Recapturing farming’s challenging times


The 1984 snap election not only saw the end of Rob Muldoon’s prime ministership but also farming support and subsidies


THERE’S A hackneyed saying that if you lived through the 1960s, you won’t remember them. (Attributed to the tendency for people in that era to use mind-altering substances.)

However, for anyone who farmed – or was associated with farming – in New Zealand during the 1980s it’s a time no one will ever forget. For those in the rural sector the election of the fourth Labour Government and the unleashing of its economic agenda would have a major impact, much of it still felt almost 30 years later.

These challenging times of major change are nicely encapsulated in former Otago Daily Times farming editor Neal Wallace’s new book about how Rogernomics changed the face of NZ’s rural sector.  Published by Otago University Press, When the Farm Gates Opened is a fascinating look back at the amazing changes thrust upon the country’s rural sector and farmers when the 1984 Labour Government took power and set about reforming the economy.

The economic reforms launched by the 1984 David Lange-led Labour government changed New Zealand forever. Agriculture bore the brunt of those changes and became an historic reference point for the primary sector: a defining and pivotal moment when financial subsidies abruptly ended and farming learned to live without government influence, interference or protection.
The changes were more sweeping and wide-ranging than anything farmers and farming had expected. Some adjusted, some did not.

Thirty years on, this gripping and moving social history relates the story of a rural sector battered and bruised by rapid change. It traces the period building up to the economic changes by talking to political and sector leaders, and the most important contributions are interviews with those most affected.

All the main players during this time – many of whom have now died – are included: Rob Muldoon, David Lange, Roger Douglas, David Caygill, Jim Sutton, Peter Elworthy, Collis Blake and Jim Bolger, to name a few.

This is a must-read for all who lived through these times, and even more so for those who did not. It’s an amazing reminder of how much the farming sector has changed in the past 30 years and should be a mainstay on bookcases nationwide.

When the Farm Gates Opened: the impact of Rogernomics on rural New Zealand, at major book retailers. RRP $30.

Now for the good news!

DairyshedIN CASE you missed it, Fonterra last week released some fantastic figures in its payout announcement.

An opening forecast farmgate price of $7.00/kgMS for the 2014-15 season – a historically high figure that matches the opening forecast 12 months ago at the start of the 2013-14 season.

The forecast 2013-14 payout of $8.40/kgMS, with a forecast dividend of 10c/share, means a record total of $8.50 for a fully shared-up farmer.

And a strong milk supply is forecast for the new season – 1616 million kgMS, up 2% on the current season forecast of 1584 million kgMS.

These figures are a massive boost for dairy farmers, rural communities and the wider economy but if you got your news from the daily print and broadcast media you could be forgiven for missing them.

Our Australian friends at Fairfax led the rush to bad news on their ‘farming’ web page with the headline ‘Fonterra signals $2.2b dairy payout cut.’ Never mind that the $2.2 billion dollars never actually existed or that it is only the difference between a record payout this year and a pre-season, and therefore theoretical, forecast.

Fairfax wasn’t alone, of course. All its metro-based brethren took the low road. The TV One News website lit up with “Fonterra has cut its forecast 2014 milk payout… and expects the payout for the 2015 season to tumble to $7/kgMS.”

At its media conference Fonterra provided ample context so the assembled hacks might see the silver lining, not just the cloud. For example, chairman John Wilson said the new season forecast was historically high, but reflected current market conditions. “Our farmers understand the realities of dairy commodity price cycles, and will exercise caution at this early stage in the season,” he said.

He could have pointed out that the opening forecast of $7.00 is up $1.20 on the 2012-13 season that ended at $5.80/kg, or $6.12/kg including the 32c/share dividend.

Bank economists also did their best to add context to the reportage, although these comments were largely buried as metro media strained to accentuate the negative.

ANZ’s statement was balanced, and consistent with the other banks: “On the face of it the decline in the payout between years is a drag on the economy over the coming year, but that dynamic is exaggerated.” The coming year’s payout will still be the fourth-highest on record, and from a spending point of view farmers will be in a similar cashflow situation.” ANZ also said average farm profitability is still expected to be nearly $3500/ha – nearly three times the seven-year average of $1150/ha.

Plenty of potential for a positive headline then, but Fairfax et al think the only good news is bad news.