Feilding Herald

Columns
Thursday, March 17, 2016

The recent announcement about a reduction in the pay-out from Fonterra to its farmer suppliers to $3.90 plus the estimated dividend - which will result in a final pay-out of $4.25 to $4.30 will have a very serious impact on many of our small towns and provincial cities.

It will inevitably lead to further loss of employment opportunities in provincial New Zealand throughout the dairy industry and some service sectors.

However some other sectors that are doing reasonably well such as pip fruit, kiwi fruit, honey, the wine industry, forestry and sheep and beef will provide some opportunity for those displaced by the down turn to find employment - and in many cases close to home.

The Government is very aware of the plight of our dairy farmers and their employees and suppliers.

We are doing everything possible to improve their lot.

The effort put into trade agreements, foreign diplomacy, the investment in MPI to improve border processes at home and in the market place, along with the strong backing for rural support trusts will all assist the recovery.

Perhaps the most effective action the Government has taken though, is to provide a stable economic base which in turn has given us historic low interest rates and strong animal welfare and food safety legislation to confirm our respect around the world as a food producer.

Many of us have lived and breathed the vagaries of farming over a lifetime but this particular downturn in milk prices is very harsh. It is also hanging around longer than we would all like and is causing a great deal of pain for many.

This at a time when the industry has put a great deal of energy and money into improving environmental outcomes and productivity, ensuring the industry is sustainable for the future. Of course this has added a layer of cost to production which is hitting hard at present, but we will collectively gain the benefits from it in the future.

Despite everything, the medium term outlook for dairy is positive. There is strong population growth on our doorstep and more and more people in developing countries are choosing to consume dairy products.

The industry also has the potential to increase the percentage of added value product it produces and is moving in this direction as opportunity allows. It is a difficult challenge but certainly achievable.

In recent weeks I have had the privilege of representing the Minister for Primary Industries at the opening of the Shanghai Pengxin Dairy Academy in Reporoa and the Federated Farmers Dairy conference in Nelson, both of these very positive events despite the challenges the industry faces at present.

The effort put into trade agreements, foreign diplomacy, the investment in MPI to improve border processes at home and in the market place, along with the strong backing for rural support trusts will all assist the recovery.