National farming review oct 2013 by NZME.

OCTOBER 2013

Resource Management Act reforms look good for farmers p10-11

NATIONAL POLICY One Plan verdict Changes should benefit farmers and the wider community P3

Water is priority New Labour leader David Cunliffe joins the water debate P7

REGIONAL POLICY Local body elections What does it take to be a councillor? P9

Taranaki gains Protection of significant natural areas wins over regulation P13

INDUSTRY GROUPS Meat and Fibre Is a volatile market really bad for the farming sector?

P17

Fonterra lessons The dairy industry needs better communication, co-operation

FEDS GO GLOBAL

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New Zealand leads on water plan — p5

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National Farming Review October 2013

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PERSPECTIVE

Wiser not to waste

INSIDE

Feature:

RMA reforms on track

Regulars: Perspective

National Policy

3-6

Counterpoint . .

Regional Policy

9-13

Economy

Weather . .

Employment

Dairy

Meat and Fibre Insider

Managing Editor: Conor English Ph: 04 494-9189 cenglish@fedfarm.org.nz Editor: John Donnachie Ph: 04 470-2162 jdonnachie@fedfarm.org.nz Memberships: April van Dam Ph: 0800 327-646 avandam@fedfarm.org.nz Advertising: Lloyd Davy Ph: 021 225-4610 lloyd.davy@apn.co.nz ■ ISSN 1179-4526

World perception brings New Zealand’s need to store water into focus, Federated Farmers president Bruce Wills says. I recently returned from a United Nationsfunded trip to Stockholm to present at the World Water Week Conference. Seventy per cent of the world’s available water is used for agriculture, 20 per cent for industry and 10 per cent for domestic use. Water is integral for the production of food and with farmers representing half the world’s hungry, it is important to have a farmer’s view. There were 2700 delegates and I think I was the only farmer there! As the largest water users and with the solutions to world hunger on our farms, we were conspicuous by our absence. We heard a lot about the challenges this planet faces. How for 768 million people a glass of water is still a luxury, a dream; how 2.5 billion people have unreliable or no access to electricity (90 per cent of global power generation is water intensive), how for the first time in our history over 50 per cent of the world’s population live in cities and the challenges this presents to water. We know that the key drivers for increased water use are increasing urbanisation, increasing population and increasing wealth. Highlighting this challenge we have seen the world’s population treble since 1900 but over the same period the water use per person has increased six-

fold. Planet Earth is now screaming at us through a language called water. The conference talked about ‘‘trans boundary hydro diplomacy’’, a BRUCE WILLS term we don’t President hear about in New Zealand. Transboundary being rivers and river basins crossing country and state boundaries. An example is Africa’s Nile River: at 6700km it is the world’s longest, passing through 10 countries before reaching the Mediterranean. What the country at the source of the Nile does matters a lot to those nine countries downstream. Add to this difficult ‘‘sharing’’ issue an exploding population (in 1950 six million people lived in the Nile basin; by 2050 the UN expects this to be 60 million) and you get a clear sense of the global water challenges we have. The discussions in Stockholm highlighted for me that New Zealand is in

an incredibly privileged position as regards water. Hardly a country in the world can match us in terms of water availability and water quality. New Zealand’s overall rainfall is the same as Australia and 2.5 times the whole of the UK. We have plenty of water; our discussions are more about ‘‘water quality’’, whereas for much of the world the issue is ‘‘water quantity’’. I came home more convinced than ever of the need for more water storage. Conference delegates looked at me in complete disbelief when I told them that in our little country we let 95 per cent of all our rainfall run unused, out to sea. Of course we need to continue to focus on farming with less impact on the environment — farmers are very engaged in this — but taking a more global view, we also need to stop beating ourselves up so much about this water issue. Compared with the rest of the world we have vast quantities of comparatively pristine water. We are in a lucky and privileged position. Yes we do need to use our water carefully and sensibly but with the challenges of population growth, increased urbanisation; climate and food security the really important thing for this country now is to store more water.

The America’s Cup reminds us how fast technology evolves. The benefits of technology should be available to all New Zealanders, no matter where they live. Sometimes governments can look at issues and see benefits for our city cousins, which is great, however they forget that ‘‘rural people are people too’’ and the benefits of technology and infrastructure also apply in rural areas. The one difference, however, is that often in rural areas the deficit is far greater to start with. There are a number of issues we are working on in this area. We successfully lobbied on the Rural Broadband Initiative, which saw an additional $250 million invested in rural broadband, on top of the initial $48m. This includes an additional 154 cell towers to enhance mobile coverage. Mobile devices are the way of the future. Machineto-machine data transfer is often talked

about. In agriculture our animals are the ‘‘machines’’. We need a network that allows data to be sent from our animals and soils. A larger cell site footprint is vital. CONOR ENGLISH The governChief executive ment is also in the process of auctioning the 700MHz spectrum that is used for television. This is a good spectrum for rural areas, as it goes further and has better performance. Following input from Federated Farmers, the tender requirements for rural coverage were increased to assist and enlarge that footprint.

All mail services are under review as New Zealand’s mail volumes follow the international downward trend. Proposals suggest a three-day week service. There needs to be an alternative before we can agree to any change. The road maintenance formula, used to allocate central government money spent on local roads, is also under review. The emphasis needs to be on the entire network, not just congestion. It is critical in any international supply chain that the first few miles of road from farm to factory, then to port, are well-maintained. Whether it’s telecommunications, post or roads, it is critical that we have good infrastructure to meet the export double target. It’s also about people. So when you’re talking to politicians never let them forget those five critical words — ‘‘rural people are people too.’’

Five very important words

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October 2013 National Farming Review

NATIONAL POLICY

One Plan High Court decision By Dr Tessa Mills & Richard Gardner It’s been more than a year since the Environment Court notified the first of its decisions on the Manawatu-Wanganui Regional Council’s One Plan. The Environment Court decisions have been a huge disappointment for New Zealand farmers and growers. However, Federated Farmers is pleased with the decision released by the High Court on September 24. The ability for farmers and growers to fight the Environment Court decision was limited due to process, and to bringing appeals on points of law to the High Court. In that regard, significant changes to the Plan and particularly the rules regarding surface water quality were unlikely to be made by the High Court. The decision is pleasing for Federated Farmers as it shows that on one point our appeals have been upheld. Although other appeal points were not successful, the decision has provided useful guidance on how some aspects of the water policies of the plan are to be implemented, which is very positive for our members. Horticulture New Zealand and Federated Farmers represent the interests of farmers and growers in New Zealand. It felt compelled to lodge High Court appeals on the One Plan in the interests of their members but also in the interests of the wider New Zealand community. Regional plans impact all New Zealanders and, in that regard, it is critical such plans represent a good balance between the four pillars of wellbeing, social/cultural, environmental and economic. It was with this balance in mind that Federated Farmers appealed the Environment Court decisions. The appeals focused on decisions concerning the reference to the nutrient management model Overseer, the use of discretion by the council in granting consents to farm, and the consideration toward the economic consequences of the plan notified by the Environment Court. Our concerns were neither the use of regulation on farms nor the use of Overseer to devised nutrient management plans for farms. It was about how regulation and the application of the Overseer tool were applied in combination. In June, the Horizons ManawatuWanganui Regional Council notified Federated Farmers of an implementation plan which outlined how the Environment Court decisions version of the One Plan was to be implemented on farms. The proposed plan recognised that due

CHANGES BENEFIT ALL

Regional plans impact all New Zealanders, so it is critical such plans represent a good balance between the four pillars of wellbeing, social/ cultural, environmental and economic. to the release of version 6 of Overseer, which occurred after the Environment Court decision was released, the estimated N loss from most farms within the Horizons region was now higher than N loss values estimated under the previous Overseer version. The consequence of using Overseer 6 to estimate current N loss from farms meant far fewer farms were able to comply with the controlled-activity rule and must now apply for restricted discretionary consent. Add to this the requirement that all farms must obtain restricted discretionary consent to reach the N loss limits, as specified within the One Plan, within four

For Tararua dairy farmer Jim Galloway and other Horizons farmers the changes to the One Plan implementation herald a collective sigh of relief after seven years of uncertainty and distress. When the council first notified the Horizons One Plan there were no resources for farmers to call on. Mr Galloway said the One Plan requirements were unreasonable and physically impossible to meet. ‘‘I don’t think the council considered the feasibility of the rules,’’ he said. ‘‘We looked at models where reducing stock to one and half cows per hectare would still make no difference with meeting Nitrogen limits.’’ It also left him having to install more fencing on run-offs and streams. This was never provisionally requested in the plan. Moreover, an independent economic study estimated a $60 million downturn to the Tararua District should the plan, as notified and endorsed by the Environment Court, be adopted. ‘‘The reality is we could have been out of business. We would have had to reduce stock and lay off staff, which would have had a detrimental effect on the community with less money going round. ‘‘That’s what happens, everyone is affected and misses out,’’ he said. Mr Galloway is hopeful the

proposed implementation plan, which has now been given a pathway through the High Court decision, will offer more opportunities and a brighter future for farmers nationwide. He described a ‘‘massive shift’’ where councils are better informed and farmers have been up-skilled towards effluent management and are investing in better processes. ‘‘We have more certainty now with long-term consents available,’’ he said.

years and the size of the challenge and uncertainty facing farmers, growers and the council becomes apparent. The plan notified by the council in June implements the One Plan rules and policies in a way that provides all farmers within the priority water management zones a pathway to consent and an assurance that consent will be granted over a reasonable timeframe of 10 to 20 years. This, coupled with farms being required to show a trajectory of N loss reduction that is achievable, rather than compliance with an often unachievable fixed nitrogen leaching loss limit, is a practical and appropriate solution.

