ETS) poses an economic threat to the sector that shields the New Zealand economy from the worst of the current economic crisis.  That sector is agriculture.  The currently suspended ETS sought to include agricultural emissions, but made no sense for either the global environment or the New Zealand economy.  The only viable option to meet emission targets would be to reduce agricultural production.  Given this accounts for 64 percent of all exports, the affect on the entire economy and downstream jobs would be dire. Further, Ministry of Agriculture and Forestry (MAF) modelling suggests many farms would become unviable if agriculture was included. It makes even less sense for the environment when other countries are not including all agricultural emissions in their climate change policies.  The food will still be produced, but it will be produced less efficiently in countries where there is no obligation – the net effect will be higher global emissions.  Taking agriculture out of the ETS will provide certainty and confidence in the agricultural sector to invest in New Zealand, retaining and expanding the jobs base. It will also mean that more food will continue to be produced by the most efficient user of the natural resource - New Zealand’s farmers. 

2.    Giving rural New Zealand the infrastructure to create more wealth: The Federation considers that there is a role for the Government to invest in:

Water storage – presents an easy economic and infrastructure gain.  For each 1000ha irrigated, the Ministry of Economic Development’s study of the Opuha Dam near Fairlie in South Canterbury, confirmed that some $7.7 million is injected into the local community, 30 jobs were created and household incomes boosted by $1.2 million. 

The Federation has called for the cancellation of the “Waterview road tunnel” but to still build the route as an overland road.  The savings, well in excess of $1bn, could be invested in water storage projects throughout the country. 

Let’s plant trees – an echo of the 1930s but New Zealand should set out an ambitious project to plant trees across the country on less productive or marginal land.  This would provide employment in the regions at both skilled and unskilled levels, creating significant permanent forestry sinks to offset New Zealand’s current Kyoto liabilities.

Rural broadband – The Broadband Investment Fund presents an opportunity to reduce the technological isolation of rural New Zealand.  Currently, many parts of rural New Zealand rely on dial up speeds from the 1980s.  Rural broadband will enable rural New Zealand to become a viable place for creative industries and IT innovation related to the productive sector.

Improvements to local roads and rural/provincial state highways – by advancing projects it will retain skills within rural areas while creating intergenerational assets that will increase rural productivity and access to markets.

3.    Building the skills base and getting people into agriculture: Investing in the re-skilling/retraining of redundant workers for a potential career in the agricultural sector.  The sector, despite the drop in commodities, still faces a skills and human capital shortage.  Literally thousands of people are needed to take up farming.  This is needed to cover retirements, people leaving the industry as well as to fill new jobs being created.  Farming is also a highly skilled and highly valued occupation according to the latest Federated Farmers/Rabobank remuneration survey. The Government can aid by helping clear any uncertainty over the future of specialist land-based education and training providers.  The Government can further help by maintaining and increasing funding for agricultural training providers and (in the longer-term) by encouraging schools to promote agriculture as a positive career option.

Federated Farmers Farm Day this Sunday (www.farmday.org.nz) is a chance to see what a career in farming may hold.

The amendment to the Employment Relations Act providing the 90-day probation period for new employees is a positive step. This overcomes any fear rural employers may have in hiring people from non-traditional backgrounds.  Extending this provision to companies employing more than 20 people will enable dairy factories, meat processing companies and other large rural employers to consider people from non-traditional rural backgrounds.

4.    Researching and developing a brighter future: The Federation recommends that R&D funding be concentrated and prioritised for agricultural research and development. New Zealand has among the lowest spends on R&D in the OECD.  The stated position of Federated Farmers is to commit to an R&D spend of three percent of GDP by 2029.  To achieve this means collating all government and other sources of R&D funds and prioritising it for the productive sector.   This may require a degree of central government direction.

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