Federated Farmer president lays out how his vision for farming issues will play out in the future, both globally and locally

Federated Farmer president lays out how his vision for farming issues will play out in the future, both globally and locally

When we think of the Heartland we conjure up images of the rough and ready can-do farmer striding across the high country.

But the farmer of the Heartland is not confined to this image. 

Farming in the Heartland is a technically challenging career.  I am in constant awe of my fellow farmer, who every day must make complex decisions, dealing with the vagaries of weather, biology and the market.

Like me, my grandfather also came to farming from medicine and for the rest of his life found incredible satisfaction in the scientific challenge farming brings.

The Heartland has contributed enormously to New Zealand and our development as a country.

This month we commemorate 100 years since New Zealand’s recognised baptism of fire. 

Farmers contributed their horses and their sons to the war effort.  Almost every horse and many of our men never returned. Back in New Zealand the production of food and fibre had to continue apace.  We remember the past but we also must look to the future.  The future of the Heartland.

Today I want to reflect on the contribution science and innovation makes to agriculture.

I want to traverse some of the issues that are concerning Federated Farmers and I want to give some reassurance that, not only does the Heartland have a future, but New Zealand’s future depends on the Heartland; and that future is bright.

We live in a global world.  We are part of its problems and we are part of the solution.

Every three weeks the world population grows by 1 New Zealand – 4 and a half million people. 

Because birth rates in Africa are still climbing the latest UN projections have the population peaking at almost 11 billion by the turn of the century. The Food and Agriculture Organisation estimates that agricultural output must increase by 60 percent by 2050 to meet this growth.  That means the amount of land available for agriculture to feed each person on the planet will shrink so that while in 1960 one hectare was needed to feed two people, by 2050 one hectare will be needed to feed six people  – a three-fold change in less than a century.

New Zealand cannot feed the world, but we must play our part.

It would be irresponsible of us to squander or underutilise our resources.

The green revolution in the last half of the 20th century gave us spectacular increases in productivity and production. This was through the use of pesticides, fertilisers and modern hybrids. But these techniques on their own will not be enough, nor will they necessarily satisfy the requirement to reduce our environmental footprint.

We have just heard about biological farming but there are many forms of farming and they, in my view, fit across an overlapping spectrum.

At one end there is organics. But there is also integrated pest management, conventional agriculture, no-till techniques, conservation agriculture and modern biotechnology - including genetic modification and the newer gene editing techniques.

We can and we should learn from each of these techniques and understand the contribution each can make but at the heart of our progression as farmers is the scientific method. 

Science is not a fundamentalist world view, immobile to change.  It is not common sense - after all it was once considered common sense that the sun revolved around the earth. 

Science is a methodology. It is about postulating hypotheses and then trying to prove those hypotheses are wrong.

Like evolution, only the strongest survive.

We must put our assumptions to the scientific test. We must discard those assumptions which science shows to be wrong and we must be honest about the expectations of the farming methods we choose. Farming becomes a fundamentalist religion if we cling to our assumptions in spite of the evidence.

To ensure we have an honest debate – be it about climate change, health and safety, genetic modification or water quality - we need a public who are science literate.

It has concerned me that science is not valued or understood in society. However we are seeing glimmers of hope.  Led by the Prime Minister’s Chief Science Advisor, the government is taking public science literacy seriously and agriculture will ride on its coat tails. 

In the public discourse on fluoridation, immunisation and 1080 we are seeing the public starting to back science and reject the worn out and unsupported rhetoric of the anti-science campaigners. 

In the debate and science of genetics, the world is thundering past us.

But there are signs the much needed discussion and reconciliation with science is happening. The editorial of this month’s North and South profiled the role of the fanatic and asked “Is GM the bogey man of our time?”  It said “Unless I’ve missed a report on killer frankenchips, global deaths from genetically modified food are, to date, zero.”

The editorial ended on this quote from Bertrand Russell: “The whole problem with the world is that fools and fanatics are so certain of themselves but wiser people are so full of doubt”.

Doubt reflects a healthy scepticism which is critical to the scientific process. Science also requires we use all the facts at our disposal, not pick and choose those which suit our view.