Without the implementation plan, there are no assurances existing farmers would be able to continue farming within the priority water management zones. The High Court decision confirms what was proposed within the implementation plan notified by Horizons back in June. This is a practical and reasonable enactment of the rules and policies of the One Plan and is an appropriate pathway. Federated Farmers must continue to work closely with regional councillors and staff to ensure that the implementation plan as proposed continues to gain momentum and that the uncertainly surrounding the One Plan and its implementation is reduced.

BIG WIN: Tararua farmer Jim Galloway believes proposed changes to the One Plan will benefit not only farmers, but also the local economy.

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National Farming Review October 2013

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NATIONAL POLICY

Water quality measures need work By Elizabeth McGruddy Senior policy advisor Water quality is improving in New Zealand — it’s official. In late July the Ministry for the Environment released their Water Quality Report (2000-2010) State of the Environment, which showed that overall concentrations of nutrients and bacteria are stable, or improving, at most monitored sites. It also showed that water quality is generally improving in both urban and pastoral areas. The report was based on data collected from hundreds of sites over a 5- to 10-year period; and the results are a solid endorsement that things are generally on the right track across the country. The Ministry intended the report as an indicator of the state of play at a national level, while work is ongoing to improve the robustness of environmental monitoring and reporting. A key area for improvement should include the currently crude classification of sites as being either ‘‘urban’’ or ‘‘pastoral’’. The data presented in the report shows rivers and streams in, or downstream of, urban areas have the highest concentrations of nutrients and bacteria. The report notes, however, that urban streams make up less than 1 per

ON THE RISE: A Ministry of Environment report shows that water quality in New Zealand is improving.

cent of the total length of New Zealand rivers. By contrast, nearly 50 per cent of New Zealand waterways are classified as being in catchments predominantly

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in pastoral land-use. Rivers and streams in pastoral catchments have the widest range in concentrations, from the highest in the country to some of the lowest.

The report speculates that such variability may be due to high variability in erosion risk, combined with a range of land-use intensities associated with different farming types. Indeed it may be. Or it may be due to the varying contributions of towns and cities in predominantly ‘‘pastoral’’ catchments. Currently, an area with greater than 25 per cent pasture will be classified ‘‘pasture’’ unless the urban land-cover is greater than 15 per cent. Very few sites meet this threshold. From more than 700 sites in the national database, just 13 are classified urban. Seven of these sites are in Auckland, three in Wellington, two in Nelson and one in Northland. Every other town and city in New Zealand — from Carterton to Christchurch, Hokitika to Hamilton — is missing from the dataset. Or, more accurately, they have disappeared into a ‘‘pasture’’ category. Across most catchments in New Zealand, land-use is a matrix of town and country, and both can take credit for efforts to maintain and improve water quality. The next national environment report should reflect that continued improvements are mostly likely to be the result of town and country working together — not ‘‘pastoral’’ shouldering either the brickbats or the bouquets for everything outside Auckland.

Operational pest management By Mark Ross Established on July 1, OSPRI manages the TBfree New Zealand and NAIT programmes. Its mission is to be the organisation of choice delivering creative operational solutions for New Zealand’s primary industries. However, farmers can rest assured that the bovine tuberculosis (TB) control programme will remain a major focus of OSPRI, and eradicating the disease from wild animals and farmed cattle and deer herds is still firmly in its sights. OSPRI chief executive William McCook said the delivery and improvement of New Zealand’s already world-leading TB control and NAIT programmes will continue. ‘‘We will utilise the expertise within the two programmes, which is already showing value to the agriculture sector in several areas,’’ said Mr McCook.

When a herd is diagnosed with TB, an investigation is undertaken to uncover the cause of the infection. ‘‘This is an area where the TBfree New Zealand and NAIT programmes complement each other,’’ said Mr McCook. As the data held by NAIT continues to grow, TBfree New Zealand will be able to effectively trace animal movements back to the initial infected herd. ‘‘While OSPRI continues to deliver the TBfree New Zealand and NAIT programmes, it also has a wider remit, opening up countless opportunities to enhance New Zealand’s primary industries through innovation, research and development,’’ said Mr McCook. Potential areas of opportunity include risk management, the extension of NAIT and organisational services to other species, as well as the design and delivery of partnership programmes between government and industry.

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October 2013 National Farming Review

NATIONAL POLICY

Federation’s global take on water By John Donnachie Federated Farmers president Bruce Wills said his trip to last month’s United Nations World Water Week Conference in the Swedish capital Stockholm was a fascinating experience. Mr Wills thought he was the only farmer amongst 2700 delegates, which was remarkable given the conference theme, and the fact farmers are the biggest users of water throughout the world. It is estimated that 70 per cent of all available water (industry uses 20 per cent domestic 10 per cent), is used by the agriculture industry and farmers represent half of the world’s hungry. The Federation president said the conference focused closely on the increasing demands on water by a burgeoning urban global growth. He said the conference left him with one lingering thought — here in New Zealand, we are in a ‘‘lucky and privileged position’’ with such plentiful reserves of water. ‘‘Our discussions reinforced, for me, the absolute importance for New Zealand to store more water,’’ he said. Mr Wills attended the conference on behalf of the World Farmers’ Organisation (WFO). He told fellow delegates of New Zealand’s commitment to sustainable development towards water for all producers and communities.

INFLUENTIAL: Bruce Wills and World Farmers’ Organisation chief executive Marco Marzano in Stockholm.

During his presentation, ‘The post2015 agenda: Triggering Action on Water’, Mr Wills spoke of the progress made in the past 20 years, which enabled 2 billion people to gain access to improved drinking water. From 1990 till 2011, up to 250,000 people each day gained access to improved sanitation. He said the Millennium Development goals for water were bold, with the number of people worldwide without sustainable access to safe drinking water and basic sanitation to be halved by 2015. The key to ensuring success depended on ‘‘clarity’’ and a ‘‘bold reach’’. This, he said, would shape future sustainable development goals prompting global action.

Addressing depression By Kara Lok Policy advisor The rural sector has banded together to address depression in the farming community in the form of the Farmer Mental Wellness Stakeholder Group. The group, set up by Federated Farmers and Dairy Women’s Network, hopes to see a reduction in farmer suicides and improved mental health services for farmers. Recent Ministry of Health data shows a significantly higher risk of suicide in rural areas than in urban areas. The suicide rate for people living in rural areas is 16 per 100,000 people compared to 11.2 per 100,000 people in urban areas. The highest number of rural suicides is seen in the 25-44 age bracket, with men showing significantly higher rates than females. Chief Coroner Judge Neil McLean recently revealed that 541 New Zealanders

took their own lives last year, with an alarming number of these people farmers. The stakeholder group hopes to see improved data on depression in the farming sector. At present most information on why farmers become depressed is anecdotal. There is much speculation that financial issues and pressure from the banks result in depression amongst farmers. In most cases it is an accumulation of factors. Rural communities have disintegrated over time so social support networks have declined. Previously farmers participated in discussion groups, however these groups are declining due to the emergence of online social forums such as Facebook, mobile phones and email. Farmers are increasingly isolated and burnout is also an issue. By working with the other major rural sector groups, the Federation hopes to help farmers experiencing depression.

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Water was, without doubt, at the core of such development. The WFO is fully behind this vision, agreeing that water security and food security were inseparable. To produce more food we need more water — and lots of it. Mr Wills said the sustainable intensification of agriculture is critical to meet present and future demands for food. Developed countries needed to increase food production by 70 per cent by 2050 to meet demand from a rapidly increasing population. He told the conference that agriculture had a significant role to play, by delivering entrepreneurial opportunities, economic growth and jobs. The agriculture industry had solutions to solving world hunger, he said. To achieve that goal, water infrastructure, in the form of irrigation, drainage and conservation, was crucial. This was attainable through technology, investment and, above all, co-operation with others. Mr Wills informed the conference that a shift to more intensive farming in New Zealand during the last decade had challenged water quality, but encouragingly, a recent Ministry for the Environment report conducted over a 10-year period, showed 90 per cent of the water quality test sites displaying either stable or improving readings. This proved that better management prac-

tices, stock exclusion and riparian plantings were producing tangible results. Wise water management was key to surviving droughts and floods. Using water more efficiently and effectively meant more crop per drop, freeing up supplies to ensure secure provision of food and other services, whilst restoring ecosystems. They are all interconnected, he said. The conference heard it was important to have a global imperative for a sustainable intensification of agriculture. In April the WFO agreed on a progressive trade policy, moving to eliminate export subsidies, seeking substantial reductions in ‘‘trade-distorting domestic support’’ with a focus on assisting those countries which are developing and impoverished. Mr Wills concluded his presentation advising delegates to focus action on river basins. Science assisted good policy and every situation had its challenges, but collaborative partnerships were key to enduring progress, he said. Farmers and farming agencies across all levels ‘‘from the water basin through post-harvest distribution networks to international trade forums will help deliver a water-secure and food-secure world’’, he said. ■ Bruce Wills’ trip and expenses were funded by the World Farmers Organisation.

