Every New Zealander is a farmer

Keynote speech by Don Nicolson, Federated Farmers President, at the Federation’s National Conference

Everyone in New Zealand, ladies and gentlemen, is a farmer.

That’s a radical thought, isn’t it?

Everyone in New Zealand is actually…a farmer.

It’s just a question of whether you have your hands in the soil, like us, or if you depend on those who have their hands in the soil.

From the cabby who got you here, to the hotel staff helping run this event to the media covering our conference, they all depend on what we do.

That makes them farmers….of us.

Yet we in turn, depend on them for our healthcare, our education and our information.

That means even our most vocal critics are farmers too.

Everyone in this country has a direct stake in our success.

Everyone in this country depends upon us to bring dollars into this economy.

Earlier this year, I wrote in the Sunday Star Times that New Zealand’s business community is not following agriculture’s lead.

While their productivity tanks, ours has soared.

It seems strange then that economic diversification seems to mean anything, but, agriculture.

Having watched a talented young Labour MP, Stuart Nash, in Parliament, I was struck by what he said.

After acknowledging agriculture is really important, we then got that dreaded ‘but’. The 'but' being we need to diversify to reduce New Zealand’s dependence on agriculture.

I think Mr Nash will have a big future and I look forward to showing him that diversification means building off what we do best as a country and not ignoring it.

I therefore have a challenge for the business people of New Zealand and to our politicians of all colours.

We all agree that knowledge is the way of the future.

If that is so, why on earth are we wasting dollars trying to develop industries in which we can never be competitive?

We’ve tried to be the Switzerland of the South Pacific, we’ve even tried to develop a video game industry and even the icon, Fisher & Paykel, after off shoring a lot of its production, has had to bring in the Chinese giant, Haier.

Icons and the odd success, like Weta and Rakon, seem to drive economic policy.

Yet, while fantastic successes, which they are, they do not make an economic strategy that will lift New Zealand up the OECD.

Our biggest manufacturing exporter is the Tiwai Point smelter that takes 13 percent of the national grid, to generate 3 percent of all exports.

Put another way, that is 61 percent less than what farming did in 2008.

Step forward to 2009 and our contribution will soar but where is the recognition, acclaim or indeed, policy support?

All we’ve had is that you do a great job…but.

That ‘but’ stops here with a challenge and a big one at that.

To be a success, New Zealand needs to build off what we truly know a lot about and that thing is agriculture.

With apologies to a certain tourism advert -

· So where the bloody hell is our version of the Dutch cooperative, Rabobank
· So where the bloody hell is our version of Novartis
· So where the bloody hell is our version of Monsanto.

For those who think we couldn’t foot it, we’ve done that for some 130 years shipping food more efficiently than anyone else.

And with every disadvantage of distance.

In 2009, in this, the Asian Century, that disadvantage has now flipped to our advantage.

I say enough.

Our corporate and political community needs to ‘get with’ the agricultural programme. Build and partner with us.

We farmers and your Federation wishes to provide a new economic dawn.

We wish to lead on a national food strategy culminating in a Ministry of Food Production where business, regulators, researchers, producers and we farmers, can coalesce to become a lot more than we are today.

Farmers are not the economy’s engine room for no reason and farmers are not the nation’s leading exporters, for no reason either.

Agriculture is the means to grow the economy. To truly grow the economy, if business takes our lead and works with what we do.

Kiwi ingenuity means we can build that better mousetrap, or in our case, build that better milking machine.

This demands a fundamental rethink on agricultural Research and Development (R&D).

New Zealand has Rolls-Royce expectations of science research funded on a Lada budget.

What is the future of Crown Research Institutions and our University sector, which are now busy commercialising research?

Federated Farmers wants to see a lot more poured into R&D but the research and higher education sector needs to be tidied up, and shall I say it, put together.

The defunct Lincoln-AgResearch merger showed one path. Its ball should be picked up and run through these sectors. We need a full debate about the research sector.

There’s also an argument that the industry good bodies need to look at their R&D spending and their wider role.

I also make no apologies for recent challenges to the meat industry. Meat has made an art form out of mediocrity. The only ones laughing are our Australian competitors.

If you are in any doubt, read Meat & Livestock Australia’s market reports. It will make you cringe.

While I don’t wish to step on my Meat & Fibre Chair’s toes, or to pre-empt Federated Farmers own consultation, Meat & Wool NZ has not been vocal enough about the inadequacies of the meat industry. New Zealand is not positioned to take advantage of the 60 percent of humanity who live in our part of the world.

Farmers are looking for a road map forward, not more of the same, but on an increased budget.

I think the Duke of Wellington put it best when he said of the French at Waterloo, “they came on in the same old way and we stopped them in the same old way.”