If we are to see our Heartland prosper we must avail ourselves of all the tools of modern science and technology.  We have been world leaders in agriculture because we have been doing just that – we didn’t invent fertilisers but we adapted the science to our own situation – this is the strength of our innovation.

So we are encouraged to hear that the government is to increase research and development support to businesses by 80-million-dollars and we recognise that science is the only portfolio which has seen increases year on year through this period of government austerity.

Prior to the election Federated Farmers called for an increase in R&D spending of 600-million per year to bring us up to OECD levels. This year’s announcement falls well short of the mark and it also fails to address the chronic underfunding of basic research and critical capability, but it is a step in the right direction and we hope there is more to come.

We must continue to remind politicians where our strength as a country lies – and that strength is in biology.  The digital revolution is upon us. The democratization of biology is just around the corner.  We must invest in our digital future in addition to investing in biology - not instead of investing in biology. 

Biology, and by that I mean agriculture, is rooted in the land and, as the cliché goes, you can’t take it with you.  So while innovations based on biology may take longer to develop they are rooted here to the land and deployed here in the Heartland. 

Our digital future will increase our productivity and help us reduce our environmental footprint as you have heard from Craig and Roz.  But we need the infrastructure to support it – we need good connectivity and we need it fast if we are to realise our potential.

North Canterbury remains the driest part of the country this year.  We in South Canterbury have had some relief in recent weeks, but one look at the landscape here confirms that it has not reached this far north. 

I am told rivers that have flowed for most if not all of the past hundred years are now dry. 

If the predictions of more frequent future droughts are true then we must all build a greater resilience into our farming operations.

I know that is of little comfort to farmers here, and wider afield to the south, who are struggling to get through to spring growth.

If there is one message I have here, then it is to talk to people who can help and plan ahead and prepare. Look after each other.

Longer term, water storage remains at the top of Federated Farmers’ agenda. 

Water storage builds resilience – economic resilience, community resilience and environmental resilience.  Water ownership has been a hot debate over the past week, and to a great extent, that is a debate for the government to have with iwi and the public.

But I make some observations:

  • Ownership of water should not be confused with governance.  If it is, there is a risk that self-interest will get in the way of good governance decisions.
     
  • Secondly, any solution should not create a further grievance – in this case a grievance with farmers.
     
  • Third, there should be one system for all.  Perpetual ownership by one group, and short term rights for the rest, is not a recipe for simplicity, equity nor harmony.

We need cool heads if we are to get this right.

Solutions for Maori economic aspirations in water could well come through water storage.  By contributing to the development of water storage, government can help create the headroom for negotiation and settlement if such settlement is justified. 

And note I used the word “contribute”, not “invest”.  We already have Crown Irrigation Investments to address the hurdle of early capital shortfall and this has been welcomed by Federated Farmers.  But there is a case for government contributing to water storage in addition to its investment.  To create headroom for negotiation as I have just said but also to reflect the contribution water storage makes to the environment and the community.

Farmers are willing to pay for the benefit they receive from water storage.  They do this through the market and their own commercial decisions.

But water storage also provides the opportunity to improve habitat, increase environmental flows and provide recreation.  Both local and central government should also consider their financial contribution to effect these outcomes.

Equity in a resource-constrained world is hard to achieve.  Like water, we can use science and technology to provide more headroom in the allocation of nitrogen emissions - a fraught topic in this part of the world in recent months.

I have two principle tests for success when it comes to allocation of nutrient emissions:

  • The first is that any solution must not undermine the business value of the high emitters.
     
  • The second, and competing test, is that any solution must not undermine the land value of the low emitters.

These tests have not yet been met in the Hurunui but progress is being made.

We used these principles in South Canterbury.  With strong farmer leadership and early engagement from all farmers – dryland and irrigated – we came up with a solution which was devised by farmers, which farmers saw as equitable, and who now have genuine buy into, and ownership, of the results. 

We rejected grandfathering of nutrients – that is allocating emitters a property right related to their current emissions. 

We also rejected equal allocation per hectare. 