National Farming Review October 2013

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NATIONAL POLICY

Power lines on your land By Nigel Billings & Jacob Haronga Spring is here and power companies are starting to amp up their activities on private land. Federated Farmers’ members whose farms provide part of the platform for distribution and transmission lines have ready access to a knowledgeable advice service in the Federation. What they may find, at this time of year and over summer, is that they will likely be approached for access to the lines for a variety of purposes. These might include visual inspections, basic maintenance, tree-trimming, and possibly more substantial line redevelopments. Federated Farmers is also noticing a number of new builds at the smaller end of the scale, where farmers are being approached for easements across their farms, to host feeder lines or re-routes of the existing network. Federated Farmers has an established set of credentials in electricity transmission and distribution assets on private land. It has experience working on behalf of individual landowners and community groups, as well as working with Transpower and local lines companies. The Federation has developed an understanding of the issues around maintenance and upgrade, as well as access to the land for that purpose. This experience has been built on the

HERE TO HELP: Federated Farmers provides a vital resource for farmers offering advice about power lines on their property and helping them negotiate with power companies.

basis of working with members on individual situations and negotiations. These can be difficult and stressful — there is no textbook on dealing with the needs of organisations with relatively high maintenance infra-

structure on private properties. Through working with landowners, however, the Federation has become familiar with the broad variety of interactions between landowners and power companies, and can bring this

to a member’s enquiry. Some of this knowledge has been distilled into a series of fact sheets that provide headline guidance on a raft of processes in this area. One popular topic, that is updated every year, is the landowner’s rights in terms of access for maintenance of the lines. As farming has intensified, farmers are increasingly noticing this imposition and seeking to manage it. They want to be informed of the statutory requirements, in terms of notification of any visit and their ability to influence proceedings to minimise disruption to their farm business. The fact sheet on this topic covers all angles — outlining notice requirements for the landowner, especially if notice is written and there is at least 15 working days in play, and reasons and ways that farmers can delay access if they wish. New route acquisitions and substantial upgrades are even more detailed and challenging, and the suite of fact sheets includes insights into the compensation formulae, the role of the Public Works Act, the ins and outs of easement agreements, and the landowners’ right to advice funded by the power company. ■ The Federated Farmers power line fact sheets are exclusive to members and can be obtained by calling 0800 327 646.

Local government reforms continue By Nick Clark Phase two of the Government’s Better Local Government reforms are progressing, with a Local Government Amendment Bill expected to be introduced to Parliament this month. The Bill will cover several issues, including development contributions; infrastructure and asset management; consultation, planning and decision-making; and local governance. All of these changes follow a series of reviews over the past 12 months. Changes to the law for development contributions include narrowing the charges councils can put on new developments; providing an independent objections process; and encouraging direct provision of infrastructure to get costs down. The Government believes these changes will more fairly balance the costs recovered from developers, against those of community benefit that should be paid by ratepayers more generally. Federated Farmers supports the use of

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development contributions, as an alternative to rates, for funding developmentspecific infrastructure. However, it agrees that some councils have used them as a more general revenue source, with little connection between a particular development and the costs being sought by the council. The Federation has even heard of farm buildings being subjected to big charges to pay for ‘people-based’ community facilities in town. We support changes to re-focus development contributions. Councils will be required to undertake longer-term infrastructure planning to ensure that a long-term perspective is taken. Local authorities own nearly $100 billion in fixed assets such as roads, the ‘three waters’ (drinking water, sewerage, stormwater) and flood protection. They are forecasting to spend billions over the coming decades on maintaining, renewing, replacing and adding to these assets. All have longevity, so the Government wants councils to extend their

RESPECT

GROWTH

planning horizons from 10 to 30 years. While supporting the need for councils to manage their assets prudently, Federated Farmers would be concerned if small rural councils were to undertake this level of planning at an excessive cost. In other areas the Government proposes removing planning requirements to reduce compliance costs for councils. This includes streamlining annual plans and removing the need to re-consult on matters already consulted on (e.g., in the long-term plan); introducing streamlined, focused consultation documents (and therefore reducing the use of technical, overly detailed documents); and providing greater flexibility about methods and frequency of consultation. Federated Farmers supports reducing the costs of planning, consultation, and decision-making but it doesn’t want ratepayers to lose the chance to have their say on their council’s spending and rates each year. It is very important to

get in front of the full council every year to reinforce the need to keep spending under control and for a fair and equitable rating system. On the other hand, it is good that councils will be required to report the number of rating units and the capital value and land value of their districts. Federated Farmers supports such transparency as it gives ratepayers the chance to provide better, informed feedback. Federated Farmers also supports moves to provide more flexibility for delivering shared services between councils. It sees this as a way to achieve better service delivery at a lower cost, without resorting to mergers. In the case of mergers we support the extension of Auckland’s local boards to unitary councils to enable more local representation and better service delivery. On balance, the Government’s changes should improve the efficiency and effectiveness of local government and Federated Farmers looks forward to seeing the detail when the Bill is introduced.

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October 2013 National Farming Review

COUNTERPOINT

Labour is making water a priority Labour’s new leader David Cunliffe outlines the party’s new focus on water management As Labour’s new leader, I’ve already made two important decisions to ensure the party focuses on water — a vital resource. I have personally taken on the regional development portfolio. As leader I have a chance to reveal a little about who I am and my interests through my choice of portfolio. I will be actively engaging with rural communities throughout New Zealand over the coming year. As a youth growing up in the small Canterbury country town of Pleasant Point, I spent a lot of time working on farms and in a shearing gang. I realised at an early age that farming is the backbone of New Zealand. The other thing I have done is ask our up-and-coming new MP Meka Whaitiri to take the lead in a new water portfolio. This will ensure issues around water get sufficient priority through our caucus. Meka is Labour’s MP for the Ma¯ori electorate of Ikaroa Ra¯whiti and a former chief executive of Nga¯ti Kahangunu, which is developing significant interests in the Hawke’s Bay. So, why is Labour prioritising water now? Climate change means the West Coast is getting wetter and the East Coast is

getting drier. There will be more droughts and a need for better water management and more sophisticated methods to combat drought. Water DAVID CUNLIFFE scarcity will Labour leader become an increasingly important issue and one that will feature strongly in political debate. There have already been several high profile and contentious debates about water in recent years. In 2010 the National Government rode rough-shod over the democratic rights of Canterbury voters and sacked the ECan regional council. Fourteen elected councillors were fired for failing in their duty to efficiently manage water. Issues around access to water and customary title have ended up in court following the Government’s plans to partially privatise energy companies

such as Mighty River Power and Meridian. Debates over water ownership have opened a hornet’s nest of Treaty claims. Previously when power state-owned enterprises were fully owned by the Crown there was no need to crystallise Treaty of Waitangi rights. But when privatised, access to water becomes a vehicle for private shareholders’ profits and iwi are asking questions about whether their rights have been abridged. The latest water controversy is the mess around the Ruataniwha dam and Conservation Minister Nick Smith’s ham-fisted intervention in the process. Minister Smith appears to have stepped into the process, resulting in the Department of Conservation turning a 34-page draft into a twoparagraph final submission which failed to raise concerns about growing nitrate levels. The Minister then appears to have been less than frank describing the timing of his interventions and actions. It could cost him his job. However, the most important reason we are prioritising water is because its

Water scarcity will become an increasingly important issue and one that will feature strongly in political debate. management is crucial for the health and wellbeing of the farming sector. Labour wants to progress the work of the Land and Water Forum and support collaborative processes to better manage our water resources. We will work in partnership with rural communities to ensure appropriate water storage and management to buttress farmers from drought risks. Doing so will require significant capital investment. We want to work with farming communities to determine how that can be funded. We will create win-wins for our primary industries so farmers can flourish, our environment can be sustained and our public finances be protected.

