Farmers slammed over subsidy

A Golden Bay dairy farmer has slammed other farmers in the area for taking Covid-19 wage subsidies, asking how they are eligible when both milk and beef prices are good overall.

Lone Star Farms Ltd owned by millionare American expatriate, Tom Sturgess, is one Golden Bay business to receive the subsidy. It got $258,547.20 in wage subsidies for 40 employees.

Beef farmers, and dairy farmers who also run a beef component, have struggled through the lockdown as sale yards around the country were closed under level 4 restrictions.

This has left them with limited options to trade and higher costs of feeding livestock they are unable to get rid of due to backlogs at processing plants.

However, critics say the wage subsidy was brought in to protect jobs, not to cover a shortfall in profits.

Rockville dairy farmer Garth Strange wrote a letter to the GB Weekly and published on May 1, after searching farm operations on the Government’s Covid-19 wage subsidy employer search website.

‘‘I was staggered to see some of our local farmers have taken the opportunity to apply and receive some quite large payments,’’ he wrote.

‘‘How, at this time of very good prices for both milk and beef overall and a reasonably good growing season, can farmers think they are eligible?’’

When contacted, Strange would not comment further. However, Stuff searched a number of Golden Bay farms, which showed three had received payments.

Lone Star Farms Ltd is a sheep and beef farming enterprise consisting of five properties in the South Island, including Puponga and Aorere Valley in Golden Bay.

Speaking from his home in Golden Bay, Sturgess said it was highly probable that the company would end up giving most, if not all, of the subsidy payment back to the Crown.

At the time of the application, however, Lone Star Farms was seeing a strong negative cash flow due to Covid-19, with half the annual revenue not expected to show up in the near future.

Sturgess said his farms were paying a high cost feeding stock that couldn’t be processed.

This was how the subsidy was designed to work, he said.

‘‘It was designed well, as a monetary stimulus to keep money outflowing into the economy and keep it alive, and keep people in jobs and protect business,’’ he said.

‘‘It has a fail-safe in there, a review, which asks you to make a projected revenue in good faith, and if in the end you didn’t qualify for it, you can pay it back.’’

Richard Enterprises Ltd, a dairy farm with a beef component owned by Brendan and Elizabeth Richards of Rockville, received $29,488.80 for five employees.

Nalder Holdings Ltd, another dairy and beef farm owned by Judith Nalder of Rockville, received $28,118.40 for four employees.

The Richards could not be reached for comment, and Judith Nalder declined to speak to Stuff.

Concerns have been raised within the meat, dairy and kiwifruit industries, all classed as ‘‘essential services’’ in the Covid19 response, about some players claiming large wage subsidy payments.

Fonterra has not applied. The heaviest criticism has been aimed at meat processors, which have claimed around $84 million — $77.7m of which went to just two companies, Silver Fern Farms and Alliance Group for 11,000 employees — while several other big-name operators have not claimed.

Critics have said meat prices were good and expected revenue in the sector this year to hold steady on last season, and maybe even exceed it.

Federated Farmers Golden Bay president Wayne Langford said farmers needed to be careful when applying.

Their accounts needed to clearly show a 30 per cent drop due to Covid-19 restrictions.

‘‘The rules and regulations are very clear and a large audit team is in place to check these accounts after the fact. Any breach will be expected to be paid back.’’

He said the loss of income subsidy was to pay employees only, but any farmers he’d talked to had taken the subsidy to keep employees on the farm.

While dairy farms had remained somewhat unscathed, some beef operations were ‘‘really hurting’’, he said.

‘‘Farmers who have not been able to get animals away have had the pressure of seeing the beef prices drop, while at the same time they have had to buy in extra feed to feed them— a double edged-sword.’’

Langford said every farming operation was different. The community needed to ‘‘band together’’ and be kind— not ostracise farmers and families under stress.

‘‘How, at this time of very good prices for both milk and beef overall and a reasonably good growing season, can farmers think they are eligible?’’

A letter to the GB Weekly