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Feds: Winter Is Coming, But It’s Not All Gloom And Doom

Farming has been one of the economy’s life rafts during the COVID-19 lockdown but as Katie Milne told Parliament’s Epidemic Response Committee this morning, "winter is coming" for the sector - and not just the freezing weather.

The Federated Farmers President told MPs the double whammy of the drought and reduced capacity at meat processing works meant many farmers were carrying into the colder months more stock than they would wish, and feed was very tight. Grass and crop yields were down.

Winter, in another sense, was the dampener on primary produce prices that would likely stem from world economies crashed by the virus crisis. The same happened after the GFC.

"Meat that was getting $5-something a kilo is now bringing in $3, if we can get it off the farm. The milk returns (per kg of milk solids) had $7 in front of it this year but there are predictions next year it will be $5," Milne said.

While the sector was working as hard as it could to keep things going, "farming will not come out of this unscathed," she told the Committee.

Federated Farmers had particular concerns about the lockdown impacts on businesses downstream of producers and growers which help keep farming running every day - "the suppliers to the guy who fixes the hydraulic pump, the guy who imports the tractor tyres".

The organisation also sounded a warning about the potential for signalled government regulation in the environmental space to reduce agriculture’s earnings at a time when farmers - and the nation - can’t afford it. Work by agriculture sector agencies and Local Government NZ suggested the impact of the Essential Freshwater package, if not modified, could cut agricultural earnings by 10-30% in some regions.

If pause was pressed on those regulations "that wouldn’t kick the can down the road" on progress because farmers were already underway with a host of environmental initiatives and work streams, she said.

Green Party co-leader Marama Davidson asked Milne and Feds Vice-President Andrew Hoggard if there were employment opportunities in those farmer-led environment and catchment improvement projects already underway in many parts of the country. She was told that was definitely the case, and extra government investment could boost pest and wilding pine control programmes, and riparian planting, for example.

"We had the Taskforce Green programme...what about Taskforce Farm?" Milne said.

While Federated Farmers applauded some of the business stimulus measures being talked about, it rejected any notion of returning to subsidies, quotas and other protectionist policies.

"We’re glad the (Trade) Minister (David Parker) is still talking about the need for trade open borders. We all know that exporting is the economic driver for New Zealand."

If New Zealand gets protectionist, nations we trade with will get protectionist right back at us, Milne said.

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