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October 2013 National Farming Review

REGIONAL POLICY

New kids on the council block By Nick Clark & John Donnachie With local elections virtually done and dusted for another three years, there are a number of new mayors, councillors and community board members about to get to grips with the challenges of governance. For these newcomers, the next few weeks and months will be a steep learning curve. They will need to figure out what their council does and what’s involved with being an elected representative. Aptitude, commitment and good intentions can only go so far. Information and understanding is what really makes the difference. Te Kuiti farmer Charles Digby took the plunge in 2010, after spending five years as Federated Farmers’ Waitomo District chairperson. He said those years were effectively an apprenticeship. While always passionate about the Federation, it was a relentless surge of rates increases which convinced him to take action and run for council. ‘‘The induction process can be daunting and tricky to negotiate, but I found time spent lobbying the council from 2006 to 2010 had brought me fairly well up to speed with local government rules and processes. The Federation was a great help during this time,’’ he said. Being philosophical and patient was also key to understanding the role, as it can also be time-consuming. Expect to work at least

CHARLES DIGBY

20 hours a week, reading briefing material, attending meetings and workshops. This can impact on both the family and the farm. ‘‘You get used to feeding out in the dark on meeting days. It also helps if you have an understanding wife,’’ Mr Digby said. ‘‘There is no room for egos; you are not going to change the world. Often it is about finding small gains and locking them in, so that cumulatively, over time, a noticeable difference is made. If you can accept this, then the role might be right for you,’’ he said. Mr Digby has no regrets. He is

Western Bay buffer battle over By Rhea Dasent & Nigel Billings The Transmission buffer zones appeal in Western Bay of Plenty has ended, with farmers able to continue farming activities without undue regulatory interference. Buffer zones have shrunk from 37 metres either side of the no-build zone to 12m. This only applies to a few specific buildings. Normal farm structures, such as hay barns, sheds, yards and horticultural structures, can continue as normal under and near lines, as long as they comply with the existing NZECP safety distances. This applies when 12m away from the pylon/pole footing and 10m away from overhanging wires. Only houses, milking sheds, intensive farming buildings (piggeries, chicken barns) and greenhouses need to be outside the 12m buffer zone. While this might set a useful baseline for addressing buffer zone proposals in other districts, the Resource Management Act still applies. Avoidance of excessive and

SUCCESSFUL APPEAL: Federated Farmers’ buffer submitters Rhea Dasent, John Scrimgeour and Nigel Billings.

unnecessary regulation is Federated Farmers’ key objective, and provinces are adopting strategies to achieve this. The outcome in Western Bay of Plenty is positive. Our successful advocacy has demonstrated to Transpower and district councils that landowner goodwill is central to the successful operation of the national grid.

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running again in this month’s local body elections. Local Government New Zealand (LGNZ) is also a helpful starting point, providing information, advice, and workshops designed to ensure newcomers are fully equipped to deal with the challenges and responsibilities that come with office. LGNZ chief executive Malcolm Alexander says councils have a unique place in the leadership and governance of New Zealand as the tier of government closest to the people. ‘‘Democracy requires the active participation of citizens if it is to work well and elections provide a unique opportunity for people to contribute to the economic success and vibrancy of their communities,’’ he said. While LGNZ assists those wanting to be an effective mayor, councillor, or community board member, it is equally important to look at the big picture from the ratepayer’s perspective. Federated Farmers Local Elections Manifesto has good information on what it thinks elected representatives should have at the top of their minds as they go about their work. This isn’t just about keeping a firm lid on spending and rates, although that is crucially important. It’s also about making sure the council’s funding and rating

policy is closely aligned to who uses the services and benefits from them; making sure that core activities, such as infrastructure, public services and regulation, are managed and delivered effectively and efficiently; ensuring that consultation and engagement with communities is openminded and constructive, and decisions are backed by both robust facts and sound principles. Being able to articulate the council’s case in Wellington is also becoming increasingly important. The Federation’s local government spokesperson Katie Milne says the Federated Farmers’ manifesto is a fantastic guide for would-be councillors. ‘‘Anyone considering running for council would do well to look at it. The manifesto outlines our world-view and how we would like councils to be more efficient and fair to rural ratepayers,’’ she says. ‘‘As a guide it illustrates the principles of good governance and how one can become an efficient, conservative councillor.’’ A large proportion of the Federation’s policy work is submitting on local issues, to local councils on behalf of our members, because the Federation recognises the importance of local government. Federated Farmers looks forward to continuing to work positively with councils and their elected representatives over the next three years. We are here to help.

National Farming Review

October 2013

www.fedfarm.org.nz Ph 0800 327 646

FEATURE

RMA reforms head

Reform of the Resource Management Act is imminent. This controversial and divisive legislation is being revised to meet the ‘‘contemporary values and priorities’’ of all New Zealanders. But what does it mean for farmers? John Donnachie investigates.

Since its inception in 1991 the Resource Management Act has frustrated many farmers leaving them powerless and bitter, while lawyers have arguably got wealthier. Environmentalists have assumed a greater impact on land use decisions, providing further disruption and antagonism to farmers. Statistics New Zealand recently revealed $800 million worth of projects had stalled over two years because applicants found the RMA procedures too frustrating. In its current form, the RMA process, not the merits of the project, determines whether or not it proceeds. We have 78 local authorities, with more than 170 resource management planning documents covering 2272 different zones, management areas or policy overlays. By comparison, Scotland, with 5.2 million people, has just 37 comparable planning documents. Furthermore, a past Federation study estimated the RMA collectively costed farmers more than $80m in compliance costs annually. It also established that Federated Farmers spends in excess of $1m representing farmers’ interests in planning

OUTSTANDING: Federated Farmers is confident truly outstanding landscapes will continue to receive the level of protection required, while allowing landowners more involvement in decisions affecting their land under the updated Resource Management Act.

Environment was made aware of in the Federation’s submission against the Reform discussion document earlier this year. The submission was based, in part, on the Federated Farmers project — ‘RMA and Farming — A Farming Six Pack’ published in 2008. It remains the blueprint for getting farmers a fairer deal under the RMA. Regional policy manager Dr Paul Le Miere is pleased our considered and consistent message is gaining traction, advising that the proposed package of reforms broadly reflects most of the Federation’s original six objectives. ‘‘We are both pleased and unsurprised that findings of the independent Technical Advisory Group, established to inform the Government’s RMA reforms, echoed many of the concerns identified by our six pack,’’ Dr Le Miere said. Current proposals are designed to reduce costs, uncertainties and delays which stymie the existing resource management system. This will be achieved with a number of changes to the principles and process sections of the Act. The proposed changes to the principles in Part 2 of the RMA cause the most controversy. The principles describe a set of non-exclusive values and directions that are to be considered when giving effect to the sustainable management purpose of the Act. The all important section 5 purpose of the act, together with the principles in sections 6,

The Federation’s ‘six pack’ ■ Compensate landowners when protecting nationally important values if land use is restricted ■ Mandate consultation with affected landowners ■ Refine DOC’s advocacy role — build trust by turning advocacy into education, information and conservation ■ Streamline resource consents and the plan process — minimise activities that need consents and clamp down on vexatious submitters ■ Enable long-term economic viability by using transferable development rights, trade-offs and creative subdivision policies ■ Acknowledge the changing nature of landscapes by toning down the Act’s emphasis on protecting amenity.

processes each year. Involvement in RMA planning processes is the lion’s share of our policy team and elected members’ workload. This puts us in a good position to understand the strengths and weakness of the Act — a fact the Ministry for the

7 and 8, make up Part 2, with changes being proposed only to sections 6 and 7. Essentially sections 6 and 7 will be merged to remove the hierarchy between environmental matters of national importance and other social, cultural and economic matters for consideration. The logic for this is perhaps best articulated by Environment Minister Amy Adams who, when introducing the reforms, reminded New Zealand that the RMA is not just about environmental protection. It is also our planning law. Federated Farmers understands that point and, other than wanting better recognition of rural production values, is comfortable with the changes. Opponents are focused on the environment, with most concerned amendments will result in weakened environmental protection and flawed decision-making. The fear seems to be that the structural change will render 20 years of case law irrelevant and the addition of explicit social, economic and community values will tip the balance in favour of development over the environment every time. Federated Farmers can see why there is nervousness. These reforms are intended to be more directive and any change to Part 2 demands respect. ‘‘We do accept that there is likely to be an initial period of uncertainty as the new terms are interpreted. But this is true anytime you change a statute and we believe the changes will be for the best, longer term,’’ Dr Le Miere said.

