Comment: It is impossible for farmers to "have it all" when they're doing the economic heavy lifting while operating within increased restrictions and uncertainty, writes Dr Jacqueline Rowarth.
Despite what the magazines say, having 'it all' is pretty difficult.
In farming it is impossible.
We were told at university thatthere are three routes to land ownership – patrimony, matrimony or parsimony.
The first one is a matter of luck (though some people have described it as a form of child abuse). The middle requires significant planning and compromise (probably) in finding the right partner. The last - parsimony – involves hard work and saving, as well as planning and compromise; luck can't be ruled out, either.
Even knowing that having "it all" is unlikely, the combination of news for farmers and growers last week was difficult to assimilate.
Good news from the Ministry for Primary Industries (MPI) was in the Economic Intelligence Unit economic update for the primary sector.
The report was a careful discussion of the Covid19 impact and future possibilities. It indicated that the value of primary sector exports is up by $1.7 billion, despite the crash for forestry and seafood.
Listen to Jamie Mackay interview Dr Jacqueline Rowarth on The Country below:
During Alert Level 4, export revenue from the five primary sectors included in the MPI analysis remained 4 per cent up on the same period last year, due to strong dairy and fruit exports and a weaker NZD.
Since coming out of Level 4, overall export revenue remains 1 per cent up across the five sectors due to the same reasons. This, said MPI, will give New Zealand a head start on the rest of the world as we get our economy moving again.
At the same time, in the same newspapers, articles discussed the implications of the Ministry for the Environment (MfE) announcements on the Emission Trading Scheme (ETS), carbon prices increasing and Essential Fresh Water (EFW).
These initiatives are putting limits around production. Although there are synergies between the two because "water rules might reduce greenhouse gases (GHG)", overall it is clear that some current production activities will have to change. The term 'ease into different land use options' has been used.
Forestry is being encouraged by the rising carbon price and the Billion Trees initiative. Concerns have already been raised about rural depopulation, loss of productive land, foreign ownership and lack of intention to harvest and Minister Damien O'Connor has now suggested that the government will intervene if more than 40,000ha a year of high quality farmland is converted to forestry.
The debate on how much land has already been lost and what 'high quality' means will continue, but the increased carbon price means that the attractiveness of conversion has increased.
With land going into forestry, the need for increased value in exports to contribute to vital economic recovery will fall to other components of the sector – such as cropping and horticulture.
Neither involves production of methane (a GHG) and for reasons of food security both are exempt from the cap on use of synthetic nitrogen.
However, if export revenue is the goal, the food security exemption is questionable.
The argument could then be that New Zealand growers are more efficient in terms of production than growers in other countries, but the same efficiency applies to animal production.
The arguments and decisions are confusing.
As farmers and growers try to identify what they need to do to stay in business, MPI has stated clearly that the outlook for next year is uncertain.
The Ministry's research indicates that overall spending will be down globally, but grocery shopping and domestic cooking will be up.
Dr Jacqueline Rowarth. Photo / Supplied
The economic update suggested that for products perceived as healthy, such as fresh fruits and mānuka honey, markets will increase.
Missing from the report was the increased popularity for "Omega 3s" in food – reaching the top two of the 'trendy' list in the UK and in the USA. Omega 3s are higher in grass-fed than grain-fed meat and milk, which augers well for New Zealand's animal products in discerning markets.
Further good news is that the Government is working on a roadmap for accelerating the economic potential of the primary sector. National's 2012 Business Growth Agenda had the primary sector at its core.
Many investments were made to improve productivity and resilience, for instance in irrigation schemes.
These schemes will be important for horticulture and cropping, just as they have been for dairy and drystock farms. And though the current government has been arguing against irrigation, recent schemes announced for Northland and the Gisborne area indicate a growing awareness that few things grow without water. They don't grow without nitrogen, either.
The Government's roadmap will bring together "opportunities and actions spanning the primary sectors, which will operate in concert to achieve significant gains within a decade".
To give reassurance to farmers and growers, the roadmap needs to be charted with MfE and its map for GHG and water.
Working in silos, however focused and well-intentioned, is simply leading to confusion. It is very difficult to do economic heavy lifting while operating within increased restrictions and uncertainty.
The result could be the wrong plans and compromises on the land.
The risk is in ending up with nothing.
- Dr Jacqueline Rowarth CNZM CRSNZ HFNZIAHS has an agricultural science degree with honours in environmental agriculture and PhD in Soil Science. She is a farmer-elected Director on the Boards of DairyNZ and Ravensdown. The analysis and conclusions above are her own. jsrowarth@gmail.com
