Dairy 21 on quest to milk millions for research

A farmer drives cattle to his farm from the Waikaretu. Picture / Amos Chapple

Industry lobby group Dairy 21 is continuing to push for a major boost to state funding of pastoral farming research, saying the Budget failed to signal a strong enough commitment.

The group's chairman, Graham Fraser, a former Dairy Board chairman, said greater government investment was needed to help ensure key export opportunities were not missed.

Dairy 21 and Meat & Wool NZ have formed the Pastoral 21 alliance because the Government wanted to deal with one body over research.

Pastoral 21 wants state funding for sector research to return to the level of the early 1990s, meaning an injection of about $60 million a year in new money would be needed, said Fraser.

In the Budget, an extra $4 million a year was committed over four years - a figure referred to positively by Research Minister Steve Maharey at last week's Fieldays. The money would help increase farm productivity and ensure pastoral farming's environmental sustainability, he said.

But Fraser was disappointed the "strong" business case for an extra $60 million a year was not recognised.

He accepted it would take time to build research capability to a level that could handle such an injection and that this amount of extra funding would have to be phased in.

But he was frustrated only the extra $4 million a year was signalled.

'We haven't made a lot of noise publicly about it but it's fair to say that we're disappointed," he said.

"We'll continue to seek to convince the Government that this is a worthy investment that [it] can make because the business case we put to them supported our original request."

Fraser said it was clear from talking to Fonterra that global demand for dairy products was expanding.

Also, the EU was looking at reducing export subsidies to zero by 2013 should a World Trade Organisation negotiating round be concluded successfully, which would make EU dairy produce less competitive and open up key opportunities for New Zealand.

Fonterra was seeking to lift milk production by 3 per cent a year to position itself to take advantage of such global opportunities.

One major research task would be to find ways to improve feed for cows so that more milk could be produced. The goal was to lift the "metabolisable energy" of feed by 50 per cent. "Now it's going to cost a lot of money because this is a hard question to solve." But Fraser said they had to lift the productivity of current acreage under dairying "by a significant factor".

A second target was lifting animal production from 60kg of milk solids per tonne of feed consumed to 80kg. A third was getting adoption rates of current technologies lifted so at least half of dairy farms were achieving 90 per cent of known theoretical capacity.

On why dairying could not simply fund the extra research needed by itself, Fraser noted farmers were already paying considerable research levies and simply wanted the state to fund research at its previous level.

There were clear national benefits in doing so, as boosting dairy production had potential to add billions of dollars a year to export income.

Fraser was not sure why funding had been cut but believed the Ministry of Agriculture had been less active in helping direct research efforts, and the agricultural sector had not stepped in to take up the resulting "slack".

He said the sector needed to demonstrate "focus" and a realistic expectation of capturing opportunities through greater state assistance.

"I'd like to think that by demonstrating that ability that we can use this small [$4 million a year] start as a first stepping stone to getting back to levels that are more realistic if we really want to achieve our goals."

Agriculture Minister Jim Anderton described the extra $4 million a year as a good start, adding: "I am hopeful that, in partnership with industry, we can build our research capacity and invest even more in coming years to lift research efforts."

Maharey said: "Now that we have made an increase, we are working with the sector to identify priorities." The Government already provided around $111 million a year for research relevant to the pastoral sector.