The final solution provided for flexibility of land use for low emitters with realistic targets for reduced emissions for high emitters. 

The key though was to have all farmers working to best practice and a sinking lid on maximum emissions as best practice through science improved nitrogen retention.

Depending on the state of the catchment the nitrogen freed up can then be redistributed to farmers or allocated to the environment. 

Continued environmental monitoring is critical and the system should be flexible enough to change as more information flows.

The challenge now is for the regulators at Environment Canterbury to translate these outcomes into a plan. 

The government has set an aspiration to double the value of primary exports by 2025. 

It is nonsense to think that we should or could do that by simply doubling production.  There is headroom to increase production in some areas, and productivity can be improved.  Yet the key to reaching this aspiration is through the investment in, and application of, science and innovation, to develop new products and add value to our current ones.

This is how we increase value and attract a new generation of customers who are looking for a safe and trusted source of food for them and their children. As families get smaller, people have become more risk averse for the children they have and that is reflected in the market place. 

We have seen this in the Chinese response to the melamine milk scandal where precious children were put at risk. I think this response is instructive.

Consumer demand driven by ethics, environmentalism represented by fashions such as organic food will come and go. That does not mean to say there are not bottom lines.  There are.

However, the basic food characteristics of quality, safety, integrity and value are here for the long term and are the real influencers of purchasing decisions over the long term.  These characteristics depend on science and good communication - not hype. 

Our reputation has been hard earned.  It is reflected in the muted consumer response here and overseas to the recent 1080 threats, which could have escalated into a serious trade issue.  It was not our self-characterised clean and green image which got us across the line but our reputation in the market place for honesty and integrity.

Implicit in that was good communication and the application of science and evidence such as ensuring supply chain security and implementing testing regimes.  So, this case just serves to illustrate that at quite different levels, science and technology has a vital role in our agriculture success.

Let us combine those tools of science we have in this country, with the natural resilience, skills and commitment of our Heartland farmers. 

The world has limited resources to feed and sustain a burgeoning population.  We have favourable climate, good soils and plentiful water. That makes us the lucky country. 

Let us not squander those resources by leaving the heavy lifting to other countries and other communities.  We have a part to play and a leadership role in this space.  Our leadership is driven from the Heartland, our future lies in the Heartland and the future of the Heartland is bright.

----------------------------

William Rolleston is the President of Federated Farmers. This was a speech delivered to the Heartland Forum, at Conway Flats in North Canterbury on 17 April 2015.

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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THIS is why NZ farming is failing.

http://www.stuff.co.nz/business/farming/67846001/Dairy-farmers-told-to-p...

DairyNZ and other _experts_ think the _NEW ZEALAND_ drop in milk price will affect _European_ farmers badly....despite the _fact_ that Aussi and foreign countries get totally different milk payments.

With shit for brains leadership like that what hope is there.

looks like "ul" underline tag isn't displaying properly, as it's doing weird things to the paragraph.

No, DairyNZ said nothing of the sort .. those comments are all attributed to the 'other experts' quoted - not DairyNZ. In fact, it seems DairyNZ is doing exactly the right thing - that is, trying to prepare its suppliers for cash flow problems and the inevitable erosion in their incomes.

Exactly the wrong thing you mean.

If they were doing the right thing the would be pushing hard and noisily for fair wage and proper rate for raw milk pricing - not trying to instruct farmers to cut more corners.

DairyNZ's way is enabling of poor payouts and is why there is little money for improvements. The only ones able to progress are the ones who have free farms - not those running as proper business or paying rent.

As for saying its a good thing that would be the talking head I spoke to. that confirmed this was a good thing "as NZ farmers were price competitive" and that we had great quality systems and innovation will save us (no mention of farmers protecting their IP).

and neither expert nor DairyNZ mentioned that not only do they get through their local market, better prices than Fonterra's bulk "temporary mall sale" technique of moving static product, but as skudiv mentions they _also_ get subsides to help them integrate increasing standards and technology !!

