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Accelerating Our Economic Potential

The Government plans to increase primary sector export earnings by $44 billion over the next decade with a goal of getting 10,000 more New Zealanders working in the sector over the next four years.

Prime Minister Ardern said the sector, which has proven essential for New Zealand during the Covid-19 pandemic, will be vital to New Zealand’s economic recovery.

HOW?

The plan sets a target of lifting primary sector export earnings to $10b a year by 2030 which would bring in a cumulative $44b more in earnings in a decade. If successful, the plan would almost double the current value of the primary sector.

In 2019 the sector accounted for $46.4b of New Zealand’s $58.3b of total exports to June. Arden said that was forecast to increase by a further $1.6b in 2020.

Looking back at their previous efforts I have to say “YEAH RIGHT”.

On one hand they announce a target of lifting the primary sector earnings to $10B a year by 2030 but on the other they have put in place policies around Carbon Farming that once fully implemented are going to cost export receipts of $7B per year forever into the future (Taken from projections made by Hon Simon Upton, Parliamentary Commissioner for the Environment).

All around the country, but especially from northern Hawkes Bay down to the southern Wairarapa, land is being gobbled up by a new and voracious thirst for radiata pine trees, their growth encouraged by a revamped emissions trading scheme, the government's flagship One Billion Trees programme, which aims to reach its goal by 2027, and a forestry fast-track for foreign investors.

With them, they carry the allure of fast-growing carbon sinks and regional development minister Shane Jones' promise of jobs for the "nephews".

But rural communities and some environmentalists are forging an unlikely alliance, pleading with the government to put the brakes on the green rush.

Sheep and beef farmers, watching as their former neighbours' properties are planted, fear the hollowing out of their settlements after the initial flurry of activity.

From Wairoa to Wairarapa, there are stories. Six kids and their families gone from one road; 11,000 sheep and cattle sent to slaughter from a single station as the land is cleared of stock; A volunteer firefighter gone from one settlement, a primary school teacher from another.

A farmer spends pretty well everything in his local town and contributes to that local town.

But with carbon farming, a lot of them plant it, shut the gates and that's it forever until, or if, they mill it.

Here is a deliberate policy of Carbon offsetting which once fully implemented (Upton’s 2075 projection) will wipe out the same amount from our export receipts (7B/yr.) forever. That is before you count the huge social costs and the opportunity costs of growth of the S&B sector in existing export markets which we would have had but now have written off. Doesn't make sense to me and there is no way that this will help the economy to recover.

Then there are the effects on the primary sector from their new rules around water quality.

Fact:

To comply with the Governments new Action Plan for Healthy Rivers, new National Policy Standards for water quality and the Waikato Regional Councils PC1 will require a reduction in farm animal numbers with a resulting decrease in primary production.

Fact:

The over-riding legislation under which this is being done is the Resource Management Act (RMA).

Fact:

The purpose of this Act is to promote the sustainable management of natural and physical resources.

Sustainable management means:

Managing the use, development, and protection of natural and physical resources in a way, or at a rate, which enables people and communities to provide for their social, economic, and cultural well-being and for their health and safety.

Fact:

We all need to do whatever we can to protect and improve water quality in our waterways.

Madness:

The madness starts when we look at all of the proposed new environmental legislation around water quality and realise that the bureaucrats have completely ignored two of the main requirements of sustainable management under the RMA (enabling communities to provide for their SOCIAL & ECONOMIC wellbeing).

The madness gets worse when you realise that with all of the proposed new requirements around water quality, that farming in New Zealand is being singled out as the sole cause of all of the degradation and being required to fix it. With the proposed solutions resulting in very significant changes to the farming industries and their rural supporting communities.

In the Waikato Region alone there has been modelling done that shows the results of the new Action Plan will be a 68% reduction in the dry stock farming industry and a 13% reduction in dairying with a 160% increase in forestry.

The madness is explained when you realise that these figures don’t actually describe the most likely outcomes.

Given that forestry requires a large injection of capital at the development stage then ongoing smaller investments in maintenance and a waiting period of up to thirty years before you can get a return on your investment, the likelihood of all of those farmers that make up the 68% of dry stock and 13% of dairying be able to change to forestry is almost zero.

What is most likely is that they will be made bankrupt and have to walk off their farms and this will then lead to a significant reduction in employment opportunities in the rural towns causing many people to move out in search of stable employment, most likely in the larger cities, leaving a large number of rural ghost towns.

The madness gets even worse when you think about the result of the reduction in primary production from New Zealand’s farming industries. - A reduction in primary exports with the resulting drop in our overseas income and likely difficulties in meeting our balance of payments, and more than likely a recession in NZ.

Then you have to take into account that even though we can stand and shout that we are leading the world in climate change actions, we are in actual fact making it much worse if you take a world view.

This is where the madness is perpetuated again. We produce primary products that are landed in Europe with a lower environmental footprint when landed there, than products produced in Europe. The population of Europe will still need those products to feed themselves and this will only result in them shifting their supplier base to other countries that have a worse environmental footprint than we do.

But that’s all right because we are leading the world and it doesn’t affect us in NZ anyway.

The madness is thinking that we can lead the world in the first place and in the second place ignoring the economic results of this decision making.

To believe that the effects of the new National Policy Standard on Water Quality and the Carbon Zero legislation will allow the food and fibres sector to increase exports, be at the forefront of our export-led recovery and lead the way to a more sustainable economy you would also have to believe in fairies at the bottom of the garden.

There was no denying New Zealand’s primary sector has to adopt more sustainable practices, but doing that, while also achieving huge export growth over the next decade, was not realistic as evidenced by the Local Government report that stated that the results of the new Action Plan will be a 68% reduction in the dry stock farming industry and a 13% reduction in dairying in the Waikato Region alone.

Andy Loader

Co-Chairman P.L.U.G.

Primary land users Group

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