Finance Minister agrees $2.40/kg payout would be "disastrous"; says RBNZ and Govt in talks with banks to 'go easy' on farmers

Finance Minister agrees $2.40/kg payout would be "disastrous"; says RBNZ and Govt in talks with banks to 'go easy' on farmers
Finance Minister Bill English talking to reporters in Parliament on June 19. Photo by Lynn Grieveson for Hive News.

By Bernard Hickey

Finance Minister Bill English has admitted the Government and Reserve Bank are in discussions with banks to ensure they don't prematurely force dairy farmers into mortgagee sales that could trigger a dangerous spiral lower in land values.

English's comments came after a report that a bank was forcing dairy farms into the arms of receivers in South Canterbury, although the report did not give details of the bank or the farms involved.

He told reporters in Parliament the longer term view was that consumer demand in China for dairy products was strong despite the recent stock market slump, "but in the short term it might be a bit softer."

He agreed a payout of as low as NZ$2.40/kg, which was one scenario suggested last week by BNZ, would be disastrous.

English was then asked if the Government was talking to banks to 'go easy' on indebted dairy farmers.

"It's a topic that we've been discussing and the Reserve Bank is certainly discussing it because of their interest in financial stability," English said.

"So they'll be looking with the banks fairly closely into just where the dairy debt lies. And it's a relatively small number of dairy farms that have high levels of debt. So the indications are the banks are certainly going to be helping fund a lot of farmers through this next season because their cost of production could be higher than their revenue," he said.

"And then there will be a minority for whom there is some real pressure, because they were over-extended on debt."

English said banks had been careful in the last downturn in 2008 and 2009 "because they understand that if they push too hard they could create a broader problem by pushing land prices down if they try to sell too many farms."

"All the indications are they understand the scale of the problem and they are going to be pretty considered in how they deal with it," he said.

Key confident of long term for dairy

Prime Minister John Key was more upbeat on the outlook for dairy.

He said Fonterra's expectation was that dairy prices may come down "a little bit more."

"But overall I still stand by the way that you will continue to see exchange rate adjustments if that's the case, but the long-term outlook's pretty strong," he said.

"At the highs and lows it always seems pretty extreme - the question is what do the long-term fundamentals look like and generally they still look pretty good for dairy.

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?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

129 Comments

LOL - Finance Minister warns banks.

Is he proclaiming SCF mark 2?

Lets not drive farm prices lower but lets try to drive house prices (in Akl) lower - where is the justice?

14
up

Methinks this is going to turn very, very nasty - throw in a very likely El Nino driven generalized drought layered on the existing East coast drought and you have a recipe for a dairying bloodbath (and maybe even a full blown run on the NZ$).

I must admit that English's comments make little sense - aren't National the party of 'the market is always right'? If there is a glut in dairy produce while the farmland used to produce said glut is chronically over valued then surely the market must be allowed to act - and topple the price of the farmland? Or do National only believe in 'the market' as long as it does not hurt their biggest backers?
I suspect National will have a bit of explaining to do if a collapse in dairy farm prices allied to a dramatic fall in the NZ$ allows Johnny foreigner to scoop up NZ most productive farming land for peanuts - but that will be their precious market working, will it not?

16
up

The only free market that these neoliberal charlatans believe in is a free labour market.

free and cheap.

13
up

Wasn't it Bill English who said low wages in New Zealand are a competitive advantage over the Australians?

Other NZers low wages, or immigrants who are even cheaper.

Got to wonder why NZers seem happy to left this stuff go....I suppose enough dont care as long as it isnt them.

21
up

Middle class professional New Zealand doesn't care. They are happy to take advantage of cheap consumer goods from China and cheap services from less privileged Kiwis. Its all the same to them. They take the savings and invest in the housing market to double their money. Good times.

Unless you have principles and actually care about anything else than your own bank balance.

