Bigger challenges than TAF

Speech by Willy Leferink, Federated Farmers Dairy chairperson, to Federated Farmers 2012 National Conference in Auckland

Good morning fellow dairy farmers.

Irrespective of whether you supply Synlait or Open County Cheese, Westland or Tatua, following Fonterra’s TAF vote you’d think the road ahead is now clear for dairy farming.

While great to see an 85 percent turnout, I shake my head at the 15 percent who were like possums in the headlights.

Can I please make an appeal to farmers.  We must turn out in big numbers for DairyNZ and LIC too.  It shouldn’t take TAF just to get dairy farmers to sit up and take note.  As for those who didn’t vote, where on earth were you?

To me farmers of all types are the AB’s of the New Zealand economy. When Federated Farmers President Bruce Wills told Italian taxis drivers where he was from, he got the reply ‘All Blacks’ and ‘beautiful country’.  I think we forget how lucky we are here.

As I speak, the Dairy Industry Restructuring Amendment Bill continues to progress through the Parliament.

My message to MP’s is to listen to what a majority of Fonterra shareholders voted for and to put that into effect via the DIRA amendment now before you. The risk is a B constitution no body wants sitting there like a ghost from the past given Fonterra’s AGM is still months away.

Take the constitutional amendment that narrowly failed and put that into the DIRA, especially the size of the Shareholders Fund, the number of dividends any one farmer can trade into it and the maximum number of units any one outside investor can hold.

While Parliament’s at it, what about allowing Fonterra to set its own share price policy.

Let me tell you that if you think TAF is the big issue facing farming, it is nothing compared to the next hurdle we will have to jump as an industry and as a country.

That is the implementation of National Policy Statements, or NPS’ as they are known.

I want to focus on the National Policy Statement for Freshwater management but there are others lurking under the bushes.

Believe it or not, a current starting point for water quality benchmarks is pre-human New Zealand, say 900AD.

I’d love to turn back the clock, wouldn’t we all.  We’d still have Moa and all sorts of long gone animals about.  It also means we wouldn’t have possums, stoats or rabbits.  We wouldn’t have giardia in our water tourists introduced in the 1970’s, or that didymo, some freshwater angler introduced last decade.

Thankfully, the Land & Water Forum knows 900AD is a really silly place to start. It wants water benchmarks recognising we live in houses, we clear land for industry, we drive cars, we farm animals and we grow crops. Everything humans basically do affects water.

LAWF and Federated Farmers wants water benchmarks based on New Zealand in the 21st century and not some past we can never go back to.

The NPS for water requires regional council’s to set limits on freshwater by 2030. It is meant to be about engagement with communities to establish robust and durable solutions.  These can take time so it’s meant to be about quality, rather than quick processes and frameworks.

Like with the Rates Inquiry, where councils took one recommendation to use debt but ignored everything else, some councils saw the bit about limits in the NPS and skipped right past working with the community. The places where tensions are most felt include Southland, Otago, Canterbury, Horizons, Bay of Plenty with other regions in varying stages of setting limits

We seem to have schizophrenic policies from our government and the opposition.  On one hand they want lots and lots of export earnings from us.  That means more dairy cows and greater production from those cows, but, from much less land as our cities sprawl outwards.

On the other hand, they’ve put in place policies that give over eager regional council staff a blank cheque guaranteeing their wages as crusaders for the environment.

We’ve had 172 years of active encouragement to grow we’re now meant to swing into reverse gear over the next 18?

So who is running the show, is it the government or council officers?  Frankly I don’t know but it feels as if we’ve given the keys of our Caterpillar D8’s to the bureaucrats.  They found the light switch, what’s next?

To some ‘green-necks’, as Gareth Morgan labelled them, that will be a good thing.  I think to anyone wanting a heart bypass or a university degree, it is not such a good thing.

It also denies the progress we’re making as farmers and doesn’t have any kind of perspective.  So here is some.

In Holland, home to the tallest people in Europe, the nitrogen balance per hectare is around 229 kilograms, in Belgium it is 184 and in Germany, it is 113.  Here in New Zealand, it is 46 kilograms per hectare.

Given those other countries are green aware but less efficient than us, I think councils need to take a deep breath and look closer to home.  We’ve been told in one crusading regional council, half of the consents relating to urban sewerage and wastewater are either expired or non-compliant.

Doesn’t that tell you something big like we’re all in this together?

Federated Farmers is working with our industry partners and other sectors in the primary industry to pull back to reality what some regional council planners have in mind.

My concern is that guidance, consistency and agreements around the implementation of the NPS now coming out of the Land and Water Forum, may come to nothing, once the regional council horse has bolted.

Take Otago Regional Council.

Their plan sets limits on the amount of phosphorous, nitrogen, sediment and bacteria in the water leaving farms. It creates strict standards as to where stock can access water and sets Otago-wide Nitrogen limits.

