Bruce Wills gets excited about the positives for our agriculture despite recent efforts to talk ourselves down. He also likes the 'Scale up or Die' message. Your view?

Bruce Wills gets excited about the positives for our agriculture despite recent efforts to talk ourselves down. He also likes the 'Scale up or Die' message. Your view?

By Bruce Wills

A few weeks ago I wrote about a major American newspaper penning a piece on New Zealand. This week it broke in the International Herald Tribune, supposedly blowing the lid on New Zealand's ‘clean green 100% Pure' brand.

Sometimes, it can feel as if you are a lone voice, pointing out that when you look at what we do and how we do it, we are way up there in terms of environmental performance.

That New Zealanders don't do moderation is evident in the comments extracted by the journalist.

I won’t go as far as the email Mark Unsworth sent to Russel Norman about Massey’s Mike Joy. The one that ended up on Facebook quickly followed by the NZ Herald, but what Unsworth penned will have many in the Horizons Region nodding in agreement.

It seems we delight in telling anyone who will listen just how bad we are.

The larger the stage the wilder the claims as 3News can testify to. Do we genuinely delight in misery as a people?

I tend to believe that for all of our faults and we do have them, we do more good in this world than bad.

Reflecting on how much coverage an American journalist in Hong Kong got writing about New Zealand, I was struck by the paucity of coverage when agriculture does well.

Take Dr Jeremy Hill becoming the first New Zealander to head the International Dairy Federation in 109 years.

Or, as I was reminded of in an email from a contact at the Department of Conservation, what about the limited coverage of Tim Aitken and Lucy Robertshawe becoming Marks & Spencer's number one farm supplier on earth?

Perhaps one solution is more people.

Radical, I know and likely to give Bernard Hickey heart palpitations, but “Scale Up or Die” released by the NZIER, argues that successful exporting nations are not only closer to their markets, but have large home markets as well.

It is the domestic market that helps create the scale needed for export success.

One hundred and twelve years ago New Zealand cracked one-million people versus the 4.4 million we have today - the most recent 1.2 million of us coming in just the past 32 years.

The NZIER argues we need 15 million Kiwis by 2060 because, "If New Zealand's biggest impediment to better economic performance is an absence of scale, there is only one way to overcome this over the long term and that is to grow the population through more migrants."

It is certainly a plan bolder and more convincing than taxing our way to greatness.

New Zealand exports are more likely to grow if successive governments target a population of 15 million by 2060 because more people bring more capital and more ideas.

They also bring more problems over land use.

That seems solvable by way of a hierarchy of land-use; reusing previously developed land first, increasing densities and leaving greenfield as the last resort.

The advantage of this is that it makes better public transport economically feasible. If we add more people without adding sprawl, I can confidently say that in terms of value and in terms of productivity, New Zealand farming is the star turn.

Globally, New Zealand agriculture is Hollywood and Wellywood all rolled into one.

We are the Wall Street of global farming because New Zealand's core competitive advantage is food production.

It is why New Zealand’s brand for what we export and even for visitors ought to be about getting a little "NZ Inside".

Between 2012 and 2050, ANZ expects New Zealand to capture an additional $500 billion to $1.3 trillion in agricultural exports. This is an immense opportunity so striking the right balance is important. With good management and good science we can continue to improve how we interact with the environment and grow the economy. We can grow more jobs with an ever lighter footprint.

The solution is not complicated. It is trusting Kiwis to make their own spending decisions so Government just needs to spend less.

It is about focusing on outcomes rather than process.

It is about trusting the collective wisdom of a community to decide water limits for themselves and not some distant judge.

We produce safe, quality food in a world that is crying out for more.

We have great water nestled among some of the best scenery on earth. We are an educated and innovative people with an exciting future. We are the ‘lucky' country but could be luckier, with a few more Kiwis..