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October 2013 National Farming Review

FEATURE

in right direction DR PAUL LE MIERE Regional policy manager

RICHARD GARDNER Senior policy advisor

He also doesn’t accept the environment is the loser of these reforms. ‘‘Of the 16 proposed matters of national importance, 11 are primarily environmentally-focused. The existing section 6 principles remain largely unchanged. ‘‘It is interesting that opponents focus mainly on the collapsed hierarchy as a negative for the environment, when in our opinion most of the environmental matters of section 7 have been given increased status by being elevated to matters of national importance,’’ he said. Federated Farmers applauds the ministry for doing the hard yards. It believes it was a bold and decisive move. With more than 13,000 submissions made on the discussion document, and a number of changes to the latest proposal as a result of those submissions, the ministry is clearly listening to public concerns. Business NZ chief executive Phil O’Reilly joins Federated Farmers in welcoming the RMA changes. ‘‘We need a better decision-making framework so the environment can be protected and development can also occur,’’ he said. Mr O’Reilly said the merger of both sections 6 and 7 principles was a step forward and would assist decision-makers ensuring ‘‘environmental and development issues were both taken into account’’. Local Government New Zealand (LGNZ) is also optimistic, but has reservations. It is concerned there is more focus on process than planning. The costing also concerns, with the Government effectively

putting the onus on councils to find the budget. Dr Le Miere agreed that often central government has the luxury of an ‘all care, no responsibility’ position with the costs of developing RMA policy being borne by councils, however, the purpose of these reforms is to reduce costs, uncertainties and delays for councils and the public. ‘‘The section 7(c) requirement to have particular regard to the maintenance and enhancement of amenity values is an example where there has been unnecessary costs and impositions,’’ he said. ‘‘In our experience the lines between section 6(b) outstanding natural landscapes and section 7(c) amenity values has been duplicated and blurred inappropriately, causing undue restrictions in modified, working landscapes. ‘‘We are confident that truly outstanding landscapes will continue to receive the level of protection required and we celebrate the commonsense decision to delete amenity values out of section 7. Amenity and landscape issues have caused considerable head, heart and pocket-ache for too many of our members,’’ he said. The lack of economic consideration and inadequate cost-benefit analysis used in decision-making has also been a major issue for Federated Farmers. Part of the Government’s package of RMA reforms includes changes to the offending section 32. These changes have been enacted to address concerns about

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the lack of high-quality information, lack of direction and inadequate consideration of the positive economic and social outcomes. Evaluations under section 32 now require specific consideration and quantification of economic growth and employment opportunities. Though these changes are welcome, necessary and offer some comfort to farmers for future, Dr Le Miere said it’s a shame these criteria weren’t applied to the Horizons One Plan as he believed it would have led to a different outcome. The other key changes designed to address planning and consent process issues is considerably less contentious, with most agreeing the changes were necessary and the goals of shortened timeframes, costs and reducing duplication should be achieved. For Federated Farmers, one of the most notable changes is an increased focus on early consultation, in an attempt to get it right first time. It was satisfying to see reforms include a number of proposed changes intended to increase early and effective consultation with affected parties. It has always been the Federation’s position that the best outcomes will be achieved by increased landowner involvement in decisions affecting their land. Increased consultation is a common theme across the range of proposed planning processes. The changes can be grouped into three categories; improving resource management planning, efficient and effective resource consents and council performance. All three have elements which should benefit farmers. For example, the introduction of a national template to standardise planning documents should help increase consistency and certainty, and reduce costs at both development and implementation stages. The principle of having common definitions and standard terms is supported. These are regularly debated and appealed during development and notified stages. It would reduce stakeholder time and money if there was nationwide consistency. However, as the template will, in part, establish the triggers for consent applications, Federated Farmers will make sure it is fully involved as the draft template is developed. Interestingly, some of the proposed changes around collaborative planning have already been adopted by Auckland

Council, Federated Farmers’ senior policy advisor Richard Gardner said. ‘‘There have been a number of collaborative workshops and constructive consultation among parties. We’re finding processes are rolling out a lot quicker than previously,’’ he said . The Federation is also encouraged to see consent processes streamlined, with provisions to fast-track minor and less complex projects. Submissions and appeals notices will need to be more specific and focused on the contentious aspects not anticipated by the plan. ‘‘Further changes are being made to the notification requirements and together these amendments should speed up planning decisions for those minor, less complex projects while preventing timewasters and vexatious submitters,’’ said Dr Le Miere. Other aspects of the reforms seem geared for the future, such as the requirement for councils to ensure there is enough land available to satisfy projected 10-year growth demands and the signal to relax subdivision controls. These changes should be positive for those farmers wanting to subdivide off a house site or create title for developing farm succession plans. Changes to Part 2 look to strike a better balance between resource use and resource protection. The Federation believes there is still room to be explicit and recognise the value of rural production. The Federation will be lobbying hard to have rural production recognised as the proposals are drafted. With regards to process matters Federated Farmers is confident that Ministry intentions are sound. However, without seeing the draft bill it is difficult to know exactly how the membership and greater New Zealand will benefit. Indications suggest that plans will be more accessible, resource management approaches more consistent and resource consents more focused. These are positives for resource use and protection alike. This is certainly how the Government sees it with the Minister Amy Adams stating: ‘‘We see effective resource management as critically important to New Zealand’s economic, environmental and social well-being’’. It is encouraging that the majority of public debate is about whether the proposals will achieve their intended and desirable outcomes. The Federation believes this sends a strong message to the Government that it is on the right track.

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October 2013 National Farming Review

REGIONAL POLICY

Protection doesn’t require regulation By Kelly Langton Regional policy advisor The New Plymouth District Council recently decided that any likely new significant natural areas (SNA) need not have Resource Management Act (RMA) rules to control how landowners manage them. These rules could have impacted up to 1650 properties. Federated Farmers has long advocated a non-regulatory approach to SNA management, as it believes it is the best way to get landowner buy-in for biodiversity protection. The council’s decision was a major vote in confidence for farmers and supports the Federation’s argument that landowners are the best guardians of their land. It also recognises that to achieve real SNA protection, farmers need support, education and incentives — not rules. Allan Barrett owns one of New Plymouth’s existing SNAs. He understands the RMA requires SNAs to be protected, but feels rules are a disincentive. On his property, Mr Barrett has voluntarily fenced off, replanted and managed the pests on large areas of indigenous vegetation but like many landowners, resents regulation as a landgrab. ‘‘It’s a matter of principle. I don’t want to clear the bush, but I do want to have the right to manage the vegetation in a

way that best suits me and my property. I want to leave a legacy of clean water and a pristine environment. Surely that would meet the intention of the Act?’’ he said. Even though rules can stop the vegetation being cleared, they don’t address more serious risks to biodiversity, such as possum damage and landowners’ existing use rights to graze SNAs, despite the damage it does to ecological values. The council cannot force a landowner to undertake pest management or fencing and imposing other rules only lessens the goodwill of landowners to voluntarily undertake these activities. Taranaki landowners care about biodiversity and invest substantial time, effort and money to protect their patch. It can be seen with the regional council’s riparian planting programme, which shows Taranaki has New Zealand’s highest uptake of QEII covenants through landowners continually exhausting any biodiversity protection funding. The most telling statistic is that in the 12 years to 2008, Taranaki’s indigenous land cover only reduced by 0.02 per cent (or 1 per cent every 600 years), all while the New Plymouth district had no rules prohibiting clearance. This doesn’t include any gains from

planting and regeneration that has occurred more recently. There is no doubt that New Zealand has some seriously threatened land environments. Up till the 1980s, land clearance was encouraged and Government-subsidised. Since then, there has been a mindshift in most landowners, but if we want to continue regaining lost biodiversity we must encourage the behaviour of protection and enhancement. Recognising this, the New Plymouth district is now investigating doubling their Natural Heritage Fund. The council will also write to central Government concerning compensation for landowners affected by SNA regulation. This has been a concern since the Act was introduced. Federated Farmers supports any calls for the Government to address this. SNAs have expenses associated with them, such as mortgage payments, fencing and pest management. Helping cover these costs could address property rights’ concerns and recognise that landowners are faced with costs associated with protecting biodiversity. Vegetation clearance will still be monitored and council will continue reviewing SNA management. If farmers are not taking their biodiversity responsibilities seriously, then the council may be forced to regulate.

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National Farming Review

October 2013

www.fedfarm.org.nz Ph 0800 327 646

REGIONAL POLICY

Commonsense prevails in Waimate By Bob Douglas Great Aunt Agatha would have been delighted in the outcome, but critical of the effort needed to achieve it. The mythical aunt was the example Federated Farmers used when calling for practicality to be used in a decision made during the submission process to the proposed Waimate District Plan. The original proposal required a stock underpass to be installed where there was frequent (defined as more than 25 crossings in anyone year) movement of stock across the road. The rule purpose was quite evident, and worthy of some action. Federated Farmers’ submission recommended the issue be handled through the bylaw process, with the number of stock and the traffic volume also

needing consideration. Council members nodded sympathetically, thanked us for coming — and rejected the submission. This was perplexing, so Federated Farmers appealed to the Environment Court — an expensive step but, thankfully, one that is preceded by mediation if all parties agree. We did go to mediation and Great Aunt Agatha played her part. Great Aunt Agatha has retired from farming but, like many farmers, likes to keep her hand in, so she bought a few hectares near the end of a dead-end unsealed road heading to nowhere and got herself a house cow. The road split the property — paddocks on one side, farm house and buildings on the other, with roughly half a dozen traffic

movements on a busy day. Under Waimate’s proposed rule, Great Aunt Agatha would be required to build a stock underpass if she wanted to milk her house cow on more than six days a year. ‘‘A bit over the top,’’ we suggested. Within minutes the council agreed and another 10 minutes of constructive dialogue saw a mutually agreeable solution reached which took into account both traffic and stock volumes. Federated Farmers can be satisfied with this outcome, but why did our appeal end up at the Environment Court? It did not need lawyers or in-depth debate on finer points of law. Instead, good old-fashioned discussion worked, talking with various

parties (rather than at them) to isolate the problem and come up with a practical solution. Some other commonsense solutions were achieved in mediation too. We appealed the council’s decision to restrict the range of animals able to be farmed within the hill and high country zone, maintaining that as long as farmed animals were adequately fenced there is no justification for discrimination on animal type. The council agreed and amended the wording to ‘commercial livestock’ rather than specifying types of animals. We were successful in achieving significant reductions in proposed set-backs for new milking sheds and we gained exclusion for fencing on land above 900 metres in a pastoral intensification rule.

