26 FARMERS WEEKLY – farmersweekly.co.nz – February 22, 2021
EDITORIAL Red meat sector deserves recognition
OR decades the meat industry has been disparagingly labelled a dinosaur. This derogatory moniker was, in many cases, justified as companies focused on competing and fighting with each other, but thankfully, that is no longer the case. This change in focus has been graphically evident in the last year in response to the global covid-19 pandemic; a quite remarkable response to a once in a lifetime economic and social disruption that has not been acknowledged. As the world went into lockdown last year to contain the virus, foodservice markets shut overnight. Forced to address the loss of a significant chunk of their sales, companies had to immediately find or extend distribution channels and markets then reformat product for global retailers. Consider the enormity of that task alone, without the added challenges of maintaining livestock processing and reconfiguring plants to accommodate social distancing for staff. Several plants had staff test positive for the virus, but to the credit of workers and management, it was contained despite the potential to spread rapidly. Having dealt with one set of challenges, this season companies have contended with supply chain disruption at ports caused by measures introduced by countries to keep the virus out. By all reports, most meat is finding its way to market – quite an incredible feat. As we have previously reported, all this is being achieved while companies have maintained meat prices above historic levels for most of the season, no doubt helped by extra demand from lockdown, forcing consumers to cook at home. The fact all of this has been done in the past year despite a mountain of disruption, would not have been achieved by a dinosaur industry. It shows companies are focused on their business, consumers and taking market share off competing protein producers and not the company down the road. History will look favourably at the performance on the whole of New Zealand’s primary sector to the 2020 covid-19 pandemic, but the meat sector deserves special attention.
Someone has to pay for the damage TREVOR Walton’s opening comments about forestry’s contribution to rural communities is not far off the mark. Our home is in Waimiha, where in the 1990s eight farms were planted and most of that is now coming to harvest, with seven gangs now operating. Twenty-five to 30 trucks leave the valley per day. Some staff stay locally in rentals for the three or four years, others come and go in utes daily, but it is left up to the long-term locals to keep the community cohesion going. So, it is fair to say the effects of forestry are not popular. However, to suggest the decision around rate differentials are fuelled by prejudice is wrong in my view. Differentials should be
used to create equity. Examples are not hard to find here in the Ruapehu District Council, where the capital value of a 500-hectare sheep and beef farm is the same as for a 5000ha forest. Capital Value is land value plus the value of improvements. Forestry has low land value and the only improvements are a half share in a boundary fence, internal roads and skid sites, thus a low Capital Value. The crop is not valued for rates; this is an instance where a differential should be used. Roading rates per hectare can be 10 times less for a forest than a sheep and beef farm. Thus, to lift a forest to equal terms per hectare is actually going to require a 10 times differential.
But that is not all. Perhaps we could use tonnage as a comparison, given that each property pays approximately the same roading rate. Take 5000ha over a 30-year rotation, harvesting 400 tonnes per hectare. That amounts to two million tonnes of produce. For comparison’s sake, that equates to 2222 30-tonne loads outgoing per annum. The 500ha sheep and beef farm would put out about 40 loads annually. Incoming loads are difficult to assess, but maybe 10 times over all for the 5000ha forestry block, mainly road metal. Ignoring the incoming loads, the harvested product for the forestry block is 55 times the farm. Quite a lot. So if roading rates were based on tonnage, the forestry block
could be liable for a 55 times differential. It is unlikely to happen as it would drive the forestry industry broke and councils don’t like doing that. However, someone has to pay. Should it be the general ratepayer or farmers? I don’t think so. I don’t agree that these decisions to impose forestry differentials are driven by prejudice at all. They are driven by timid attempts at creating equity. Walton’s parting comment that “rates should never be used to penalise others” could be turned around to say “rates should never be used to subsidise others”. Jim Walker Waimiha
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Meat markets evolve