I think there is a pretty clear case this is the case.

dp

agree

dp

So the chief gamblers/porkers are now beginning to see their next election win unwind as their own stupidity, dogma and denial starts to bite them and their core constituents. Meanwhile a drought will be so "unexpected" despite climate change saying otherwise that the tax payer will be asked to bail farmers out with ever more frequency, bye bye swing voter as well? can but hope, oh wait labour is no better....

"I must admit that English's comments make little sense" of course it doesnt, it only makes sense when the poor or those with no clout are the ones paying ie ppl who wont be voting National. So, yes "it does not hurt their biggest backers" or them is the order of the day.

The thing is the farming land will be worth less but will also not pay more anyway. However with huge amounts of funny money wandering about, yes I expect we'll see great swaths of our land/farms sold off by banks and Govns desperate to stay solvent.

I just wish the impacts were limited to the stupids who over paid for the farms and their puppets, sadly i expect I will be carrying part of that bill, and my kids.

14
up

Raising the stakes to double or nothing? Capitalise first year losses and hope that there aren't 3+ years of payouts below break even?

Can we look forward to National asking the banks not to sell Auckland houses if prices fall? Reminds me of Government intervention in the Chinese stock market at the moment.

Agreed. Charles Hugh Smith on why it won't work:

http://www.oftwominds.com/blogjuly15/authorities-market7-15.html

Modern capitalism / economic liberalism at its best: no, no, when things come unstuck then forget about market forces weeding out farmers who have overdone it. Anyone in for a taxpayer bail-out, btw?

Btw, the banks WERE sitting on houses to dampen the last slide in real estate.

Are we living in a free market economy or is this already a centrally planned Commie outlet? And where is the "New Zealand Initiative" crying foul over markets being restrained by government as they do for their Chinese clients?

Didn't you get the memo PeterPen, we do live in the People's Republic of New Zealand. Documents have been leaked to Radio New Zealand about reforms to the Health System, among which touts the possibility of replacing elected boardmembers of the District Health Boards with appointed commissioners.

"The Prime Minister has poured cold water on a Health Ministry proposal to take power away from elected District Health Boards and give greater control to the ministry.

Leaked document suggests removing the control of District Health Boards from elected representatives in a proposed overhaul of their governance structure."

A reprise of 2009 when the government was ambushed by the media about a similar restructuring of the Health System.

No, I am not yet on John Key's mailing list :-) ... but working on it with my insolent comments here.

The problem with weeding out is the scale of it and then the leverage of the lender. So when lots of farmers (or anything else) have rushed into a well paying market, we get over-capacity and price falls. then the leverage of the banks comes into play and of F....insolvent banks, pensions losing shed loads of value and haircuts left right and centre.

This just seems to repeat time after time just go back 5? years on grapes I think the payout has dropped 4 fold since then?, olives? now dairy seems probable, yet who takes the losses?

The other problem is increasing demand/price volatility means you need to be more resilience, yet to meet costs you need more efficiency which is the anathema of resilience.

Key: "... the long-term outlook's pretty strong,..."
Are there any projections out there which can be put to scrutiny... or is Key making it up?

13
up

C'mon Ytel - its his job - "if nothing else works, a total pig-headed unwillingness to look facts in the face will see us through." (to quote Melchett)

Chinese will be ready and waiting to buy up NZ farms for a song to feed their exponentially growing Nation and cut hard working Kiwis out by also buying all the related businesses - the end of our culture. Check out 20/20 last night and whats happening to fellow Ausi farmers.

So they buy a farm and then have to manage it and make a return. The Q will be then whether we accept the foreign owners importing their own staff and managers.

For me I suspect that we will get to the stage that china will be in such a desperate state that they wont be buying the output. The problem I see will be stopping and sending the staff and probably the owners home back to china as they will not want to go.

