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Farmers warn agricultural policies are ‘economic poker’

Press Release – Federated Farmers

Federated Farmers is calling upon the Labour and Green parties to revise their policies towards agriculture. “While Federated Farmers is apolitical, it would be irresponsible not to warn the Labour and Green parties of the risk carried by their respective …9 November 2011

Farmers warn agricultural policies are ‘economic poker’

Federated Farmers is calling upon the Labour and Green parties to revise their policies towards agriculture.

“While Federated Farmers is apolitical, it would be irresponsible not to warn the Labour and Green parties of the risk carried by their respective agricultural policies,” says Bruce Wills, President of Federated Farmers.

“The primary sector generates over half of New Zealand’s entire foreign exchange earnings so we cannot afford economic poker.

“The current policies of the Labour and Green parties also risk making the family farm a folk memory. The only farmers who’d flourish would be those capable of farming on an industrial scale and I don’t think Kiwis want that outcome.

“As a former banker I am concerned at the overall risk to farm viability. Fast tracking farm biological emissions into the Emissions Trading Scheme and introducing ‘resource rentals’, could result in farm business failures.

“Since the introduction of the ETS in 2010, farm fuel and electricity expenses have increased. Yet it’s the way the ETS has worked its way into everything from freight costs to feed and even pest control, which has bitten the hardest.

“If farm biological emissions are forced into the ETS in 2013, Beef & Lamb NZ estimates it would cost each sheep and beef farm $40,000. The cost for dairy would be much higher.

“In this season, $40,000 represents 21 percent of the average sheep and beef farms forecast profit before tax. If biological emissions were in the ETS over the past ten seasons, farms would have generated less than the average household income for five while two seasons would have seen big losses.

“While $40,000 is a conservative estimate for dairy farms, it is 12 percent of this season’s average forecast profit before tax. If applied to past seasons, 2008/9 would have seen big losses and 2002/3 would have returned just $8,759 as the average profit before tax.

“Resource rentals on things like water create additional financial risk. With reduced profits rural land prices could be further weakened sparking a banking crisis of our own making. There are a lot of unintended consequences at stake here.

“Federated Farmers is asking both Labour and the Green parties to recognise there are few means to mitigate farm animal emissions, aside from reducing livestock. Fewer livestock mean fewer exports and reducing exports limits public spending choices.

“I believe most Kiwis want a flourishing export sector serving a world in need of more food. Exports create national wealth and national wealth creates options for everyone.

“How to grow these exports while reducing our environmental footprint are the agricultural policies we’d like to discuss,” Mr Wills concluded.

For a copy of Federated Farmers 2011 Manifesto, please click here.

ENDS

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