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Bruce Wills is the President of Federated Farmers. You can contact him here »

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Wonderful. So farmers can continue to reap the benefits of their activities (anyone for capital gains tax on agricultural land sales to foreigners? No, thought not) while still externalising the costs (ruining our rivers, which we then all have to pay to clean up). What a marvellous system. If a paint factory set up in the middle of Palmerston North and pumped waste lead into the river would we a) not expect action to stop it and b) make them pay for the clean up. Yet extraordinarily farmers are allowed to do the exact same thing.
Frankly I find it frightening that someone so clueless about the reality of global growth is in charge of Fed Farmers. Perhaps Fed Farmers are the real enemy?

You're dead right Andy, but there is no way that the Fed. Farmers political party i.e. National, are going to do anything to change this situation.   Some friends of mine were over from the UK recently and they gave me plenty of stick regarding the laughable 100% Pure propoganda.

our view:
We are cost line of an OECD country (health, welfare education and lux imports) ....,
We have a revenue line of a third world country (soft commodities)...
 
compounded by;
10 years of debt that has been mistaken for income and or productivity.
Fonterra pumping up payouts and cash payments (lighting a fire under dairy farm pricies) rather than retaining earnings that now are having to be gathered by the TAF....
Ag-inflation and the every upward costs of farm inputs (often without productivity gains)..
 
relieved by:
imports from China...
 
Note to self:
The Saudi's do not sell oil processing entities/assets.
The Norwegians did not sell their oil assets .....
The Thais have not sold off their chicken processing ....
 

Perhaps Fed Farmers are the real enemy?
 
Not quite. Their president is one of a number of mouthpieces for the real enemy.
 
Bruce has not to my knowledge ever had an origainal thought in his column. Neither does he stray from the government message of the day.
 
Whose propaganda is Bruce presenting?

C'mon andyh -  Yet extraordinarily farmers are allowed to do the exact same thing.  As are urban and community sewage schemes (legally and in breach of consents, dumping human effluent in to streams), and many other industrial manufacturers. Interesting you mention Palmerston North - they have had repetitive sewage consent breaches -  without prosecution.  So everyone pollutes, not just farmers - but mainly only farmers are prosecuted, others are let off scot free.  Where does that fine money go? Who really pays for the cleanup of rivers???  How exactly are you paying for the 'cleanup' of the rivers and what does that 'cleanup' that you personally are contributing to, involve?
http://www.stuff.co.nz/manawatu-standard/news/5621923/Sewage-causes-big-...

Bruce, sorry, but if that's what you 'believe', I have to regard you as a nutter.
 
"tend to believe that for all of our faults and we do have them, we do more good in this world than bad".
 
It's nothing to do with good, bad, or emotions, Bruce. It's about basing your activity entirely on a finite resource - and then being stupid enough to advocate expanding it. On what? You have no idea, have you?
 
"with a few more Kiwis"..
 
Why diminish the ratio of resources per head?
 
The phase where 'money' (more of it) could buy 'more' was a temporary arrangement, only  valid while the physical planet could supply the resources.
 
Only a fool would assume indefinite continuance of such a paradigm.
 
Oh, and AndyR - Labour are, regardless of leader, just as stupid. I talked to Care Curran recently, and her comments are an overlay of Bruces above. My comments apply equally.

I suspect Bruce is working to a perception management heuristic along the lines of:
 
If you repeat a big enough lie often enough many people will come to believe it.

Colin,
 
I tend to agree with your statement
 
If you repeat a big enough lie often enough many people will come to believe it.
 

You know what? I have heard this all so many times before, it just has to be TRUE!
 
Come on guys don't be haters, embrace the 'lie!'

I find that the stupid is so engrained in many spokes persons DNA.
 
My thoughts are that for a middle level political spokesperson's role you would want someone open to both incentives and positive suggestion.
 
Possessing the potential for critical thinking would be an automatic disqualification.

