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Jamie Mackay: Farmers make more money under Labour?

Jamie Mackay,
Publish Date
Wed, 27 Sep 2023, 9:30am
Photo / File
Photo / File

Jamie Mackay: Farmers make more money under Labour?

Jamie Mackay,
Publish Date
Wed, 27 Sep 2023, 9:30am

There’s an old saying that farmers make more money under a Labour Government. 

With the election just around the corner and a National-led Government looking more likely by the day, I thought I’d explore the prospect that maybe farmers should be careful what they wish for.  

Just in case they’re doing Chris Hipkins, Damien O'Connor, et al a disservice.  

So, let’s go back in history to see if there’s any credence to this adage.  

It’s a rudimentary measurement, but perhaps the easiest tool to gauge farmer income in the past couple of decades is the Fonterra dairy payout, as dairy is our biggest export earner and Fonterra was conveniently formed in 2001. So effectively we’re comparing farmer incomes under the Helen Clark, John Key/Bill English and Jacinda Ardern/Hipkins governments.   

But before we do, it’s an interesting exercise to take a trip down memory lane to see how farmers fared under the two preceding Labour governments – namely the Norm Kirk and David Lange regimes, of the 1970s and 80s, respectively. The dairy factor back then was not as relevant, as sheep farming ruled the roost.  

My memories and musings of the Kirk/Bill Rowling government (1972-75) were largely formed by my farmer father. Despite being a conservative, Catholic, rugby, racing and beer man, he had little time for National and Rob Muldoon. He thought Colin Moyle (the man Muldoon ruthlessly destroyed) was the best Minister of Agriculture he had seen. Moyle gave us the Rural Bank, and was instrumental in getting young farmers into land ownership, but Kirk’s government was economically hamstrung by the first Oil Shock. 

By the time Lange had unceremoniously unseated Muldoon in 1984, I was a young farmer myself, with my feet very much to the fire as Roger Douglas axed farm subsidies overnight and land values tumbled. While the transformational Douglas was somewhat of a visionary, he went too hard, too early, and presided over the toughest period for farming in my lifetime. From personal experience I can tell you farmers did not make more money under that Labour Government! 

So, what about Clark’s 1999-2008 tenure? The dairy boom, which had kicked off in the 1990s, happened under her watch. In inflation-adjusted terms farmers had one of their best years in her final year in office. The 2007/08 dairy payout (milk price and dividend) was $7.66. 

The next peaks happened under Key’s National Government in 2010/11 ($7.90) and 2013/14 ($8.50). But the latter was followed by the two worst seasons for dairy farmers of the past two decades – 2014/15 ($4.65) and 2015/16 ($4.30) - also under Key’s watch. 

And who can lay claim to presiding over a record payout? None other than Jacinda in 2021/22 with a whopping $9.50! 

On the face of it, you could therefore argue there’s some merit to the adage. Unfortunately for Labour, income is only one side of the accounting ledger. And this is where the current government has proved woefully inept and where it will be swept aside by a Blue tsunami in the provinces on October 14.  

Admittedly, Jacinda and Co. had to deal with a once-in-a-lifetime global pandemic. Initially, they were handsomely rewarded, and deservedly so, for how they handled it, forming the first-ever majority government under an MMP environment. Then the trainer wheels fell off. 

Lockdowns that locked us down for too long. A slow vaccine response. A puzzling reluctance to open the borders. A money-printing exercise that inflated inflation, interest rates, the property market, and the number of highly paid bureaucrats in Wellington.   

Then there was the unforgivable kick in the guts for the productive sector, with farmers at the forefront and clearly in the sights of the misguided, woke ideology running amuck on the ninth floor of the Beehive. 

The leading edge became the bleeding edge. In our quest to impress someone at the UN and be world leaders in the fight against climate change, despite our minimal 0.17% contribution to total global emissions, we somehow forgot how we pay the bills in this country.  

We put SMEs (Mum and Dad small-to-medium-sized enterprises) and farming families to the sword. The very businesses that were driving the economy have become hopelessly bound in red tape, suffocating compliance costs, unworkable regulations, and unsustainable increases in the costs of production. 

So back to the original moot. Do farmers make more money under a Labour Government? On the income side of the ledger, who knows? Overall, though, it’s a big fat no. 

The Blue tidal wave is coming to a rural electorate near you.  

In 2020, staggeringly the Nats only won the party vote in one electorate. Epsom. Ironically a seat they didn’t win.  

I’m standing by my two long-standing predictions for October 14: 

1. It’s the economy, stupid. Too many punters are hurting. The incumbents will be punished. 

2. Labour will not win a rural electorate. There will be high-profile casualties in West Coast-Tasman and Wairarapa. Namely, Damien O’Connor and Kieran McAnulty.  

But it might not be all bad news for McAnulty. Providing he gets back in on the list, he could well find himself with a new job come October 15.  

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