So the food commodity you are producing is going through a slump in the price cycle. Welcome to the banana republic. Growers are being screwed the world over because the globalised 'middle classes' can't afford the product except at these rock bottom prices. I can't believe I'm still paying $1.00 for a loaf of bread - I feel like a participant in this model of globalised slave labour exploitation every time I buy one.

The expert failed to mention EU subsidies where are still here to stay, the quotas were designed to limit the amount governments had to pay in subsidies, this will be watchable.

I searched this article for 'economics' and found no match.

'Science' had 11 matches. 'Innovation' 4.

'Perception' found no matches. And that was without adding ' management'

cau$e the economic$ are de$cribed by the$e motivated type$

[PDF]Rounds, rumps and sirloins - Colliers International
www.colliers.com.au/~/media/.../RuralAgribusiness_RFR_2015.ashx
In New Zealand dairy farms remain in high demand....

see page 26/27.
Robust outlook in 2015
The outlook for New Zealand’s rural and agribusiness sector
remains robust, with purchasing demand for rural related property
expected to continue over 2015. The long-term view being
promoted domestically and by the growing number of institutions
and off-shore interests in the market will keep momentum steady
despite short-term fluctuations in commodity prices, especially for
logs and dairy.

The rise in irrigated farmland across New Zealand by the private
and public sector will facilitate further production efficiencies and
value gains at the farm gate. This will lead to higher land values
in a sector that is already appreciating in value. This will place
further pressure on the family-farm based model with many
farmers already concerned about funding for future generations.

The increase in off-shore ownership together with the greater
levels of production in offshore markets should continue to
drive innovation and exploration of value-add products in New
Zealand’s primary industries. The promotion of New Zealand’s
image and attractiveness as an investment destination is expected
to grow, supporting increased efforts to reduce land and
water pollution.

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

- Ludwig von Mises

It looks to me like we are going for option two, currency collapse.

"Long distance information, give me Memphis Tennessee"

http://www.commercialappeal.com/news/investigations/borrowing-trouble-me....

Expansion.. beyond City Limits.

Going for broke...but not a patch on Detroit.

Awkland information, give me a bell...ding.

And round 2 of the liquidity squeeze coming soon I suspect. This time it will likely last a whole lot longer as I doubt the US Fed will be as considerate to foreign sovereigns, as it was during the last round.

Jeez that wasn't written by a New Zealander, was it. Please tell me it wasn't, please


However the market is starting to differentiate between reliable low cost irrigation sources as opposed to those that may be exposed to higher cost or lower reliability.

One of the few sentences that appears to be up with the play but I wonder if many of those in the Ruataniwha scheme have woken up to it.

More than likely they are marketing to pension funds who want out of the Euro and the Yen, demand for security is starting to take over from yield.
I don't think they will find either in NZ dairy farms or sheep and beef for that matter.

http://www.telegraph.co.uk/finance/economics/11548318/Caveat-creditor-as...

New Zealand would do well to play its part in helping the rest of the world understand that the planet cannot support 11 billion people and how important it is that we begin to reduce our numbers now, rather than thinking how we can further ruin it by trying to force more and more out of it. That would be the best contribution we could make.
The best innovations we could come up with is ways humans can prosper without increasing numbers.

Totally agree, but even the NZ Green party wont go here.

The greens do have policies that acknowledge this, but at the moment the job is getting people to understand that this is not only a "thing" but it is a very urgent thing

They are as deluded or silent (I cant figure out which) on "sticky subjects". I have tried commenting to several Green MPs and others in the Green party and frankly I get silence, or "yes we have a peak oil policy" in reality check it is never mentioned. "Population conrol" is taboo. Keith Locke used to say that )paraphrase) culturally we cannot mention such things to minorities who want big families. Lots of "greens" still think this way, I know I argue with them. "its not democratic", "you cannot dictate", "you are crazy" then they walk/run away. I can understand why past civilisations collapsed, utter refusal by the majority to change until its too late. It looks like we will go the same way.