Wheew... Bit of flak Bruce cought up with his commentary!
Systema's product line is a model NZ should be following. Remember the Knowledge Wave advocated by HC a few years ago. Manufacturing top quality products is what I would like to see New Zealand doing. We have a few companies producing top quality products and exporting them and we should develop others. Pity we lost F&P to Chinese ownership. In my opinion as an engineer, thay are a worldwide top quality manufacturer of whiteware.
Weather we like it or not, we will be exporting food-stuffs for the foreseeable future, and then some. It is presently where our competetive advantage lies, but won't be forever, I hope. We need to evolve out of being a primary producer and into a manufacturing exporter ASAP.
As for our clean green image, it was always a mirage, and the tons of tourists attractedto NZ shores for a holiday by NZ Pure campaign did not help matters much, as a matter of fact it made it worse. And the more they come the worse it will get. We need to stop depending on tourism for our growth, just as we need to get away from the primary producer ranks. To be perfectly honest, it is a horrible job, at least in my opinion.
High tech jobs and platform companies is the way of the future. Tending after cows, or tourists, is for third world countries. 
Sincerely,
HGW
 

Damn I was in agreement with you there Hevi, until your nice little rant on cows and tourist. I have always believed in high end stuff and our ability to engineer better, obviously lots of engineers would agree, so why haven't they got of their fat useless rear ends and done something about it. Farming should not and never be our biggest export industry but it is simply by default. By the way my son inlaw did a engineering degree and stayed at F nP for 18 months, hated it but loves farming.
As to 15 million people, dum. We already have a consumption of imported cr$& problem we cant pay for so let's treble it, great thinking.

My sincere appologies, Redcows! I did not mean to belittle anyone, much less New Zealand. And I sincerely believe food produciton, like educatiion, should be given the highest regard, and reward, in our society. They are paramount to our survival and should be consiidered so.
My points were, that just as primary producers add value to their output by processing, high tech jobs add value to our greatest resource, Kiwi labour. And that third world countries with their largely uneducated and cheap labour force, are better suited for field work than educated first world countries.
Cheers,
HGW
 

Anyone know who is editing the comments this morning.
 
I object to my comments losing some of their context.

The incompetents have been at it again again!

Colin, it has been very sunny in Hawkes Bay recently. Perhaps Bruce has not been wearing his hat. But of course with all this sun we need the irrigation scheme that Bruce and the Nats are advocating for the CHB area.
The problem is that rainfall over much of winter and spring has been such that the small risky dam planned would contain little water anyway and the cost of using iwill be higher than the return for most products as well.
So perhaps the grow or die mantra should really change to consolidate and enjoy the water while we have it in the rivers?

the cost of using it will be higher than the return for most products as well.
 
So farmers, intensify and die (for a good cause - the Nats).
 
I am of course assuming Bruce had intensification beyond MC=MR in mind with 'New Zealand farming as the star turn in terms of productivity'.

Interesting link, but Tyler Durden has clearly not been following Bruce's column:
 
And for a suddenly very food trade deficit-vulnerable China, it means that the biggest winners may be Brazil, the US and Canada. Oh and Africa. The only question is how China will adapt in a new world in which it finds itself in an odd position: a competitive trade disadvantage, especially its primary nemesis: the USA.

Ive just been up to the Mountain and had an interesting day with an a guy in the fruit industry, he wasn't to hopefull for NZ. He thought our Kiwi fruit industry was going to die but he also wasn't optimistic about our Apple industry. He told me that the USA was in an expansion stage fueled by cheap money via the FED, he told me and from memeory, that 16,000 acres of apples are being planted on the west coast and NZ had at most ten years to termination. He thought that NZ like Canada had just got too expensive to compete in the Agriculture arena and are just too expensive in general, but NZ more so than Canada. He thought and he travelled a lot, that the low interest rates were going to wipe out a lot of existing industries in the west that had a high cost structures and high debts,unfortunatley that includes almost every thing produced in NZ.
 
http://www.professorfekete.com/articles/AEFLaborLeaders.pdf

Between 2012 and 2050, ANZ expects New Zealand to capture an additional $500 billion to $1.3 trillion in agricultural exports. This is an immense opportunity so striking the right balance is important. With good management and good science we can continue to improve how we interact with the environment and grow the economy. We can grow more jobs with an ever lighter footprint.
 
