Over the past three weeks, the rural community of Rotorua has seen a lot happen and new projects announced.
Following an extensive consultation and submission process by Federated Farmers, the Rotorua Lakes Council has announced its intention to restructure the district rating allocation. Although the council has listened, and therehas effectively been a reduction in the proposed rates for the rural area and in particular for dairy farmers, it will still be a significant rate increase and will impact on individual farmer cashflows. It will also impact on the farmer spend in the rural services area.
What has become clear to me and many others is that there needs to be some serious dialogue between the rural communities and the council away from the pressure and process of long-term planning. It is completely unreasonable for any section of the community, whether urban or rural, to be pressured with rate increases like the rural area has been, simply because the council has financial deficits. One of the attributes of good governance is that there shouldn't be surprises sprung on people.
Last week, I was at the national Federated Farmers' annual conference in Wellington. At an early start on Thursday morning, delegates were stunned at the result of the latest Global Dairy Trade Auction. Trading overall down 5.9 per cent, with skim milk powder down 10.8 per cent to $2054.00 per tonne. We certainly weren't expecting that and in fact, with the new season about to get under way, there was an expectation that we would be seeing improving demand. This is a reality of the world we now live and farm in, completely dominated by the international market.
The events of the past 12 months, where we have gone from a record payout of $8.30 to $4.40, illustrate just how volatile the market we produce for is.
What is clear to me and many in the dairy scene is that this downturn will probably mean a couple of seasons of very difficult trading conditions for farmers.
-Alan Wills is Federated Farmers Rotorua provincial president.