Meat & Wool NZ and Federated Farmers are natural partners but we will not shrink from criticism of its performance as we will not shrink from self criticism where we need to do better as a Federation.

Agriculture is undoubtedly New Zealand’s economic sunrise.

We must get out there with messianic zeal and talk up our great profession.

We’ve got ourselves into a bunker, mentality assailed from all sides.

We tend to see ourselves almost as settlers from the ‘old west’ under attack from native-Americans.

Yes we are tall poppies in a country that loathes tall poppies.

But to change that ‘self-knocking’ culture we need to up our game as advocates and far better explain what we do.

Farm Day is part of explaining to the 86 percent of New Zealanders who live in our towns and cities, the realities of farming.

Our audiences are the consumers in New Zealand and around the world, who fundamentally trust what we do and what we produce.

Explaining is as much a challenge for Federated Farmers as it is for the industry good bodies, the Ministry of Agriculture and the Government.

We all need to be in the same waka.

Farmers are, after all, the 15th most trusted occupation in New Zealand.

The fact we have fallen from number 11 in 2007 comes from being a tall poppy in respect of dairy and being a proxy for the supermarkets in respect of beef and lamb prices.

We see the tall poppy rearing its head in the speculation about the level of farm indebtedness.

Yes farmers owe $45 billion. It is a lot of money.

But that represents 15 percent of the $300 billion owed by New Zealanders.

15 percent of the $300 billion owed by New Zealanders.

This 15 percent of debt needs to be put in the context of the 64 percent of exports, or the 18 to 20 percent of GDP, our sector has a hand in generating.

Yes that level of debt has doubled over the last ten years and yes, it has increased by 30 percent in the last two years.

Yet business debt has leapt by 17 percent and residential debt by 12 percent over the same period.

Federated Farmers has been front in centre in getting banks to act on farmers interest rates.

Before we started our campaign back in January, farmers weren’t even mentioned in media releases.

Now we are.

My message to the banks is that the world needs food and farming remains arguably the lowest risk of any business type.

I find it inconceivable then, that farmers are still paying a considerable margin over the $170 billion owed by residential homeowners.

Every percent off a farmer’s mortgage equates to $450 million dollars back into our pockets and ultimately, our communities.

That flow on benefits the New Zealand community and ultimately, bank profits. Please work with us.

Colleagues, if you are in any doubt about bangs for your Federated Farmers bucks, our work with the banks is proof positive.

Yet the sad truth is that some farmers will exit our industry, as I wrote in the Wall Street Journal last month.

That is part of the business cycle. It is not a calamity as some predict. It is not New Zealand’s version of subprime. Farms are real and what they produce is real and importantly, in demand.

Sub-prime was financial alchemy that did turn lead into gold, except it was fools’ gold.

For the farmers out there under stress, there is nothing to fear but fear itself. I ask you to talk to your advisers and above all, your friends and your family.

I recall the 1980s when it seemed the sky was falling in.

In the 1980s that led to the rash comment that our industry was dying.

Mark Twain would probably reply that, ‘the rumours of agriculture’s death have been greatly exaggerated.’

We will as always, get through this period of adjustment.

Some farmers will exit, as they did in the 1980s, only to come back wiser and stronger.

To those who are hurting please talk about it with the people you trust and the expertise that exists in our communities. Farmers are high achievers and when things don’t go to plan we revert to a stoicism that is fundamentally unhealthy.

While things may seem bleak right now, remember any sunset is always followed by a sunrise.

The critical thing is to talk honestly and openly. We are your mates and mates look after mates in good times and in bad.

The fact we will get through should be promoted loud and clear to our trading partners.

New Zealand’s farmers aren’t holding out the begging bowl looking for taxpayer subsidies to protect them from the market.

We are, after all, business people. Something the farmers of the United States and Europe need to be reminded of. To do this means promoting our response in contrast to theirs.

I am full of praise for the work of the Hon. Tim Groser and his predecessors, the Hon. Phil Goff and the Hon. Jim Sutton.

We need to up the rhetoric to get change, real change.

Change there will be as neither the US or Europe can afford the mounting costs of saving inefficient farmers from the market.

It’s an open door that we must push through. That requires a body to take on the US and EU farm lobbies head-to-head.

Diplomacy will succeed but the noise from the US and EU farm lobby reduces its effect.

Federated Farmers stands ready, as we showed in the Wall Street Journal, to tackle those lobbies head-on.

I can report that the feedback from the US has been positive.

There are real farmers and Wall Street farmers and the real farmers recognise subsidies to be the poison it is.

The prize we are angling for is breathtaking.

Agricultural subsidies distort world trade to the tune of half a trillion dollars each year. That’s a phenomenal sum I find hard to comprehend. It’s an economic game breaker.