In light of Prof. Fekete's analysis Mr Wills prognosis of more jobs would seem farcical. All businesses savaged by falling interest rates (not just those paying fixed in the interest rate swap market) have had to move production offshore or employ technological/automation aids to eliminate local human capital demanding to receive a greater share of a dwindilng return pie to clear an ever rising share of imposed costs as business enterprises raise prices to offset the loss of effective physical/money capital in a vain attempt remain solvent. Such an obvious and yet blatantly ignored 'vicious circle' reality.

So, Andrewj, do you feel ex-banker Brucie as president of Federated Farmers is fairly representing the views of you and most other farmers in in Hawkes Bay?

Well for a start Aitkens are just average farmers, how they hell they became M&S best farmers on earth is a travesty. The entered farmer of the year in a drougt they had better rainfall country and only a few applied, they needed a farnmer of the year as they had advertising contracts to meet.  Anyone involved want to argue about it? the rest is past and M&S dont give a rats arse anyway.
 15 million Kiwis, is B/S they wont be15 million Kiwis, they will be the 4 million minority.
  Many farmers dont have much of an opinion about anything.
  Many large farmers are basic corpoartes, only concerned about the money, they do what they have to, and they dont have an escape plan. The environment,staff and stock are second or third to mamon, and the biggest beneficiary is the banking sector.
If I had to make a plan to destroy the landowning middle class, then the route we have been following is about as good as it gets.
  Teach mediocrity at school, detroy basic christian values, teach the importance of self and that you are worth it. Load the middle classes with unsustainable debt and then pull out the rug, before you know it we look like England or France of the 18th century, a small elitle cabal and a lot of serfs. Look how easy it was to destroy Fonterra, a couple of meglomaniacs a bit of promting and the rest will be history.
 Perhaps thats humanities default setting?  Is it time to fight back yet?

Thanks Andrew.
 
I will interpret that as a very firm NO to Bruce fairly representing the views of you and most other farmers in in Hawkes Bay.
 
I would normally have bolded a lower case 'no' but the censors would have pounced on that once my editing window expired, so I have used an uppercase NO instead.

christian values? oh god.....lets see how many times that piece of tripe says its OK to take what we want from the planet,  treat non-christians like dirt but its all OK god allows it....
Brain washing at its best.
When you are dead, you are gone...
regards

"The Fool has said in his heart: 'There is no God'". As AJ pointed out -  once you remove the value base then people's foolishness reigns.
People are custodians of natural resources - not to pillage, but certainly to utilise for the benefit of all - food etc...

Aj, what was the basis of your chaps pessimism re kiwifruit? 
 
With regards the USA - the apple acreage in it's biggest producing state, Washington, in 2000 was 168,000 in 2010 it had dropped to 153,000.
http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=...
 
 

Washington state has grown in Dairy..they hate and fear fonterra :-)

ah, but is their fear justified, speckles?  ;-)

CO, when one of your own stands up to those at the top look what happens
http://www.stuff.co.nz/southland-times/farming/6761165/Southland-farmers...

As a Southland Feds member Aj, I would say that your understanding of the situation is based on not having all the facts in front of you. Bruce Wills was called in to mediate as southland membership was divided. Think Fonterra shareholders pre_taf. :-)

CO, he thought PSA was not able to be beaten, at least not in the medium term, he felt NZ was not facing up to the crisis and its impact. We was a marketer involved in the supermarket industry he was intense and had a good head on his shoulders, he had just driven down from Washington after meetings with growers. Your link only had data to 2010.
http://www.youtube.com/watch?v=PDTPJzHKZ14
 
who grows the Apples ( we dont even get on the chart)
http://en.wikipedia.org/wiki/Apple
 
dont worry we are catching up fast with 35 new hectares
http://www.stuff.co.nz/timaru-herald/news/7649328/Orchardists-planting-t...
 