ECONOMY

Interest rates — a constantly changing landscape Westpac chief economist Dominick Stephens looks at a key financial variable that affects farmers — interest rates. For a long while, the Westpac economics team has warned that interest rates cannot stay low forever. It has long-anticipated a construction boom and double-digit house price inflation. It reasoned that as these things normally generate inflation pressures, the Reserve Bank would be required to increase the Official Cash Rate to 5.5 per cent. Until recently, financial markets saw things differently. Market pricing delivered longer-term fixed interest rates that were only slightly above floating or short-term rates. In effect, markets did not ‘‘believe’’ that the OCR would go up by much. Westpac felt this created an opportunity for borrowers. By locking in reasonably low interest rates early, borrowers could avoid the worst of the proposed interest rate cycle. When asked, it recommended that borrowers fix their interest rates rather than float. How things have changed. Financial markets have done an about-face. Longerterm fixed rates have risen very sharply in recent months, first on wholesale markets and then for mortgages. Long-term fixed rates are now significantly higher than short-term rates. There were two key developments that prompted the markets’ change of heart.

CHOICES: Long-term fixed rates are now significantly higher than short-term rates, and no longer stand out as the better deal.

First, the United States Federal Reserve’s announcement that it may soon wind down the pace of Quantitative Easing (money printing) caused a major realignment of the world’s currencies, including

a drop in the New Zealand dollar. The lower New Zealand dollar has already pushed up prices for some imports, such as petrol. If it continues to do so, inflation will rise and the Reserve

Bank will have to hike the OCR early. Secondly, New Zealand’s economic data has been on a tear lately. Yes, the drought knocked the economy for six and that showed up as weak GDP in the June quarter. But there is a wide swathe of evidence showing the urban economy did well during and after the drought, while many parts of the rural economy have recovered remarkably quickly since then. For some districts, news of a high milk payment this season has buoyed confidence — our latest forecast is $8.30 per kilogram of milk solids. So what does all this mean for farmers? In a nutshell, long-term fixed interest rates no longer stand out as the better deal. There is very little difference between fixing and floating. If you opt for short terms, your interest rate will be low for a while but may shoot up in the future. If you opt for a long-term fixed rate, your payments will be somewhere in the middle throughout. It is not obvious which strategy will result in lower interest payments overall. At this stage, Westpac suggests the ‘‘fix or float’’ decision should depend on the risk tolerance and cash-flow needs of your business, rather than attempting to beat a market that seems pretty fairly priced.

Ph 0800 327 646 www.fedfarm.org.nz

October 2013 National Farming Review

WEATHER

A mild winter of two halves By Dan Corbett Metservice ambassador The winter of 2013 could very well be described as a winter of two halves. The first half saw numerous active troughs along with very cold air and snow. By comparison, the second half felt like spring at times in many places with some very mild air in place along with long fine/dry days and limited cold air and snow. The powerful storm of late June was perhaps the most intense of the winter, leaving a lasting memory for many of us. Strong to severe gales ripped their way up the country, along with heavy, persistent rain, while up to three metres of snow fell in the South Island high country. Many factors can influence the day-today make-up of the weather patterns over a season but, for most of the winter, the main seasonal influences ENSO, remained in the neutral position. The biggest thing of note, that brought the weather we experienced during winter, was the source region of the weather systems. The source region of a weather system can play a big part in how cold, warm, wet or even dry a particular weather system is. The first half of winter had a good mix of weather systems from different directions (northwest Tasman Sea, Southern Ocean and Pacific Ocean to the east). The second half of winter saw no cold southerly outbreaks, except for the final days of August. For the remainder of that period, northerly or westerly winds featured.

WARM, WET: This year’s winter was milder than usual and, along with above average rainfall, was the warmest since 1909.

These are not cold directions. The net result was a winter that was milder than normal, with above average rainfall. According to NIWA, it was the warmest winter on record since 1909 with the nationwide mean temperature 1.2°C above the winter average.

What is to come?

The continued neutral ENSO signal from

the Pacific Ocean will keep an element of variety in weather patterns over the next few weeks. Local factors will still play their part in the make-up of our daily weather patterns. The slightly warmer seas around New Zealand, along with a projected signal for lower pressure in the Tasman Sea, will keep Tasman lows a main feature during the next few weeks. These lows can mix moisture-laden winds from the

subtropics with cooling winds from the south, sometimes resulting in several days of strong winds and heavy rain. The point of origin in the Tasman Sea also plays a part in how much moisture these features bring. There may also be some higher surface pressure anomalies to the south of New Zealand over the next few weeks. As a result, the typical spring pattern of disturbed westerly winds covering the whole country may be slightly metered compared to a typical spring. We can still expect them to bring a procession of cold fronts, usually with more active fronts crossing New Zealand at five- to seven-day intervals, but other weather patterns may be interspersed periodically, especially as we get further into October. Visiting anticyclones that build in from the west or northwest can still be expected to bring mostly fine days, but cool and perhaps frosty nights. We are still vulnerable to cold southerly blasts, especially when lows deepen off to the southeast of New Zealand. These potentially offer some late season snow, but will be troublesome during lambing. It could be prolonged if any blocking takes place. Rainfall over coming weeks should remain just above normal across most of the northwest of the North Island and the north of the South Island. Elsewhere, rainfall will be close to normal or perhaps just below normal. Temperatures over the next few weeks will generally stay normal for most.

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National Farming Review

October 2013

www.fedfarm.org.nz Ph 0800 327 646

EMPLOYMENT

Performance reviews help all By Emma Coburn Performance reviews are a great way for employers to manage employee performance, make sure employees understand what is expected of them and help avoid future problems. They can also be used to manage poor performance where problems have already arisen. An employer is not legally obliged to hold performance reviews (unless it was agreed on in an employment agreement). Many employers conduct performance reviews once a year, to provide feedback and set goals for the next 12 months. Many employers also link these performance reviews with salary reviews, so that good performance is rewarded with an increase in pay. It is a good idea to have some form of performance feedback system and criteria in place that is understood by both the employer and the employee.

Managing poor performance If you are a party to a Federated Farmers employment agreement, there is a procedure set out to deal with performance below expectation. Please refer to clause 30 of the permanent employment agreement and/or clause 27 of the fixed term employment agreement, as applicable. When disciplining an employee for poor performance, employers must be able to point to legitimate (and measurable) performance concerns. Performance is about how the employee fulfills his or her job requirements. The level of performance is determined by an employee’s knowledge, skills, behaviours,

WORTH IT: Performance reviews may seem like a lot of paperwork, but the benefits of them make the work worthwhile.

qualifications, and abilities. Poor performance is different to misconduct; however there can be some overlap, for example, poor timekeeping or lateness. Poor performance is not usually ‘‘one-off’’ bad behaviour, but is more likely to be ongoing and often unintentional (although attitude can contribute to poor performance). Misconduct, however, is more like an instance where an employee does not perform because he/she intentionally does not perform, or does so negligently.

Employees’ rights and fair procedure When an employer has concerns about an employee’s performance, they should discuss these concerns with the employee, with the aim of improving both the performance in question and the employment relationship.

The employer should first organise a meeting to discuss performance concerns, then send a letter to the employee inviting them to a meeting to discuss performance concerns. This letter must set out in detail exactly what the performance concerns are. At the meeting, the employee has the right to: ■ Be told about the required standard (of performance, attitude and/or behaviour). Employers can point to job descriptions and past performance reviews to show what this required standard is ■ Be told when and how that standard is not being met (the employer should explain the problem, using examples of poor performance) ■ Be told what needs to occur for the standards to be met ■ Be heard (to explain or comment on the performance problem) ■ Have their explanation be considered (the employer should take time, have an

HEALTH & SAFETY

Helmets are an on-farm essential Farm bikes maybe the farmer’s Swiss army knife, but they are also the leading cause of injury and death on-farm. Under the Health and Safety in Employment Act, every farmer will be aware of the Government’s helmet push. Federated Farmers’ own Quad Bike Fact Sheet states, ‘‘Most importantly — Always wear a helmet’’. This is because they may save farmowners not only anguish and cost, but a life too.

A helmet is of no use unless worn and worn correctly, so some farmowners are increasingly treating helmet use as an employment matter. Helmets cost from as low as $120 and can easily be purchased from farm supplies merchants or bike shops. They can also be bought online at www.pacifichelmets.com/shop. There’s another reason why helmets make sense — ACC levies.