Sadly, political parties are driven by the voters, (e.g. Labour and CGT) so I guess it is up to us, the little voices in the wind, trying to shout over the noise of the many, but we will have to keep shouting until people start listening and bit by bit they will, I just hope bit by bit is not too late.
BTW we are on the brink of using the old tried and true method of having a bit of a cull - war and I mean big war.
People, if you care even just a bit, think about all of this, think beyond your own bank account, think and educate yourselves. we simply cannot keep doing this!!

most of those billions of people think food comes from supermarkets and factories.
many of them even think food should be free....

... as innovative Kiwis , New Zealand could play its part in helping the world de-populate by mandating that Air NZ must fly over the Ukraine before reaching any destination ... that should reduce our numbers with immediate effect ...

Sounds like a plan

Go back and consider "Today I want to reflect on the contribution science and innovation makes to agriculture." how much the first two rely on fossil energy input. Then consider we are at peak oil and that a decline rate of 4% per year til its gone in 2050 or so. By 2030 or certianly 2050 we wont be able to feed 5billion let alone x2 that. On top of that given the damage we are doing at 7 even in a BAU its not sustainable.

Actually we will be largely organic by 2050 so farms output will be 60% down and not " must increase by 60 percent by 2050 to meet this growth.

On the bright side for 4million ppl we apparently feed 20million today so no NZer should go hungry even on 1/3rd our present output.

they'll just go to vertical hydroponics, force meat off the market of the common people. Bring in more processing and bulking agents, which are cheaper than actually growing food. Basic economics... Solent Gold they'll call it...

Muufri Milk is just the beginning .... we've already been served up the Beefri Burger ... Paddyfri Rice will be next ... Fieldfri Fries after that ...

... it's only a matter of time B4 the entire food production chain takes place inside , in stainless sterile factories , and we abandon sunny green fields entirely ...

Then where will our thousands of multi-million $ dairy platforms be ? .... converted to pre-schools and backpackers hostels no doubt ...

... ah well , at least the tourists will have no excuse for not being able to locate a toilet ... and it'll be a doddle to clean up any poo-poos from the naps of errant pre-schoolers , sluice 'em out .... bloody good wash down hoses those dairy farmers have ...

After eating a sausage at one of those fundraisers outside a Bunnings I did wonder, 'where's the beef?"

"Consumer demand driven by ethics, environmentalism represented by fashions such as organic food will come and go"

wrong see above.

Unless of course we get down to "do it or starve", but given you dont recognise or understand peak oil and its impacts this seems unlikely.

As an aside (sort of)

http://peakoil.com/enviroment/emergency-shut-down-of-west-coast-fisherie...

We cannot survive without a food chain and eco-system.

I drove past a factory dairy farm in mid Canterbury the other day, pretty depressing sight, the cows get out for an hour per day if they are lucky, the rest of the time they spend in big barns. Cost of production last season was $6.50, this season it's $6.30 excluding interest costs. It's hard to see the point of increasing production when the returns are not there, what the world actually needs is cheap food. Irrigation is expensive, hence can only be used to produce expensive food. Which is not the kind of food that most of the worlds population can afford.

There is something called the nitrogen cycle which puts an upper bound on how much food you can produce, simply put; 'more nitrogen = more food'. Nutrient limiting policy is putting an upper bound on the amount of food per hectare you can grow. There are thousands of studies showing how pumping on fertiliser increases yields, yet another layer of costs making food production more expensive.

While science has made iPads and TV's cheaper it has made the costs of food production more expensive. The dairy industry gives accolades to those who have the lowest production costs, when you look at how they farm, and how much they produce, their methods haven't changed much from the '80s, (minus the DDT, which is still active in the soil today) and there production is in the lower quintile.

In summary this is a predicament, there are only outcomes. Keep pursuing the science, increasing production and producing more expensive food that nobody can afford, or produce less food, that people can afford using old fashioned methods that require little in the way of inputs.

"what the world actually needs is cheap food" you hit the nail on the head.

Joseph Tainter comments that to address its problems a civilisation increases complexity which increases energy use. The problem arises in a) diminishing returns and b) when there is no more energy to support the complexity. Worse of course is when available energy declines. So when the author mentions the "green revolution" it is nothing more than throwing copious amounts of fossil fuels at the food production cycle.

Your last para also applies to energy production btw.

