Meat industry reform on Peters' radar

New Zealand First leader and Northland MP Winston Peters. Photo / File

Sending the greatest percentage of Northland sheep and beef south for slaughter reduces the region's potential meat-processing jobs, New Zealand First leader and Northland MP Winston Peters says.

Calling for Government support for meat-industry restructuring, he said the cattle slaughter tallies from Affco's Moerewa plant and Silver Fern Farms at Dargaville fell substantially short of the 10 per cent of national beef production figures attributed to Northland.

The region's livestock farming and processing sector contributes $249 million to regional gross domestic product (GDP) and employs 2733 fulltime equivalent staff.

Mr Peters said if farmers were getting better prices for their stock south of the Auckland Harbour Bridge then factors such as road maintenance costs needed to be drawn into the equation to keep jobs in the North.

"If the Government can find $333 million for "urban cycleways" it can definitely provide support in legislation for meat industry restructuring. The NZ Super Fund could become a cornerstone investor in our No2 merchandise export."

Mr Peters also highlighted the risk of offshore ownership of New Zealand's added value meat processing by pointing out that Brazil's JBS, which had entered Australia in 2007, was now that country's largest fresh-meats processor.

He had a similar warning for Northland's 801 farmers and 291 sharemilkers with 9 per cent of New Zealand's dairy herd.

New Zealand First believed in strong New Zealand-owned companies and co-ops, but the Dairy Industry Restructuring Act had been a boon for foreign companies, with Synlait, Gardians, Oceania and Goodman Fielder developing dairy-processing plants here along with new Chinese entrants like He Run in Waikato or Yashili at Pokeno, Mr Peters said.

"This is death by 1000 cuts, or 1000 competitors, who can get here what they can't back in China. This risks the 'meat industrialisation' of Fonterra where enticing milk payouts and the high cost of 'sharing up' to Fonterra (1 share=1 kg/MS), makes it easier to sell your shares and run. Except without a strong co-op, farmers are at the mercy of whatever they get paid for their milk."

Turning to dairy farmer debt, Mr Peters said a Reserve Bank report showed about 1200 dairy farmers around the country were at risk owing nearly $10 billion, which he considered a "highly conservative" estimate.

New Zealand First's Farm Debt Mediation Bill could significantly change how receivership worked by requiring mediation before receivership, he said.

The Budget had opened the door for funding of a dairy research centre mooted for Northland, but New Zealand First was keen to broaden the focus of any research centre to include all pastoral farming, horticulture and aquaculture.

"The horticulture value chain is of moderate scale in the region, contributing $147 million in GDP and employing close to 1890 people in 2013," Mr Peters said. "Aquaculture is a relatively small-scale industry in Northland. It contributed $18.5 million to regional GDP and employed 383 people in 2013, but has huge potential save for Resource Management Act issues."

Mr Peters supported a strategic water management study of Northland to identify areas where water supply and potential water infrastructure could deliver economic growth and other benefits.

The study, involving the Northland Regional Council, economic development agency Northland Inc and the Ministry for Primary Industries' Irrigation Acceleration Fund, is scheduled by September.

Irrigation for pasture-based and horticultural activities was the main water use in Northland, accounting for 31 per cent and 19 per cent of total volumes of the water allocated, although the total irrigated area of land was minuscule at 7800 ha, Mr Peters said. "This study has massive potential to transform dairy, beef and horticulture."