ACC’s proposed cuts to farming work account levies and the earner account reflect an improved safety record onfarm. To ensure this continues, make sure helmets are used. A good way of making this happen is to introduce a health and safety policy. ■ To help, call 0800 327 646 and ask about Federated Farmers’ Farm Health & Safety Policy and Workbook.

open mind and undertake any further investigations as necessary). After the meeting, the employer and employee must work together to improve the level of performance over a set period of time, including: ■ Meeting regularly to review performance ■ Get help to meet the standard (including training and coaching) ■ Give reasonable time and encouragement to improve. At the end of the performance improvement period, the employer needs to inform the employee whether the required standard has been met, and if not what the consequences may be. These could include extending the performance improvement period further, or disciplinary action. Performance management takes time, effort and commitment from both the employer and the employee. It is not a ‘‘quick fix’’.

Formal disciplinary action If performance problems persist, despite performance management, the employer can consider a formal warning procedure. If problems continue after issuing a first warning, the employer may issue a further warning or a final warning. If the employee’s performance does not improve following a final warning, the employer can consider dismissal. ■ If you have any specific questions about performance management, feel free to call 0800 FARMING to get free, independent legal and employment advice.

Ph 0800 327 646 www.fedfarm.org.nz

October 2013 National Farming Review

MEAT & FIBRE

INDUSTRY GROUPS

Farming and anti-fragility By David Burt ‘‘Anti-fragile’’ is a term coined by Nassim Nicholas Taleb for things that ‘‘benefit from shock and grow when exposed to volatility, randomness and disorder’’. Taleb is a well-known author who states that much of history is shaped by ‘‘Black Swan’’ events, which are a surprise and which cause significant disruption to our lives, for example, the 9/11 terrorist attacks on the World Trade Center, but which are sufficiently rare that their occurrence is not able to be accurately predicted. In practice though — and because they are explainable with the benefit of hindsight (and so fool our brains into thinking that we ‘‘almost’’ predicted them) — people believe they can predict similar types of events in future and so, invests much ingenuity and resource, unsuccessfully, into this area. In his new book, Anti-fragile: Things that Gain from Disorder, Taleb extends his thinking to the concept of anti-fragility — a new word for the opposite of ‘‘fragile’’. He distinguishes this property from both robustness and resilience — which are both attributes that are neither harmed nor helped by disorder while the antifragile benefits from such effects. He contends that the property of antifragility is behind everything that has changed with time, including evolution, technological innovation and economic success. In nature, over time, even the minutest vulnerabilities of systems are exploited, resulting in eventual breakage and failure. Taleb contends, therefore, that simply being robust is insufficient. He concludes that to prosper, a particular property — anti-

SURVIVAL OF THE ANTI-FRAGILE: The volatile market that the farming sector faces may actually ensure the industry’s future resilience.

fragility — is needed so that systems can not only survive, but flourish, when exposed to real world challenges such as volatility, stressors and unpredictable shocks. Today’s farming businesses continually face challenges they have no direct control over — from adverse weather, the vagaries of the marketplace and the exchange rate and from societal expectations around the state of the physical environment. Farmers are commonly thought of as being robust and resilient. It is also assumed that possession of attributes such as these is important in ensuring that the sector survives and prospers. In light of Taleb’s work, it is time

these assumptions were reassessed. If he is right, then such attributes will be inadequate to protect the sector in future. Are farmers, in proudly calling themselves robust and resilient, not only selling themselves short, but condemning the sector to future failure? In many instances, farmers’ behaviour and business practices are in fact anti-fragile. One example of this is the wellknown story of Doug Avery and his Marlborough farm. Faced with a series of droughts that were making his property increasingly unfarmable and uneconomic, he demonstrated antifragility in spades, fundamentally

Are farmers, in proudly calling themselves robust and resilient, not only selling themselves short, but condemning the sector to future failure? changing his farming practices to not only manage, but to take advantage of the stressor so that his business is today much stronger than before. The challenge to farmers, then, is to lift the bar — from celebrating robustness and resiliency to a perspective that embraces volatility and randomness. By doing so, and by developing business practices and systems that will enable their operations to prosper whatever the circumstances, they will indeed be anti-fragile.

Another great rural butchers’ conference The Rural Butchers’ industry group held their annual conference in Timaru in late August. It was a very successful event, with numbers up significantly on past conferences. The event included a number of speakers from the industry, contributions from members and a presentation from the Ministry for Primary Industries.

It also included visits to a number of premises and industry suppliers and, as is usual, a strong focus on the social side of things and catching up with fellow homekill/dual operator butcher members. The conference saw the election of Haydn Cleland (of Farm Fresh Meats in Timaru) who replaced Mike Hanson of Ashburton’s Netherby

Meats, the outgoing chairman from the past four years. The Federation’s Rural Butchers Executive group continue to work for members, with current and planned activities including participation in the MPI Unregulated Meats Working Group and the upcoming MPI technical working group, established to look at a draft specification aimed at

preventing listeria contamination in ready-to-eat products. ■ For more information on these or any other rural butcher related matters, contact the Chairperson, Haydn Cleland (on 027 441 6514) or the Rural Butchers Policy Advisor, David Burt, by email dburt@fedfarm.org.nz or telephone 0800 327 646.

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National Farming Review

October 2013

www.fedfarm.org.nz Ph 0800 327 646

INDUSTRY GROUPS

DAIRY

Lessons from the botulism scare By Ann Thompson Dairy policy advisor Every dairy farmer will remember August, 2013. They will recall it, no matter which dairy processor they supply. It’s the month when milk payout forecasts gave hope to debt-ridden, drought-stricken farmers and milk quality issues hit the industry. While money is just that — cash — finding unwanted things in milk is a greater issue as New Zealand’s reputation as a safe food provider is put on the line. Everyone is aware that the problems involved DCD, nitrates and the ‘botulinum’ that wasn’t. So, no need to expand on this. The focus, instead, is on what Federated Farmers hopes the industry has learnt, dealing with the issues: communication and co-ordination. Communication is key when any issue arises and co-ordination is required as the whole of the industry is likely to be affected. Another area where future difficulties lie is the increasing sensitivity of analysers which are used to test the composition of milk.

Dry run

For us, the DCD product recall in January was the dry run for Fonterra, a bit like the Louis Vuitton Cup was for Team New Zealand. It was the opportunity to learn how to give clear messages to media and to learn what customers wanted to know. It was also an ideal time to go over risk management plans regarding residues, plant hygiene and product recall. Unfortunately, lessons were not learnt in August. It was an opportunity lost, as Fonterra told media that there had been some microbiological contamination of a dairy commodity. They were unprepared for the questions and therefore what the press and customers across the world very quickly heard was: New Zealand dairy products kill babies. This conclusion brought the Government running, with the Prime Minister and Ministers’ Tim Groser, Nathan Guy, Nikki Kaye, Steven Joyce and the Ministry for Primary Industries (MPI) manning the pumps as borders closed on our dairy products. It even united Parliament for a short while. That’s how big this poorly given, misunderstood communication was.

DAIRY DIARY For most dairy farmers, mating is now on the agenda. ■ Check the TB status of all bulls coming onto the farm, before they arrive. TBfree will TB test for free. ■ Theileria and bulls: On arrival, quarantine service bulls and any new stock for at least seven days. Observe for signs of ticks and anaemia. ■ Treat for ticks as necessary. ■ Check the tick status of bull supplier’s and grazier’s farms.

Time off for all

CHANGE NEEDED: The New Zealand dairy industry must improve its communications after the recent Fonterra scare.

Getting the message out The Performance Juxtaposition site on the internet says that one of the barriers to communication is ourselves. ‘‘Focusing on ourselves, rather than the other person can lead to confusion and conflict . . . Some of the factors that cause this are defensiveness (we feel someone is attacking us), superiority (we feel we know more than the other), and ego (we feel we are the centre of the activity).’’ Fonterra needs to climb over this barrier and do better next time. We are done complaining about the communication advice given to Fonterra, as the company employed to do this must offer something special to Fonterra’s business — we’re just not sure what. Next time, we’re hoping Fonterra remembers that media and consumers may not hear the same message that is given. It’s this hearing of messages that is crucial. Having a knowledgeable, articulate medical professional in the line-up at press conferences would help, given most of the issues faced can be perceived to be potential food safety ones.

All in together

The whole of New Zealand’s dairy industry can be affected by dairy product recalls, and most were recently with product stalled at ports

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■ Sort out staff cover for the Christmas holidays. ■ Write clear instructions for those running the farm while you are away. ■ Re-do your budget to bring it in line with forecast weather conditions and payout forecast. ■ Settle and sign that contract. ■ Enter the NZDIA competition — or get your sharemilker and staff to. ■ Take time out — you have earned it!

awaiting the outcome of Fonterra’s investigation. Their off-shore customers lumped all New Zealand dairy products into the one holding pen, regardless of the firm. This has been very costly to these firms, for no fault of their own. Further funding is now required to enable dairy firms to sort out their customer relationships. The Government is part-funding this, though why the New Zealand taxpayer has to foot this bill, instead of Fonterra, is bewildering. Getting information on product risks out to the entire industry is vital and needs to be done early. The Federation thinks the latest problems showed that pan-industry differences can be put to the side as DCANZ, the lobby group for dairy processors, jumped on this bandwagon early.