I basically plan my future with that in mind.

"what the world actually needs is cheap food"

is that cheap as measured at the farm gate or on the plate..
cheap for whom.

there may be two sciences. the first as you describe which is basically more of everything (all inputs and gizzmos) as promoted by the visiting farm marketing and sales reps...
the second being the journal reviewed etc which can be as much change the way as use this....

what do you make of these folk http://www.myfoodbag.co.nz/

It's basically cheap food for the 11billion'ish people the article refers to, it has to be cheap to produce, and cheap to buy, so farmers can afford to produce it, and people can afford to eat it.

I agree that scientific research is often used as marketing for a product, and then there are the journal types that promote optimisation or efficiency. Aside from bogus claims (of which there are zillions) using cooked numbers such as the claim "I feed 300 people off of 2 acres" I don't really see any studies where using less produces more.

My food bag is not something I'd be interested in, but a pretty innovative business.

astroturfing...

http://publicaddress.net/hardnews/my-food-bag-is-it-any-good/

I am sure some yuppies with lots of money and zero time to shop will do it...

Cheap for the consumer, the economy and the Politician. I think it was Nixon? who said take food off the political agenda and the US food industry did. When food (energy) is cheap that leaves "lots of" spare income/wages/energy to grow the economy/GDP by spending it. If food/energy is "expensive" there is less or no growth which is what we have been seeing.

foodbag, 5 meals for 4 adults = 20 meals. 7 days per week, 3 meals per day 4 adults = 84 meals. based on the $162 per "bag" that means 162 x 4 = $648 per week on food. My weekly food bill is >$300 for 3, so it looks way expensive. Digging back through ownership points to OZ, so this looks like a franchise operation, hardly "local". Cant find who actually owns the operation, ie if say its owned by "countdown" or similar, that would be a laugh. On top of that I see nothing saying it is say organic, in fact its noticeable by the absence of the word. I could go organic 100% I think if I doubled my food bill like this. Looks more like expensive marketing hype as a way to charge excessively for standard produce.

Price is not "per bag" - it's "per week:

* 5 recipes every week
* 5 meals for 2 adults and 2 to 3 children
* Auckland, Hamilton, Cambridge, Tauranga, Palmerston North, Wellington and Christchurch

$162 .50 Per week Free Delivery

And on top of that add breakfast, lunch, stuff to wash the dishes, the clothes, the body in the bath, the bath after the body has been in it, the loo, the shampoo, the underarm stuff, the snacks, the fruit, the light bulbs, the batteries (for whatever) the sedatives (wine, beer, single malt) and the first aid kit complete with hangover cures, the tucker for Fido or Felix or Polly and suddenly your $165 to do 5 meals (starve on Sat or Sun I guess) starts to look a bit well how should I put this, extravagant

"cheap food" for what? To have yet more babies to advertise and get finance jobs?

Cheap for the environment, cheap for the cultural impact on our wildlands...otherwise affordability.

Cheap cash-wise will just be like when SMS messaging was free. Then food fights and disgusting eating contests will be even cheaper to make than "reality"/unscripted TV shows.

Ah (but to borrow and para phrase from the hitchhikers Guide to Galaxy).. you've got to remember everyone is still happy and no-one is adversely affected.... no-one whose vote actually counts, that is.

It's not that the world needs cheap food, the world needs to realise that when basic foods are getting more expensive it's from strain on our food supplies.

the nitrogen cycle can be improved by going vertical. By using algae processing as fillers, as technology exists to hybridise algaes to act as nutrient/chemical propcessors. It still can't beat the nutrient requirement for growth but any waste product or effluent can be recycled back into the algae, then process the algae into nutrient stock for food algaes/vertical farms.

Cash price can be brought down by production volume, fillers, added value promotions to alter perception of price and by pushing up minimum wage making it look cheap.

Skudiv your'e right in that most dairy farmers will be making losses this year at these levels, but I think your $6.50 cost of production is way too high as an average across most in my experience. Including interest, it seems to average a bit below $6, with obvious some lower and some higher. But a $6 plus pay-out next season is what everyone is hoping for, and now at risk but early days, as it will at least put most back in the black.