16
up

..don't forget about the cashed up New Zealanders..sitting waiting in the wings..there are quite a few out there..
many of us have been waiting for a while for land prices to reset..
Plenty of old age pensioners with money in the bank earning SFA after tax..scared of finance companies..we could do this if given the chance.
The Crafer farms were a prime example of what shouldn't have happened..those farms should have been split up..back to their original entities..and sold to new entrants....history shows this didn't happen..the bank(s) fought to preserve their liability and aided and abetted by Landcorp were able to avoid the reset button..(Landcorp was supposed to be there as a model to help new farmers when in fact it is the exact opposite)..the longer we avoid the medicine the harsher it will be

Don m - well done, an insightful posting amongst a sea of Chinese conspiracy theory postings from the same of old names. Likewise I'm aware of a large number of well cashed up NZ dairy farmers looking for opportunities and getting increasingly frustrated that they haven't come yet. The banks will support 99% of the industry through this crisis period, and the 1% that don't make it won't come as a surprise to those cashed up ones.

Naturally we have our own local breed of vultures circling to pick at the remains of the working lives of our farmers. They should be ashamed of themselves.

10
up

Not vultures at all..Just those more prudent than some whose ability to borrow was greater than their ability to farm.
Those who based purchasing decisions on a sound business plan...and waited...
as opposed to some who bought the neighbours because the could rather than that they should..
If we had taken our medicine in2008 then there would be a lot less farmers flying close to the breeze today..

Its always the case - I got shot down on this site when I complained about old money farmers buying more land but spending SFA on sorting out the environmental aspects of the land they had already and then expecting the government to do all the hard yards which includes watering down the requirements and putting pressure on the scientists who complained.

you're assuming its purely the old farmers. The burden is likely going to fall most heavily on the young and inexperienced just starting out in their careers. They're likely to spend the rest of their lives working for old timers who had the good fortune to get out just in the nick of time and a bunch of big city lawyers and accountants who only see dollars and cents.

". They're likely to spend the rest of their lives working for old timers who had the good fortune to get out just in the nick of time and a bunch of big city lawyers and accountants who only see dollars and cents."
..dunno. maybe it wasn't luck the old timers that got out..maybe they were smart..
your romantic idea of an ideal farm is not so common any more..
due to the size of the debt farming is big business ..where dollars and cents matter..sorry to say
in the past if land prices overshot then there would be a pause while inflation re adjusted things..
however prices are currently way past their economic level and in a low inflation environment.. the debt will stay

Is that a serious comment Anarkist ? what do you expect should happen, the tax payer bail them out instead ?

quelle surprise Grant A. Perhaps I am and you can be assured this is how farmers would feel at the prospect of losing their lands to vulture capitalists taking advantage of their distress. In the 1930s and again in the 1980s farmers used threats and force to ensure there were no bidders at penny auctions.

Perhaps I am

Surely u are not... U would want the taxpayer to bail an indebted farmer out..???
Vulture Capitalists...???

Anyone gambling foolishly at TAB should not be surprised when they walk out the door penniless. Ditto anyone gambling on a tax free return on retirement, simple greed.

Anarkist ..The difference between now and the 80,s is that in the 80,s farmers had low prices(smp,s were gone)mod debt but exteemely high interest rates..
now farmers are struggling due to low prices but have massive debt and record low interest rates..
unless prices improve there is no where to turn..
few currently would deny that the medicine that was taken in the 80,s while painful ultimately help us in subsequent years..

Only thing is, cashed up individual/aspirant NZ bidders have to compete with corporate money coming in from ZIRP/NIRP economies.

Couldn't agree more on what should have happened with respect to the Crafar farms - but it didn't happen then and I don't see that anything has changed (policy setting wise) to mean it (large parcel preferences by receivers and security holders) won't happen again.

16
up

So financial stability means buy in the highs and Nanny will take care of you in the lows!!!! Well how about Nanny collecting her own taxes at her own cost then Billy you Nanny???