 

Even more planting in WA, Looks lkike a huge orchard to me.
http://www.youtube.com/watch?v=lfDIg8kaXhA&feature=related

Aj, reason I asked was that I live in the midst of kiwifruit orchards, though don't have one myself.  The growers around me say that they accept psa is here to stay, so now they just get  on and grow their fruit. PSA doesn't affect the fruit, only the vines. The growers tell me Italy and China have had various strains of psa for sometime and they just get on with it. The EU takes 47% of our exports. (2010 figure).
 
 

Im far from a fan of the austrian school, but as he says capital destruction....so the US apple growers are taking on huge debt.....with a depression coming.......cant see that ending well for them.
regards

 

Perfectly sound businesses fail if their debt burden, 

through no fault of theirs, exceeds the profitability of deployed capital. The whole process 

was most insidious. Entrepreneurs did not know what hit them. From one day to the next 

they found themselves uncompetitive as competitors financed their business at lower rates. 

They had to lay off their employees. They went bankrupt in droves. Wanton destruction of 

capital was the main cause of deflation and the Great Depression in the 1930’s.

 

http://www.professorfekete.com/articles/AEFTheGoldProblemReviseted.pdf

Between 2012 and 2050, ANZ expects New Zealand to capture an additional $500 billion to $1.3 trillion in agricultural exports
so for the next 38 years the agricultural  export sector has to achieve-- at  a minimum--annual  revenue increase,s of 13 billion annually---given that that the current stats for this sector are approx 32 billion annually this would appear to be highly optimistic----maybe Garth Vaughan could get one of the anz bank,s pointy heads to clarify how this is to be achieved------????
http://www.mpi.govt.nz/agriculture/statistics-forecasting/international-trade.aspx
 

also ask how thats achieved without mechanisation and fertilizer....ie organic production because oil and potash etc will be gone....or unaffordable.
There is a great series on cuba and how they achieved it (youtube)
regards

Pity we dont have a good sized desert next to the ocean here...
 
http://www.guardian.co.uk/environment/2012/nov/24/growing-food-in-the-desert-crisis
 
Wicked developments, imagine the potential!

The PBS series The Dust Bowl inspired an apt metaphor: ours is a dust bowl economy. What is the basis of the metaphor?
 
Simply this: those living in the dust bowl responded by doing more of what had failed rather than doing something different.
 
Several key responses actively worsened the crisis:
1. In response to declining prices for wheat, farmers plowed up more marginal prairie land to plant even more wheat: the idea was to compensate for lower prices per bushel by growing more.
We can anticipate the unintended consequence: bumper harvests further depressed prices, which fell from 95 cents a bushel to 25 cents a bushel (and stayed there).
2. Plowing up fragile prairie held together by native grasses exposed the soil to the winds, further feeding the dust storms.
In our economy, debt is the marginal field that has been plowed up for brief exploitation and profit
http://www.oftwominds.com/blognov12/dust-bowl-economy11-12.html
 

"1.2 million of us coming in just the past 32 years." and that should tell you heaps...
If not look up the  expotential function....and population and infinite and finite.
regards

The kiwifruit industry gloom is based on the PSA disease introduced to NZ by govt incompetence. I am amazed people on this forum dont know that a billion $ NZ export industry is on its knees. The apple industry is not as affected by U.S. apples as it is by Sth American production . That production base has far cheaper production costs but suffers from other issues including costs of logistics particularly access times to Asia.As an agricultural producer and exporter i have become sick and tired of people deriding the primary industries calling them low tech etc. the ignorance of the IP NZ holds in agriculture is unbeleiveable.unfortunately for all the talk NZ has come up with very few of the new wonder industries . and the guys who have done them have been wise enough tosell out before the bubbles burst.  Ag appears to be the only long term sustainable thing we do well and our small population assists in that.

