Mike's Minute: Why are we making life harder for the farmers?

Author
Newstalk ZB,
Publish Date
Thu, 13 May 2021, 10:12AM

Mike's Minute: Why are we making life harder for the farmers?

Author
Newstalk ZB,
Publish Date
Thu, 13 May 2021, 10:12AM

The Fonterra capital changes announced last week have a story behind them.

It's a complex business, and Andrew Kelleher explained them very well to us Friday, look it up if you missed it.

This is important because the farmer is gold to this country, Fonterra is our biggest business, and dairy and agriculture are saving us, given the other big game in town is closed.

Now, as Andrew put it, Fonterra have come to the conclusion they have reached peak milk. That doesn't mean the world is over milk and dairy, because it isn't. As the world grows, the middle class want good food, and that's what we do.

So, Fonterra's move means producing things in this country is getting harder. Between the rules and attitude of the government, making stuff is an uphill battle.

A couple of things happen as a result of that. It costs more to make the same thing, therefore, you need to recoup that cost or start losing margin. And being part of the industry is less and less attractive.

Land use, production volumes, climate change and soil issues are all the stuff that’s being heaped on the farm and farmers. Life is being made harder and harder.

In other words, the government is killing the golden goose. The same way they attacked oil and gas exploration, or live cattle exports.

They’ve started talking water use, fencing, slopes, pugging, and pasture rotation. In other words, the government is in the paddock and none of this means more milk or dairy.

The same out-workings will come to businesses all over the country with the new workplace reforms and so-called fair pay deals. It kills productivity, it limits expansion, it stifles growth and certainly has a chilling effect on entrepreneurialism.

Having fewer cows might well suit their climate change objectives. They might well be able to go to the UN and wax lyrical about methane emissions. But none of that pays the bills.

Farmers pay the bills to the tune of billions.

The fact Fonterra is having to rearrange themselves so significantly is an indictment on this country's objectives. If we were a multi-dimensional mega economy, maybe they could mount an argument.

But we do tourism and farms. One is currently crippled; the other is now being suffocated.