Difficult days for dairy as income slips
New Zealand’s dairy industry is going through difficult times.
Many farmers are heading into their third loss-making season in a row. Many are deep in debt and most won’t have paid themselves for some time.
Meanwhile, sharp-eyed overseas investors are looking for a bargain.
No one wants that. There’s no point in seeing good farmers on efficient farms walking off the land and it being snapped up by off-shore interests.
National is making like a possum in the headlights. It has been in denial for months now. Rural communities need leadership and confidence that their government is doing something. It has a big stake in this. Some experts estimate that 25 per cent of dairy farmers are in trouble. John Key puts it at 10 per cent. Taking the lower figure that’s 1,200 farms, 800 of which would be family farms, and an area equivalent to 175,000 hectares – that’s larger than Auckland and Christchurch combined and seven times the 26,000 hectares sold into foreign ownership last year.
National shrugs and says ‘that’s life’. But we’re talking about families who have worked the land for generations, and took on more debt to expand when the government told them to. It’s not good enough for National to turn their back and let family farms be swallowed up by overseas buyers when times get tough, especially when this is a problem they helped to create.
And it’s not just those hundreds of farming families, but all of us, who pay the price if that happens.
The dairy industry’s woes have a real impact on the rest of the economy, from rural areas through to central Auckland. That’s reflected in MYOB’s latest Business Monitor, which shows 21 per cent of SMEs are feeling the effects.
It’s why we need a summit – where Fonterra, Federated Farmers, government officials, banking reps, and retailers sit down in a room, put their heads together and make an action plan.
But that’s the short term. In the long term we need to strengthen and diversify our economy. Right now we are totally reliant on one company (Fonterra) selling one product (milk powder) to one country (China). That’s not a recipe for success.
We need an economy that supports innovative, new industries that can pay a high wage and create good opportunities. We need a Government that is ready to make the changes necessary to make our economy fit for the 21st century.
‘‘Many farmers are heading into their third loss-making season in a row.
The downturn in the Fonterra payout has created enormous pressure for dairy farms.