Some very astute posings Andrewj.
The proponents of agricultural growth in New Zealand onviously do not understand the constraints that apply to agricultural systems.
The dairy land where money could be made on a regular basis (Taranaki, Waikato and some selected areas elsewhere) only required sensible management and targeted inputs.
The marginal lands still being developed rely on higher inputs and suffer long periods when normal pasture growth is below the stocking rate seen as necessary for banks to loan. This has led to high inputs of supplementary feeds and nitrogen to survive, but not to profit. But costs in New Zealand are now so high that farming struggles as the rest of NZ feeds off itself (in terms of service, regulatory and taxes).
There is no wealthy agrarian based country. The competition from less taxed and regulated agricultural land will continue to build. NZ no longer has the resources to achieve the increases required as in the end it is a finite game of energy (sunshine) water and soils capable of growing food economically and energy costs to harvest, process and transport that allow margins for the producer.
So your dustbowl example is pertinent -except in NZ's case it will be water that is destroyed as a resource first. And that is not easily survived.
 

Robpeter for number one farm supplier on Earth? Pity, we just need another Earth and we need it soon please.

Good grief, I am glad I will not be around to see your vision realised, Bruce. This is a planet that needs less people, that means not as many as there are right now, in case you are a little confused.
I agree that a vibrant internal economy is necessary but it does not require having the country over run with people. The problem is there is less and less for people to do and with more there will be less still. I suggest that we would not be able to go fishing freely as we do now for a kicker. More people, more and more restrictions on your life, more and more reliance on others for your food etc, try growing a vege garden in an apartment
As time and technology roll on fewer and fewer people are required to do the work to provide, so what are these people you propose here for, oh that's right, consume. Then the privileged few with the means to make money will have even more to bitch and moan about the lazy unemployed, oh well they could go and pick through rubbish dumps for rags
A few years ago it was touted that we needed about 5 milliion to improve the economy, well we are about  there, the economy is crap, so tell me when we get to 15 mill, the rescources are stretched and the economy is crap how many will the likes of you be advocating we need then, 30 mill, 60 mill.
No, growth as we know know it is and must come to an end, think of another way, I'd like to think my descendants will still be able to swim in the seas and again swim in rivers

I too am glad I won't live long enough to see New Zealand with 15 million people.
 
And with respect to 15 million being good for the economy.   For some areas yes. For others no.
 
http://globaleconomicanalysis.blogspot.co.nz/2012/08/robots-to-rule-worl...

Andrewj - dont forget about the fact that agriculture graduates are as scarce as rocking horse shit (instead we are now going to produce more engineers!!!! wheres the foresight in Govt.)
Does nobody understand what industry makes this country go round????
So whos coming forward in the industry thats going to have the brains to build this sort of sustainable agricultural growth the pin heads are predicting??   

Interesting Grumpy, but as a counterpoint I recall an Nine to Noon interview with Prof Hamish Gow of Massey, in which Kathrine Ryan expressed the same thought in sofar as much few agricultural students, but Prof Gow disagreed. He went on to outline his vision for the future of NZ ag, as being more large scale corporate (Queen St) ownership of land and large scale operating companies managing the day to day stuff, and in that sector there will be a need for ag graduates as mangers. I suppose an example is Landcorp with Wairakei Pastoral and Shangai. Pretty depressing prospect if you ask me, hope my kids are bright enough to take an interest in engineering.

He sounds like an idiot and I'm being kind.   
 The end of the land owning middle class, how could a farmer compete with the buying and selling power of large corporates. Teach your children how to fight, they will probably have to!
 
'Viva la Revolution'

The planet is already overpopulated, NZ should be planning for a static population as the global fight for water intensifies and climate change destableises much production. Japan/China at least will increasingly look for reliable suppliers of safe food.Financially/fiscally disadvantage corporate farmers to even the financial field, corporates are not innovators, individual owners usually are through necessity, working farmers may not be as well educated as the Queen St  farmer but are usually far more savvy when it comes to actually getting things done.

Omnologo & Andrewj
I couldnt agree more - depressing yes and not the career path a sharp kid will take - this is also what Im seeing with my own kids and their mates - spending 8 hours a day in a cowshed for 300 days a year isnt to much fun compared to 15 years ago when u had 3 hours a day in the shed and the rest of the day to sleep or play with the toys............. 
 

Well Im afraid the bureaucracy knows best, so take your medicine like a good boy.
 
http://www.pbs.org/kenburns/dustbowl/