Cracking that will open up the OECD ladder. It has been elusive but inch by inch we are getting closer, as the Cairns Group meeting in Bali showed.

We must also have our political leaders tell and retell our subsidies story to New Zealanders. A story that many have forgotten.

It needs to be told in our schools and in communities. It needs to be in our text books and it needs to be in song.

New Zealand’s fame overseas is not from being anti-nuclear, it is from being anti-subsidy.

We had a big hand in American 20/20 last October on this very issue. The shame, the real shame, is that it has never been shown here.

The fringe lobbyists are now claiming farmers receive a subsidy… from the environment.

Well I have a definition of sustainability.

That’s the ability to do something indefinitely. Farming over thousands of years is the living embodiment of sustainability.

Not too many human activities can make such a claim.

The fringe lobbyists argue farmers need to pay for the share of the environment we supposedly affect.

I have another radical response.

Of course we affect the environment.

You don’t account for $25 billion in exports - 64 percent of everything New Zealand sells - to pay our way in the world, without having some effect.

The fringe lobbyists confused logic misses two important points.

· Is the affect proportionate? and,

· Why do we farmers farm in the first place?

Do farmers account for 64 percent of all environmental effects?

No, we don’t. Not even close.

Even under the farcical calculations of the ridiculous Emissions Trading Scheme (ETS), agriculture accounts for less than half of New Zealand’s emissions.

In world terms, that’s 0.1 percent of global emissions, 0.1 percent!

Work we’ve done shows we can feed some 1 percent of the world. That’s an efficiency ratio of 10:1.

New Zealand is often held up as the world’s social laboratory but we farmers and the national economy are not lab rats.

It was said if we didn’t jump on the global warming bandwagon we’d become an international pariah – a trade leper.

Denmark has kept its farm animals out of its response. Canada has just, well, given up even trying.

After a lot of PR buzz, Australia is deferring the current global climate crisis until after 2013. The United States too, has made a lot of noise and that’s about it.

Federated Farmers bottom line is this.

Primary food production sustains life.

The basics of sustaining life have no role in any ETS.

Period.

That does not mean a free ride for agriculture. Farmers will pay through fuel, electricity, building materials, fertiliser and the many other farm inputs we consume.

What we are seeking is an end to the biological calculation nonsense.

It’s really baffling how New Zealand’s biggest carbon sink is omitted.

That sink is the 200 nautical mile exclusive economic zone surrounding our country.

We have the fourth largest such zone on earth. It’s a massive carbon sink but counts for absolutely nothing.

Rather than ‘clean and green’ how about being ‘pastoral and pure?’

After all, our tourism sector is quick to capitalise upon the pastoral imagery of New Zealand.

The fringe lobbyists are quick to castigate farming but omit the many effects humans have upon the environment.

Since 1994, the national dairy herd has increased by 34 percent to 5.6 million animals.

Yet, in stock unit terms, the number of farm animals is down 7 percent.

Since 1994, the human population of New Zealand has increased by 6 percent, or the equivalent of almost two Hamilton’s.

Each of the quarter of million humans will consume a lot more of the environment than cattle.

Each human has to be clothed, fed, educated and housed.

As they grow older, they will go on trips overseas in aircraft manufactured from aluminum and composites, not to mention, fuel.

When they fall sick they will need medicines in a hospital constructed of materials from the environment, not to mention the factories that manufacture those medicines.

If they purchase a Toyota Prius, they will consume materials mined, refined, manufactured and transported from around the world.

And how about DVD players, laptop computers and IPods?

Not too many farm animals need these.

The real inconvenient truth is that human beings are not exactly environmentally neutral. We cannot be. Being environmentally neutral is subsistence living.

The sooner we look in the mirror the better.

Farmers are not a mechanism for liberals to knock in order for them to feel better about themselves, or morally superior.

That really begs the question of why do we farm then?

Could it be to sustain the 4.3 million human beings who call Aotearoa home?

Here’s a scary statistic – 12,000 dairy farmers account for 25 percent of everything New Zealand exports.

That gives me a chance to touch on the proposed National Animal Identification and Tracing (NAIT) scheme.

We have wrongly been cast as the villain but let’s not kid ourselves that this is a biosecurity response. Not with some ruminants in and others, supposedly, out.

Remember, Meat & Wool NZ has pledged to its sheep farmers that sheep are out of NAIT.

The Chair of NAIT takes the contrarian view.

There has been a lack of honesty and a whole lot of spin on the NAIT concept.

Only your Federation has asked the right questions as we try to prevent farmers going into NAIT eyes wide shut.

Let us not kid ourselves that this is about consumer expectation either – it’s more about supply chain assurance for food manufacturers.