Science running away There is no denying that certain levels of residues and certain types of bacteria are dangerous to human health, but it seems ridiculous that something that requires 5000 stars to line up creates a food safety panic worldwide. In the same week when the botulism saga occurred, there was a serious case of listeria contaminating raw milk with serious consequences in Melbourne. It did not even make the headlines. Technological advancements mean that minute amounts of any substance

can be detected in milk — but to what end? Should we be leading the world in testing all bags of product, to the nth degree? Should we be identifying all bacteria found? Getting this right is important for all dairy producers worldwide, as we generally abide by the same rules. The MPI, as regulators, are part of this worldwide rule-setting team and our experience this year will be of interest to all. Product integrity (real or perceived) is paramount. The position New Zealand has rightfully claimed concerning food safety over the last few years is very high up the ladder. Each party, from the farmer to the retailer, needs to develop proper protocols for adverse events, as each rung is part of this ladder. Fonterra is the biggest trader in world dairy product, so vigilance is needed as non-tariff barriers can be lucrative for foreign countries or operators.

Reviews

There are a number of reviews being carried out by MPI, Fonterra and the Government. The Federation looks forward to their outcomes.

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October 2013 National Farming Review

INSIDER

Parliament Bills in the House

As at September 20 a number of Bills relevant to farming were before Parliament, at various stages: ■ Regulatory Standards Bill, Commerce Select Committee ■ Animal Welfare Amendment Bill, Primary Production Select Committee ■ Food Bill, Primary Production Select Committee ■ Health and Safety (Pike River Implementation) Bill ■ Land Transport and Road User Charges Legislation Amendment Bill, Transport and Industrial Relations Select Committee ■ Game Animal Council Bill, Second Reading ■ Heritage New Zealand Pouhere Taonga Bill, Second Reading ■ Building Amendment Bill (No 4), Committee Stage.

Other reviews and consultations ■ Improving our Resource Management System, Ministry for the Environment ■ Freshwater Reform 2013 and Beyond, Ministry for the Environment ■ Better Local Government reforms, Department of Internal Affairs ■ ACC Levy Consultation 2014/15, ACC ■ Making our Dams Safer Consultation Document, Ministry of Business, Innovation and Employment ■ Inquiry into Regulatory Institutions and Practices, New Zealand Productivity Commission ■ Review of the Telecommunications Act 2001, Ministry of Business, Innovation and Employment ■ Service Sector Inquiry, New Zealand Productivity Commission ■ Review of the Telecommunications Service Obligation, Ministry of Business, Innovation and Employment.

News in brief

■ ACC is proposing substantial cuts to levies next year. But the Government has final say and given its decision earlier this year to ignore ACC recommendations to cut levies, Federated Farmers believes it’s time to end this political intervention.

■ The New Zealand Transport Agency is reviewing land transport funding, including local roads. While the process is still under way, the provisional framework indicates it is heading in the right direction. ■ Otago Regional Council Plan Change 6A Water Quality: After an extensive period of mediation, parties continue to work with each other and council to resolve outstanding concerns. Federated Farmers’ priority is ensuring the plan is workable and realistic for farmers. ■ Land-based aquaculture is currently being reviewed by Government, with the aim of improving the processes to establish and operate an aquaculture farm. The intention is to increase the number of farms so the industry can achieve its goal of $1 billion sales by 2025. ■ An eradication programme against the great white cabbage butterfly continues in the Nelson region. The foreign pest arrived in 2011 and is a serious threat to brassica crops. If established, it will affect up to 300,000 hectares of forage brassicas and cabbage crops.

Staff profiles

Craig Sole Field Officer Taranaki-Wanganui With a strong background in farming, sales, marketing and services to the farming sector, Craig is looking forward to discussing membership issues and the ‘‘advocacy’’ the Federation offers. Craig lives in New Plymouth with his wife, with whom he has two adult children. An active rugby referee, he also enjoys fishing, sports and gardening. ■ Contact Craig at csole@fedfarm.org.nz, 027 432 0218. Sarah Crofoot Meat & Fibre Policy Adviser Born in New York, Sarah moved to New Zealand in 1998 and farms with her family at the iconic Castlepoint Station on the Wairarapa coast. Sarah studied B Agri-Commerce at Massey University and graduated with First Class Honours. Her research was a comparative study of business models in the New Zealand and United States’ red meat industries. . ■ Contact Sarah at scrofoot@fedfarm.org.nz, 021 400 417. Viviane de Jesus Project Manager, Events & Sponsorship

Brazilian-born, Viviane de Jesus joined Federated Farmers in September. She has several years experience in promotions, marketing and events. Viviane moved here nine years ago and enjoys hiking, mountain-biking, cross country running and playing football. ■ Contact Viviane at vivianej@fedfarm.org.nz or phone 04 494 9183, 027 217 6744. Lynda Murchison North Canterbury Provincial President Lynda farms in partnership with her husband, Jock Murchison, on a dry land sheep and beef farm in the Weka Pass, North Canterbury. They have been in the area since 2005 and hail from Lake Coleridge, where the Murchison family has farmed since 1878. She also worked in resource management in Canterbury for 18 years, for both district councils, the regional council and Nga¯i Tahu. She runs her own consultancy and lectures part-time at the University of Canterbury in resource and environmental management. Lynda has also taken up the Roper Scholarship to study for a PhD looking at environmental ethics in New Zealand farming. ■ Contact Lynda at lakecoleridge@amuri.net, 03 314 6153. Tanith Robb Senior Policy Advisor Tanith joins us from the Ministry for Primary Industries and will work at the Southland office as a senior policy advisor. A born and bred Southlander, Tanith grew up on a sheep farm in Forest Hill and worked on her family’s farm until she moved to Wellington for university. At MPI she was a senior analyst responsible for leading the review of the Animal Welfare Act 1999. ■ Contact Tanith at trobb@fedfarm.org.nz, 0800 327 646. John Donnachie Communications AdvisorPublications John is a communications advisor and editor of the National Farming Review. Formerly a freelance journalist, he has written for major daily and provincial papers in the South Island, as well as online for Yahoo and MSN with AAP. A Scotsman by birth, he brings a wide range of skills and background covering politics, military, migration, agriculture, human interest and sporting issues. ■ Contact John at jdonnachie@fedfarm.org.nz, 04 470 2162.

THE OFFAL PIT $1 each way

You have to love our media. Up 8:1 in the America’s Cup and on ‘matchpoint,’ it was the plucky Kiwis thumping the billions of Oracle founder Larry Ellison. Operating off nothing more off a slice of Vogels, a thin wipe of Marmite and a cup of hot Milo, it was 100% Pure Kiwi ingenuity and pluck. As things started to look up the media scrum swelled, but then Team America got its act together. Sure as day follows night, our media started to use the word ‘choke’. Like the ABs, we love to build people up just to knock them down. Since the roles did indeed reverse that last minute roll-on by Oracle turned our Cup challenge into one of those glorious defeats we seem to do so well at. Since things live forever on the internet, it has been fun clocking critical commentators of the $36 million public subsidy turn into red sock wearing enthusiasts. Ian Taylor of Animation Research took a well aimed shot at the Greens who decried the public investment in Team New Zealand. He was confounded that smart technology-led exports would be condemned by a party, which calls for smart technology-led exports. Then again that would be expecting consistency. As farmers, the one thing we marvel at is probably the large number of Kiwi media that went to San Francisco. Strangely, given we hear so much about water here in New Zealand, not one New Zealand media correspondent was able to join Feds Bruce Wills at World Water Week in Europe. I say strange because don’t the networks have ‘foreign correspondents’? Here was Bruce Wills on the world stage, at a conference attended by more than 2700 delegates, and no Kiwi media in sight. At least there was one upside for Feds and Kiwi farmers — the United Nations stumped up for Bruce’s trip. ■ The Offal Pit is a contributed piece. It does not reflect the views or policies of Federated Farmers.

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New Everyday Low Price

XRS EID Stick Reader

XRP2 EID Panel Reader

MP600 Load Bars

NEW

AVAILABLE OCTOBER

0959TTSM01

$595

$1,095

$1,895

*Offers and pricing valid from 16 September – 31 December 2013 except for the XR3000 and ID3000 which now becomes the everyday pricing. Pricing is GST inclusive, subject to change and includes delivery to the retail store.

www.tru-test.com/livestock

$2,295 $

$1,095 How are you tracking? Let’s talk. 0800 263 278

Red is a phone for $0 and no limits to yarning on it. Samsung GALAXY S4 Active

• Unlimited talk and TXTs to

standard NZ & Oz numbers

• 2GB data On Vodafone Red – $129 a month on a 12 month term

Get a brand new Samsung GALAXY S4 Active for $0 when you sign up to Vodafone Red on a 12 month term. You’ll also get unlimited talk and TXTs to NZ and Oz – plus loads of data.

Vodafone Power to you

*Unlimited talk and TXT is for standard person-to-person calls and TXTs to standard NZ and Australian numbers. Vodafone On Account terms and conditions apply. Early termination fees apply. See www.vodafone.co.nz/red for details

VOD1007/NFR/RRB

Get Red now. Call 0800 777 042. vodafone.co.nz