Best prices but compliance costs threaten farmers' golden run

Whanganui Federated Farmers president Mike Cranstone says there is widespread angst over the uncertainty surrounding solutions to environmental issues facing all New Zealanders.

Farmers are struggling to enjoy the fruits of the best prices ever as much of the extra money trickling through the farm gate may yet be siphoned off to fill the hungry belly of compliance.

While there is widespread acceptance that sheep and beef farmers in particular are experiencing the best prices in history on every level except wool, farmers are hardly cracking a smile with the threat of environmental compliance costs staring them in the face.

Whanganui Federated Farmers provincial president and sheep and beef farmer Mike Cranstone said there was widespread stress and angst with many farmers feeling uncertain about the future.

"There are a myriad of challenges facing farmers and central government is targeting us on many fronts, yet giving us no tools to achieve the desired solutions," Cranstone said.

"Farmers are outcome focused and renowned for their No8 wire mentality for solving problems. There is little acknowledgment of what we have already done to deal with the environmental issues facing us all. As far as environmental issues go all New Zealanders need to be involved, not just farmers - it is in everybody's best interests, not just one sector of the community."

There are blanket regulations proposed to solve some problems like nitrogen levels, yet that is clearly best dealt with on regional levels. Every bit of land and waterway around the country is different and each have unique challenges that require unique solutions.

Federated Farmers believes regulations around nitrate levels need to be set at regional level.

"We have been given a couple of years to come up with a plan to achieve zero carbon emissions, yet we have not been given any tools. On freshwater, farmers have not been involved in writing the rules and cannot target, or tailor, solutions unique to our own catchments. There is widespread uncertainty and where there is uncertainty there is a reluctance to invest," Cranstone said.

Water quality is just one of the issues on the table and the finger of blame has been firmly wagged in the face of the agricultural sector.

The Government has announced its latest water quality proposals called Action for Healthy Waterways. Compiled within a package entitled "Essential Freshwater Package", it comprises a new National Policy Statement for Freshwater (NPS) and new National Environment Standard for Freshwater (NES) and also new Stock Exclusion regulations.

The package proposes some major changes, above and beyond those at current regional council levels on the management of freshwater, with two main objectives:
+ to stop further degradation of waterways and start making immediate improvements so that water quality improves within the next five years.
+ to reverse past damage and bring waterways and ecosystems to a healthy state within a generation.

Proposed fencing of waterway regulations.

Part of the proposals centre around the fencing of wetlands and waterways with set measurements imposed.

Proposed fencing of waterway regulations.

However, many farmers have already fenced off areas of their farms to protect waterways, although some may not meet the proposed measurements.

Will they be forced to re-fence to meet the new regulations?

David Cotton, one of two Whanganui representatives on Horizons Regional Council and also a sheep and beef farmer, stock agent and rural property real estate agent, agrees with Cranstone.

"Many of the farmers, bankers and fellow agents I talk to these days say there is widespread concern out there," Cotton said.

With his Horizons Regional councillor's hat on Whanganui farmer David Cotton suggests some regulations surrounding environmental issues should be dealt with at local levels rather than blanket, one-size fits all rules.

"Sheep and beef farmers in particular, are experiencing the best prices in history, yet there is a huge amount of stress and angst out there and it's all to do with compliance and uncertainty. Farmers are feeling under attack. It is not just water issues, it is a range of issues, including the blanket planting of trees in some regions and the fear of what that will do to small rural communities.

"While Horizons doesn't have a specific policy around regulations being proposed for nitrogen levels for instance, or solutions to cleaner waterways, there is a feeling around the table some of these issues are best dealt with at regional or local level rather than a blanket rule for all."

Cotton, owner of River City Livestock, said he had done some research on livestock prices in recent years.

"I picked the first week of January and the first week of August to show the main part of the selling season along with winter trade," he said.

"I'm not saying this was the highest or lowest price paid in any one year, but gives a good overall comparison.

"Mutton is 140 per cent better today than the lowest price in my comparison [January 2013 lowest lamb and prime beef price], lamb is 86 per cent better today and prime ox is 50 per cent better today.

"With today's lamb fetching $8.80/kg or more, mutton $6.10/kg or more and prime ox $6.20/kg, we have a hat-trick in pricing. The price for lamb has been brilliant for two full seasons and looks very positive for this season. We have had a hat-trick in pricing for three years now and when you take in lower interest rates then we have what is known as a double hat-trick, a feat so rare it has only happened once in international cricket [Lasith Malinga 2007]," Cotton said.

Ruapehu-Wanganui Rural Family Support Trust chairman Brian Doughty conceded his group was dealing with farmers affected by the uncertainty of environmental issues.

"It was be fair to say you would expect to be seeing a lot of smiling faces given the record stock prices, but we are not," Doughty said.

"We are still working with rural people with stress levels tied to environmental issues facing us. It is about the uncertainty of it all."

Even Rabobank's latest Rural Confidence Survey found that farmers across all sectors were increasingly pessimistic about prospects for the agricultural economy in the year ahead.

Farmer confidence was at its lowest level since the March 2016 quarter, with concern over government policy identified as the key factor, says Rabobank New Zealand chief executive Todd Charteris.