Opinion
30 THE NZ FARMERS WEEKLY – farmersweekly.co.nz – November 20, 2017
PGP outcomes still not clear Alternative View
Alan Emerson
I CAN remember Labour’s Minister of Agriculture Jim Anderton announcing his Fast Forward Initiative back in 2008. It was a $700 million fund. The money was transferred to the Ministry of Agriculture and Fisheries (MAF) bank account with the aim of future-proofing New Zealand’s primary industries. Anderton’s aim was to grow the fund to $2 billion. I thought it was a bold, innovative scheme and wrote accordingly. The government changed later that year and the $700m was whisked out of the MAF bank account. Inevitably it went to motorways in Auckland. That was replaced by then Minister David Carter’s project, the Primary Growth Partnership (PGP). I’m confused as to what the PGP has achieved, despite considerable publicity about it. Going to the annual report you can read, among the glitz, that there will be $727m invested over time by both government
and outside organisations. The estimated contribution to our GDP will be $6.4 billion by 2025 and there are 50-plus companies involved. That’s all well and good but I remain unconvinced. I’m not the only one. Farmer activist John McCarthy has real issues with the programme. “I can see little benefit in PGP,” McCarthy said. “It’s just jobs for the boys. Can someone tell me what benefit the taxpayer has received from their $350m investment? “Can someone tell me any benefits farmers have had from the $350m we’ve donated? It hasn’t affected my bottom line at all,” he said. The reports of the two completed programmes, a reduction in the use of ethyl bromide and Stump to Pump, using forestry residue as fuel, are underwhelming. I don’t get the impression the Red Meat Profit Partnership is going anywhere fast despite the $66m price tag, half coming from farmers, Meat Board reserves and the industry. Those I’ve talked to believe it will be an absolute boon for the advisory industry as it intendeds to subsidise farmers seeking advice from consultants. In the words of one cynic “It will be the people who borrow your watch to tell you the time who will benefit most”.
I have also received considerable feedback over the NZ Sheep Industry Transformation Project (NZSTX), specifically concerning NZ Merino, (NZM). From the farmers I’ve spoken to there is a definite disconnect between the company and growers. It isn’t just growers either as in March last year the National Council of NZ Wool Interests (NCNZWI) wrote to then Primary Industries Minister Nathan Guy with major concerns. They included claims that the first round of $16.9m funding produced little of value, adding the claim that allocating government funding to a company that duplicated existing programmes was an inefficient use of public money and misled MPI and the public about the value being added by PGP initiatives. The previous government allocated a further $11m of PGP funding to NZM. NCNZWI questioned that additional amount because it had received the distinct impression MPI would not invest in the wool industry at that time. It also questioned NZM chief executive John Brackenridge’s role as an original member of the PGP Investment Advisory Panel. Its major issue was that representing 85% of the wool clip it wasn’t consulted on any of the PGP grants.
GLENGARRY POLL DORSET
UNHAPPY: Former Primary Industries Minister Nathan Guy received a letter from wool interests questioning the value of the Primary Growth Partnership.
NZM attitude arrogant. New Agriculture Minister Damien O’Connor has said the coalition was reviewing all PGP partnerships. I commend him for that. I also understand he will fully investigate the NZM PGP saga, an investigation I would fully support.
Your View Alan Emerson is a semi-retired Wairarapa farmer and businessman: dath-emerson@wizbiz.net.nz
LETTERS
51ST ANNUAL SALE
Continued from page 28
Monday, December 4th, 2017 – 1pm Feilding Saleyards, Manchester Street, Feilding
they have exhausted their credit. So? There are plenty of ratepayers (who are also taxpayers) who are in the unenviable state of having to, well, just tighten their belts and get real about giving the nice-tohaves the deep six and live more frugally. My advice to Federated Farmers president Katie Milne is to be more forthright rather than just commenting politely that “she had not considered a commission”. Instead, if taxes or new bureaucracies are mooted she should hang up or run screaming from the room.
130 Rams up for Auction Why you should buy a Glengarry ram: • 41 years performance recording • Major emphasis on growth, survival and muscling • All sires DNA tested for footrot and muscling genes • No. 1 ranked Terminal Sire 2004, 2005, 2009, 2010 & 2017 (SIL ACE list) • 550 stud ewes means only the best rams are sold • Four Rams in Top 10 2017 SIL Terminal Growth • Finalist in two categories at 2017 Sheep Industry awards.
Ross Dawson Papakura
Is it true?
LK0090365©
For ram and semen enquiries contact Ross & Ben Pratt today: Ross 06 323 3827 • RD 5, Feilding Ben 027 2356 577 • RD 2, Kimbolton • benpratt@xtra.co.nz
Callum Stewart 0272 802 688 Maurice Stewart 0272 469 255 Caitlin Rokela 0274 056 156
Many farmers were also unhappy with the NZM-PGP deal because along with the PGP funding of $28m, growers had to contribute a similar amount. What is surprising to me is that the PGP funding to NZM is allocated as income on its accounts. Does that mean it contributes to profit? Despite denials it looks that way to me. Brackenridge recently cashed in half his shares in NZM for $5.23 a share which has caused some controversy among growers with questions about PGP income affecting the share price. I’ve heard comment from both sides but it would beggar belief to suggest that PGP money would depress the price. The last NZM shares were traded at $1. Questions also remain about the seemingly privileged position of NZM when it comes to PGP funding and the value of some of the projects. I approached NZM with two questions: what returns did the PGP funding give Merino growers and what returns did the taxpayer receive. I received an email from the communications and stakeholder management manager Richard Brewer directing me to the MPI website. That was followed by a call from MPI offering me assistance. If I’d wanted to talk to MPI I would have called it. I found the
I READ with a sense of disbelief what I will refer to as Loughlin’s lament over the potential fallout from Brexit to our longstanding quota privileges with Britain and the European Union. One didn’t have to be a rocket scientist to predict a rocky road from the time Britain and the EU parted company. That is why I wrote to the board of Beef + Lamb New Zealand questioning their wisdom around their decision to withdraw staff from those theatres. This was, on the face of it, a call at odds with logic.
If ever there was a time when we should have been snuggling up to our farmer counterparts this was it. It defies logic and timing that B+LNZ could do this when, by any measure, they should have been doubling their on-theground presence to protect the quota arrangements that are the cornerstone of our entire sheep meat industry. This apparent lack of foresight also calls into question the concept of an industry board, the justification, as often reiterated by chairman James Parsons, is that they provide wisdom and oversight in areas relating to marketplace activities. Maybe they were away the day this call was made? At the very least I believe that farmers are entitled to a detailed explanation as to where these moneys have been spent and to an analysis of the benefits accrued. In my view the most valuable responsibility that B+LNZ has to justify a compulsory collection of levies is the safeguarding and maintenance of these quota arrangements. Would it be too much to ask that we could expect resignations in the event that our valuable quota privileges go south? I won’t hold my breath. John McCarthy Ohakune