Like so many commodities it all comes down to China.

http://www.milkspecialties.com/news/april-dairy-market-update/

China Bubble Watch:

April 13 – Bloomberg: “Even the world-beating rally in Hong Kong’s stock market can’t compete with Chinese investors’ favorite way to make a quick profit: initial public offerings. While mainland traders purchased the maximum amount of Hong Kong shares allowed through the city’s exchange link with Shanghai on Wednesday and Thursday last week, inflows have since slowed and were 57% below the five-day average on Tuesday. A key reason for the drop-off is that investors are turning their attention to the 30 Chinese IPOs taking orders this week, according to Hengsheng Asset Management Co. The offerings may attract 2.73 trillion yuan ($439bn) of bids, almost the equivalent of Malaysia’s entire stock-market capitalization, based on the median estimate of six brokerages. While a projected oversubscription rate of about 150 times means the odds of getting into an IPO are slim, the reward is too big for investors to ignore: every one of the 147 mainland IPOs that began trading over the past year jumped the maximum 44% allowed on their first day.”

April 13 – Bloomberg: “Confident that China’s stock market rally still has legs, Jiang Lin recently began borrowing money from her brokerage to buy more shares. Her newly-opened margin finance account with state-owned China Investment Securities Co. has allowed Jiang, a 29-year-old marketing executive in Beijing, to double up her bets on the vertigo-inducing rally in Chinese share prices. ‘It’s worth the risk,’ said Jiang, while admitting she doesn’t fully understand how margin finance works because she hasn’t had her broker explain it to her. Investors such as Jiang are part of a $264 billion dilemma facing the country’s securities regulator, the China Securities Regulatory Commission... China’s margin finance now stands at about double the amount outstanding on the New York Stock Exchange, after adjusting for the relative size of the two markets. ‘Regulators are aware of the risk of rising margin debt but they can’t afford to puncture the equities bubble with very draconian measures,’ said Lu Wenjie, a Shanghai-based analyst at UBS… ‘They want to pelt the mice without smashing the china.’”

April 15 – Reuters (Clare Jim): “Growth in China's real estate investment in the first quarter slowed to the lowest rate since 2009 as developers prioritized clearing inventory amid a housing glut, while the rate of fall in property sales narrowed. Property investment growth eased to 8.5% in January to March from a year earlier, …dropping from 10.4% in the first two months of 2015. The 2009 low was 8.3%.”

$6.50 is the cost of production inc interest and drawings for the average dairy farm as per Dairy base on a Canterbury Marlborough farm. The above costs excluded interest and were specifically for a factory dairy farm which no doubt gets more production per hectare, but the costs are a lot higher then your average dairy farm.

Ok, got you, makes sense.

So lets look at the article overall, really it is a shutdown piece,

a) 'I came from "medicine and for the rest of his life found incredible satisfaction in the scientific" So I am a scientist, and what I say is science based, trust me. ' um no.

b) "We must feed the world and we are responsible", implying anyone who doesn't agree with me is not.

c) "Our digital future will increase our productivity" so the urbanities can pay for the broadband we cannot see as economic. So let externalise the losses but keep the profits.

d) "Longer term, water storage remains at the top of Federated Farmers’ agenda" so lets not change how we farm to allow for dry conditions and cliamte change. Lets build more and more complexity, cost and energy consumption into the system.

e) "killer frankenchips," check obesity in the US and indeed NZ as cheap food pumped full of salt, sugar and preservatives fed to "us" is huge quantities via the likes of MacDonlads (who btw are losing money?). Oh and there is little evidence that GMO tech has increased production, it reads more like its been altered so you have to buy our "total solution" and the price we dictate. Also check out the growing disquiet of ppl wanting GMOs labeled in their food. I for one wont buy US food.

e) "But water storage also provides the opportunity to improve habitat, increase environmental flows and provide recreation" great so lets use this to fob off the Greenies". You dont get it do you.

f) "But there is a case for government contributing to water storage in addition to its investment" so one the one hand you are willing to pay but on the other back to 'socialise the losses keep the profits"
2 faced comes to mind.

