Fonterra, subsidised rail and why Timaru's backers are angry

Farmer anger in South Canterbury is growing towards subsidised KiwiRail costing jobs at the largely ratepayer owned Port Timaru.  This comes after Fonterra Cooperative Group announced it will use rail to centralise all South Island freight on the Port of Lyttelton.

“I am not going to bash Maersk or Hamburg Sud,” says Ivon Hurst, Federated Farmers South Canterbury provincial president.

“The shipping lines are simply reacting to what a major client wants to do.  It comes right back to why Fonterra is ditching Timaru.

“Could it be KiwiRail handing Fonterra everything it wants on a publicly subsidised silver platter?

“Here is a taxpayer-owned loss making subsidised rail company, costing jobs at a largely ratepayer owned, unsubsidised and profitable port.  Subsidies create perverse outcomes, which for us, is the loss of up to 50 valuable jobs and value.

“Since 2008, when Labour did the unbelievable and made ‘us’ buy back KiwiRail for $665 million, billions of taxpayer dollars have been poured into KiwiRail or written off.

“Former U.S President Ronald Reagan best sums up how we feel, “Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it”.

“As for Fonterra, they are literally putting all of their South Island milk powder into the one container.

“I seriously question the wisdom of having all of Fonterra’s South Island exports reliant on good labour and client relationships with KiwiRail and the Lyttelton Port.

“It seems hellishly vulnerable if a major labour dispute broke out let alone another Act of God.  Not even Fonterra can snap its fingers and magically rearrange complex global shipping timetables.  Instead of keeping options open Fonterra is on track to cut them off.

“As Timaru port Chief Executive Officer Jeremy Boys said in the NBR, you generally want to bring the ships to the cargo not vice-versa.  We just hope common sense breaks out and soon,” Mr Hurst concluded.