Fonterra shrugged off the effects of COVID-19 in many markets to record a $67 million rise in normalised earnings before income tax (EBIT).
OPINION: New Zealand's Government has spent about $50-odd billion to-date to counteract the ravages of the COVID virus.
It is an enormous debt. Somehow, someday, we must repay it. But how?
Unfortunately, our tourism industry is also a casualty of the virus. This leaves agriculture as the only industry large enough to muscle-down this debt over time.
It is assumed, but not made explicit, that this is the reason behind the Government’s recent “Fit for a better world” policy to boost primary industry exports by $44 billion over the next decade. Interestingly, this sounds like an echo of the National Party’s 2013 aspirational goal set for the pastoral sector, to increase productivity by 50% by 2025.
So once again, in desperation, the nation turns to agriculture to earn its place in the world. Historically there is nothing new in the fact that farming is the metaphorical backbone of New Zealand.
But things are different this time round. Farmers are being asked to rescue the country’s economy and at the same time clean up the environment.
This Government, despite the financial burden it is now placing on the farmers’ shoulders, appears to be hell-bent on simultaneously pursuing its environmental goals – the Emissions Trading Scheme (ETS), the Zero Carbon Bill (ZCB) and the Freshwater Reforms. These are all high cost policies: examples include, the ZCB, estimated to cost $85 billion per year if fully implemented. DairyNZ estimate that the proposed Freshwater Policy will cost the dairy sector $6 billion annually. Plan Change One, proposed to clean up the Waikato River, will by some estimates, cripple the regional economy.
The billions of dollars which the Government has poured into the COVID crisis have been justified on the grounds that ‘we live in exceptional times.’ Fair enough. But surely these ‘exceptional times’ should be extended to the agricultural sector.
How about cutting agriculture a little bit of slack? How about setting aside our environmental goals for a time while we come to grips with the national debt? I would have thought that there was great urgency to deal with the debt and that there would be little harm in leaving the environment to look after itself for a while.
This would set farmers free to fully concentrate on what they do best and what the nation most desperately needs – export dollars.
This will of course not sit well with those of the green persuasion. But should we care? Even in unexceptional times they would gladly see agriculture wound down to a peasant industry.
The sporting analogies are obvious. We are a team of 5 million most of who are powerless to do anything about our national economy except keeping the internal economy turning over. We are now dependant on the members of the team who can make a difference – the 60,000 farmers – to pay back the national debt.
The nation needs them to be focussed on the game and not diverted by what are, at the moment, secondary issues.
By continuing to pursue our environmental goals in these ‘exceptional times’ is like handicapping the horse out of the race.
Everyone loses, including those making up the team numbers. I’m sure that they will not miss out on their favourite swimming hole and will always have clean water to drink as we sort out a national debt.
In these exceptional times, to yoke the farming-horse to a swingle-tree, hitched to the competing goals of productivity and the environment, is unfair and illogical!
• Dr Doug Edmeades has more than 40 years’ experience as a soil scientist and now runs his own science consulting business agKnowledge. Over the years, he has published 90 scientific papers, several books, booklets and pamphlets and countless popular articles.