I could go on but really I have other things to do. Really this piece is the same ACT party type clap trap you have written earlier, but more subtly written, maybe.

If GMO was about providing food, they would engineer weeds to be edible , at least to stock. buttercup, ragwort, californian thistles, coxfoot/browntop far more resilient to weather - just engineer them so they're stock fodder. then they won't be "weeds" anymore and you won't need the weedspray :)

But no. GMO is design to lock business and the food chain into a proprietary product. And we all know what that means for business and customers. GMO foods still need the same nutrients to make edible stems, leaves and fruit. often they need more water and more consistently (because of growth rate). the only advantage is yield weight per hectare or per processing day...which justifies the extra spend on weedsprays to keep down the pest/weed rate.

I was talking to an older guy the other day about the idea for water storage projects in our area. The obvious point he made to me about it was if you irrigate all the stone country in the area and convert the land to dairy. You are using the land that winters the cows. Where will the cows then be wintered plus the extra cows from the new conversions?

in the barns, eating the palm kernel and imported alfalfa and fodder beets

Becomes a very expensive operation then cowboy. Paying for water (wether it's wet or dry) ,plus buying in all the winter feed.

If a rainforest in Indonesia burns and there is no-one who gives a damn to witness it, was there ever really a rainforest

Come on!! It is still happening

Science created chernobyl, fukushima, 3 mile island, the testing in the pacific, etc etc. Sometimes science is way wrong.

Ah yes Tim. Where will they winter the cows. Currently the beef farm is in profit. As it is every year. Probably cant say that for many dairy farms.

whats your equivalent rent cost ? 4% of land and plant value?

If a foreign company buys the land their rent cost is?....Zero?

Hi Cowboy, it may not be fair to quote our business as we have been operating 18 years now. The mortgage so low I dont really figure it in now. The market value here is pretty low. Probably a third of a comparably sized dairy farm. So wots better for NZ. A small family business with little debt, but making profits.Or the corporates using imported labour and imported fiat. Taking profits offshore. I shall not call it money or debt any longer. It is a figment of imagination.

Absolutely it is the former, but can it stay that way. I sure hope so

I vote for the former as well Belle. Well put.

Rent cost equivalent please.

The current land value (at what a professional valued would give) and what that value asset would be rented out at on open market.

What's better for nz is that the product you produce is valued high enough to cover its cost, including future expansion. ... Not relying on deferred expansion and short cuts. The most obvious one of these is "rent" otherwise know as the yield you get from your capital assets. Theoretically it should be at opportunity cost ...about 7%. But farming is also a lifestyle, so your rent I would expect to be around 4%. If you are not taking that off your business profit, then the asset owner is subsidizing the small business at the tax payers expense.

If you rented the property to a third party would a 4% rent of its value seem low or high? It you were the tenant would your business still be profitable if you had to pay that rent? In dairy the answers no.

.

My point is when you let foreigners buy the land and they can borrow the money at close to 0% interest, valuations get scewed. If we get 5 years of low dairy prices will dairy land values drop? Or will the govt. quietly sell off more land to foreigners with the excuse of protecting our banking system?

And things are no different in the housing market that Key has had the audacity to come out today and suggest that not only is it not over-priced but perhaps that it is under-priced. God I wish he'd then been asked to comment on how NZ wages stuck up against it then

Or will interest rates have to drop here to avoid a dairy land price drop?

I think that that is a given.
When the interest rates get low enough, I will dive in, leverage, milk it for all it is worth, hedge, irrigate and barn storm and seek co-operation with others and tan the hide off the futures, beef up the ploy, make sausage meat of the opposition, cut the guts out of the equation, then sit back and live off the spoils.
Whilst exporting and still milking the locals, who we have imported to compound the driest of assets.

Oh...and Land Bank the balance, divide the rest and live Happily Ever After.

TILL the next time, the crap hits the fan. By then I will really go for broke. If I inherit enough from Ma n Pa., if they have any savings left, that is.

If we are selling farms and houses and expect international market prices, then we also need lower interest rates to compete internationally.