These are measured by an annual limit of 30 kilograms of Nitrogen per hectare and an even stricter annual limit of 10 kilograms, if a farms falls into a sensitive groundwater zone. 10 kilograms of Nitrogen per hectare puts farmers out of business.

No one in this room wants that outcome. Is this what we dream of when we talk about national standards?

There is no doubt in my mind that dairy farmers want the same thing as every other community group.   We want to live life in a sustainable manner so there is even more left for our kids and our kids’ kids.

The problem is that for some of us, ‘sustainable’ has different meanings.  As Bruce Wills wrote in the Sunday Star Times, the economy needs the environment but the environment needs the economy.  If you focus only on one the other will suffer until it bites you on the bum.

Sections of the media have lambasted us as some ‘terrorist of the environment’. Take 60 Minutes that only featured beef cows on a story about dairy pollution. I think it reinforces my belief that some leading journalists can’t tell the difference between a cow and a bull.

Sustainability is balancing the needs of the environment with our economic social and cultural needs.  It is in the RMA and all four need to be in balance to achieve sustainability.  I get that.

My question to government, some regional councils and sections of the media is, do you?

For those sitting across the table from us, this wrong portrayal makes us look as if we are an unreliable negotiation partner.  This can make coming to an agreement very difficult.

It is very important that we that live and breathe what we do on our farms because we are our own best allies.  We can build on the trust most New Zealanders have in us.  For the second consecutive year, ‘farmer’ has been ranked the 14th most trusted occupation in New Zealand by Readers Digest.

We are sandwiched between childcare workers and dentists but are 20 places higher up the list than journalists and PR people.  Sorry to rub that in, but it tells me the public also have eyes and ears.  They drive in our majestic countryside or fly over it.  They know that while we are far from perfect, the vast majority of farmers do give a damn.

We maybe 14th but we are a long way off firefighters at number one.  It means we need to get involved at every level so we can tell the true story, time and time again, until it finally sinks into the heads of some politicians and some in the media.

It is not farming or the environment, it is farming and the environment that count as one.

The way we handle environmental problems in New Zealand is not very helpful.  It sets up community group against community group until a commissioner makes a decision, which, in general, is challenged until the money runs out in the Environment Court.

We’ve created a whole industry I label the anti-productive industry and the end result is usually one nobody wants.

Canterbury is showing some promise here, with its Canterbury Water Management Strategy. Communities are negotiating outcomes rather than the previous process which turned community groups into total enemies.  Horizons Regional Council was shown up by commissioners in the way it squandered millions of ratepayer’s dollars trying to make the science fit their policies.

So we need to get on the front foot.

We need to project what our industry will look like in 10-15 years time because it tells us what we need to be working on now. Easier said than done I know, so I’ll paint you two pictures of the future.

One is where we carry on as we do currently, slowly getting stifled by regulatory requirements, which turns New Zealand back to what some see as clean and green. We desire pristine rivers and outstanding landscapes for us all to enjoy, but we have no money to pay for it.  DOC has been disestablished and the hills are covered in millions more hectares of gorse and broom leaching as much nitrogen as the dairy farms they replaced.

There are some Fonterra shareholders left in the country but the bulk of them live on the East Coast of Australia.  Some 80 percent of Fonterra’s milk comes from offshore, as Fonterra farms closer to the end consumer.  All because dairying is too difficult in New Zealand.

Rural communities have dropped below the poverty line as there is no reinvestment without long term security. And if you want to see what that looks like go to heartland America; some of the largest farms sit among dirt poor communities.
The other picture is where we get on the front foot as I mentioned before and really engage with other community groups who understand our roadmap.  More importantly, they back us to deliver sustainable high value agriculture with real outcomes for all.

I know this is not in the interest of the environmental lawyers as there is no argument for them here. In this scenario, a big part of Fonterra’s milk is still produced on-shore, most of Fonterra’s shareholders still live here with thriving rural communities generating tax revenues the cities need for their sustainable transport.

In this picture public servants are enablers helping communities to make informed decisions, not imposing them from on-high, or worse, being decided in the Environment Court.

You do not have to ask what picture I want to be part of.

So I propose we get together with our industry partners to develop a plan for the future benefiting current and future Kiwis.

It will help develop the policies that balance those four tests of sustainability.  We must become master of our own destinies again, but do not think we won’t have to change.  There will be big shifts needed in how we farm. Paradigm shifts in fact.  We can and will do more because agriculture has done that for thousands of years.  Right from when we first started herding and milking cows.

In the meantime, let us grab low hanging fruit without ending up in an environmental or economic pickle barrel.  To get to where we want to go, we need a lot of science and new leadership to form smart consensus solutions, as opposed to compromising on complex problems.

Thank you.