Buried somewhat this past week by the National Party's announcements on ag policy there has also been another GDT auction. Happily (thankfully, perhaps is a better term) after 4 negative results this latest auction turned it around with a +3.2% lift in the weighted average. Unfortunately, WMP dragged things back a bit with an only +1% rise, but a rise never the less.
The lifts in butter and cheese perhaps reflect the growing buoyancy in hospitality and food service (China?). However, the lift in SMP but not WMP is more difficult to explain.
Increasing the potential for good news regarding New Zealand’s food exports is the news that China’s GDP has lifted beyond almost everyone’s expectations. While many economists were forecasting a GDP rise for the whole of 2023 of 5% to 6% the March quarter alone has come in at 4.5%. This is on the back of a 2.2% rise for the whole of 2022. Predictions for the rest of 2023 seem slow in coming forward but given the kickstart for the first quarter the odds are well on to better expectations.
Chinese consumer inflation is also at the lowest rate since September 2021.
And staying with the China focus, it appears the punitive Chinese tariffs on Australian barley may soon be resolved if current talks are successful. Coal was taken off the list a short while back. In addition to barley, other Australian products caught up in the China-Australia trade dispute include wine, lobsters, beef and cotton, which were slapped with varying degrees of restrictions. Given that grain prices in Europe appear to be falling with Ukraine grains impacting upon EU domestic prices, we may be starting to see some sort of return to normality in trade, Russia and its invasion of Ukraine aside of course.
2023 election policy
As most in farming will now be aware the National Party has released its agricultural policy as lead up to the October 14 election. Nineteen different areas are covered. Some such as number one seem meaningless to the point of being potentially dangerous while others are dragging in some needed common sense that has been absent in the past.
Much of what will be different to current policies will no doubt (or should) come out in later detail.
The area around the banning of overseas ownership of forestry investments for non-harvesting pine plantations is already in place. What is lacking in both the current government’s policy and National’s proposal, is just how this will be policed, given that harvesting could be legitimately pushed out 35 years or more. Most farmers and land owners will at least have some sympathy with the topics raised and National have flagged that more are to come concerning agriculture, notably: Emissions pricing, agriculture R&D incentives, water (including nutrient caps and water storage), and a comprehensive primary industries policy.
Below is the list of 19 topics (as per their release) set out by National.
Deliver smarter rules for the future
1. Introduce a 2-for-1 rule for the next three years: for every new regulation that central or local government wants to introduce on the rural sector, they must take away two.
2. Require local and central government to assess the costs of all new rules on the rural sector and publish the findings.
3. Establish a permanent Rural Regulation Review Panel to consider every local and central government regulation affecting farmers and advise central government on solutions.
4. Introduce a no duplication rule – the Government cannot ask farmers for the same information twice. It is up to officials to share supplied information where appropriate within the system.
5. Make appointments to reference and advisory groups based on skills and experience, not politics.
6. Commit to real consultation – officials must consult on a genuine, open and transparent basis and respect differing views.
Supercharge the rural economy
7. Double the Recognised Seasonal Employer (RSE) worker cap over five years to 38,000 per year and explore other countries entering the RSE scheme.
8. Change Accredited Employer Work Visas for agriculture to create a path to residency and eliminate the median wage requirement to allow wages in line with local workers.
9. Ban foreign direct investment for the purpose of converting farms to forestry to collect carbon credits.
10. Focus the definition of Significant Natural Areas on areas that are actually significant and make the rules workable and clear for landowners and councils.
11. Change the National Policy Statement for Highly Productive Land to allow a broader range of productive rural activities such as on-farm storage ponds and sheds and off-farm dairy factories and vegetable processing.
12. Scrap the ute tax.
Get Wellington out of farming
13. Change rules for culverts and how wetlands are defined in legislation to only cover actual wetlands, rather than areas with limited environmental value.
14. Make stock exclusion rules more practical to protect critical source areas while avoiding unintended consequences like unnecessarily large exclusion zones for small water bodies.
15. Amend the proposed National Environmental Standard for drinking water to avoid excessive compliance requirements for small providers of 30 connections or fewer and return autonomy to small rural communities.
16. Defer central government rules requiring resource consents for winter grazing until freshwater farm plans are in place, with plans to become risk and outcomes-based.
17. Replace the winter grazing low slope map and low slope rules for stock exclusion with more effective catchment-level rules to accommodate regional differences.
18. Restart the live exports of cattle with gold standard rules set in regulation to protect animal welfare and safety. National will require purpose-built ships and introduce a certification regime for the importers of destination countries to ensure animals live in conditions at the same standards required in New Zealand.
19. Repeal Labour’s rebranded Three Waters and replace it with Local Water Done Well – National’s plan to restore council ownership and control of water assets while ensuring water services are financially sustainable.
Without the detail many topics are difficult to comment on but with the election now 6 months away details from all parties regarding future policies should soon be rolled out.
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