Hand on heart, this is an international movement and Governments of either hue seem committed to it.

Very well then.

That makes it, fundamentally, a political decision.

If NAIT cannot be about biosecurity without sheep according to Meat & Wool, do we need NAIT right now?

Do we need NAIT when farm owners are living on overdraft to pay wages, rates and the host of other compliance costs?

Can we please take a leaf from Australia’s response to the global climate crisis and put this off until we need it. Really, really need it.

In this we look to the Minister of Agriculture to be mindful that timing is in his gift.

This is a cost some say New Zealand cannot afford not to make.

It’s a cost some farmers simply cannot afford right now.

In other words, plan and prepare a scheme but hold its implementation until markets require it of us.

According to the Ministry of Foreign Affairs and Trade that day is yet to come.

Can we also suggest to the Minister that if we are to make the jump, then Ultra High Frequency opens up many more opportunities for farmers.

NAIT seems to have arrived at the Low Frequency solution before properly defining the actual problem.

The way NAIT has approached RFID is an echo of the way local government today operates. Decide on a solution and work out the problem later.

Federated Farmers contends the feudal way local government is funded is now untenable.

We are encouraged to have a Minister who is as stunned as we are about the way the tentacles of local government have spread into areas it ought not to be in.

Now is a time for rational debate on of Local Government its long term funding in which all wage earning citizens contribute to the services they consume.

Federated Farmers is prepared to lead that debate.

Leadership also means we are working on pandemic planning for our industries.

If H1N1 mutates into a lethal strain, as what happened with the 1919 pandemic, our industry will need thousands of people ready and able to support farmers.

Federated Farmers now has the means in our new ruraljobs.co.nz website.

We live in an age where the climate of fear is rife. Federated Farmers is determined not to add to it.

Yet by being prepared, there is no reason to fear the future. A few days ago, the first Tamiflu resistant strain of H1N1 was detected.

An unsolicited paper is underway that will go MAF and the Minister of Agriculture shortly.

New Zealand’s most important industry and the food supply chain needs to continue to function in the event of any crisis.

History also tells us that when food production collapses, so does civilization itself.

I do wish to end by touching on what I see as a fault in the national psyche.

Our impression of New Zealand is driven less by self-belief and more by what those overseas think of us.

Or rather, what we think they think of us.

This is reinforced by an education system that has pupils knowing a lot about New Zealand, but increasingly, less about the world we sell into.

We are increasingly ignorant of our future and the skills needed to meet that future.

Look at the uptake of Asian languages in schools; look at the enrollment in sciences and agricultural sciences. Look at the tabloid television, which tells us everything we didn’t wish to know about our society.

Ignorance of the world is something we as a nation cannot afford.

It amplifies the negative effects we supposedly have and diminishes the positive role we play in the world.

Farmers have a strong sense of place and lead the world in the trade of many of the commodities we produce.

That is why we need to be much more positive, upbeat and constructive as an organisation and as farmers.

It also means we will speak out, as we did on the Citizens Initiated Referenda Act, about the wastage of public money.

Irrespective of where you stand on the issue, this Act, in 16 years, has not shifted public policy even a millimetre.

Signs are this latest one will be as effective as the previous three. If that is the case, we will ask for the Act to be either amended or abolished.

The current act is sham democracy. It’s an $8.9 million exercise in Clayton’s Democracy.

Democracy does happen – it’s called a general election.

Look at what that $8.9 million would generate for New Zealand Inc.

If put into water storage, this would increase by 150 percent, the sum currently being spent in an area, which is so critical to the future of our industry and the economic well being of all New Zealanders.

There is another, much bigger issue that the Referenda Act throws up. That being the overall way our public law is formed and ultimately, drafted.

Even Sir Geoffrey Palmer, a noted jurist in his own right and a former Prime Minister, has expressed his concern at the proliferation of poorly drafted Acts.

Parliament should be known more for the legislation it doesn’t pass, than the cavalcade that takes the eye of Parliament off setting a positive direction for our country.

Simply put, Members of Parliament cannot see the Order Paper for the Hansard.

That is why farms are increasingly becoming publicly controlled utilities.

It’s easy to pay lip service to the word freedom, but that vital word is being eroded by an ever bigger government at all levels of our lives.

I firmly believe this will be a core role for your Federation.

In other words, I am tired of your Federation being known more for what we are opposed to rather than what we stand for.

We will lead on the policies that will enable you, our members to be more productive and effective while retaining much more of your hard earned income.

We will lead on the policies that will ensure every one of New Zealand’s 4.3 million farmers have a secure future.

Colleagues, your Federation is rebuilding for a much brighter future where we are at the ‘apicentre’, as our beekeepers would say, of New Zealand agriculture and agribusiness environment.