Billy E....sod you!... I'm stuck in my office today doing shitty, forced, slavery, compliance jobs and so forgive me for being on the pissed off side of business today....but screw you - why should the free market not apply to everyone?? Discrimination disguised as financial stability is bollocks!!! A handful of cow cockies who paid too much isn't going to cause financial instability it will cause the transfer of an asset which hopefully gets set at the correct pricing level of that asset!!!!

You have got goods and services deflating worldwide it is going to affect some asset prices at some stage - so leave well alone.....and let the market find it's natural pricing level!!!

They cheered the industry up "Dairy to double by lunchtime" and now when its hitting the fan suggest that market forces back off. Suggest Billy Boy has been up in Beijing too long where a similar bubble in the stock market is trying to be held up by the govt (actually the main support was for the blue blue chips largely controlled by the ruling mafioso families - Communism anyone?) - that's not turning out well.
Banks head offices in Oz not that friendly - http://www.queenslandcountrylife.com.au/news/agriculture/general/news/wa...

Too big to fail reloaded. We really have learnt a lot from the last bang-up, namely to get into debt a lot more and to simply keep doing the same old nonsense and to expect different outcomes. How smart we are, and particularly "economists" like Bernard Hickey and his mentor in spirit Paul Krugman.

Wait until the negative vibes feed into the general population or until the proverbial Chinese start selling up to stuff the hole in their stock portfolio. Then we are back in 2007. 8 years of going backwards and learning nothing.

LOL. While I find myself almost totally agreeing with you. I find it ironic however that the free choice that was allowed in taking on such debt will when it implodes impact the likes of me as an innocent 3rd party.

So in terms of " let the market find it's natural pricing level" what about the impact of such losses on "me"? ie if ppl had paid with their own cash then that is their total loss, but they did not they borrowed and they were lent to foolishly and that will impact the innocents. My worry is that a) we'll see banks go insolvent and close. The losses suffered will be huge in terms of savings and pensions. b) Worse though, we need to keep the economy going as it all hinges on electronic banking transfers. I mean without a working eftpos/CC its rather hard to get food and petrol, cash? well OK but just look at Greece as an example of limits to $60 cash a day. At the same time it is then even harder for Pak-n-save to buy in food in wholesale to sell it to us. Then even once they have bought food in bulk how does it get transported? The trucking companies dealing in huge wads of cash? What about the petrol companies paying for petrol to be shipped from Singapore?

Hence really the OBR. The interesting thing is why was such a policy put in play to meet what publicly seems to be such an extreme and unlikely event unless there is a real possibility of such an event occuring and that the RB (and indeed our Govn) see's it as a real possibility.

In terms of GST you complain about (I assume), well that is a cost of doing business but personally I think GST should be got rid of and the equiv tax collected by other means such as a land tax via rates.

The Australian owned Banks competed fiercely to lend to Dairy Farms, (some banks even more foolishly and desperately than others) to obtain "market-share" of the "Goldmine" across the Tasman.
Based on the economic farming experience of 'boom and bust' years, one would also expect the lenders to have 'put aside' a good percentage of the massive years of profits earned from Kiwi dairy farmers?
I feel some issues seem pretty clear around the latest dairy 'boom and bust.'
1. JK, BE, SJoyce, and the rest of the "top Brass" ably assisted by an incompetent Treasury and Ministries, have left us in no doubt that you cannot GOVERN a country responsibly without:

(a) Sound, responsible, financial/ skills,(not to be confused with the risks taken with someone else's money by financial traders i.e Ireland, Spain, Greece, Portugal, Italy etc)

(b) attention to innovation, (not eggs all in one basket)

(c) A professional Treasury with members who have the vision, experience to read history, and who are
Are able to 'resist' the zeitgeist of the party "Fat Controllers" and 'steer the financial ship ' with wisdom and required caution.

(d) A strong, functioning, enquiring Fourth Estate that has the energy, conscientiousness and sense of
duty to cover every aspect of their topic with courage and without fear of retribution.
When our journalists, commentators and other professional financial / economic/ political/ geo-political
writers/media hosts are either shut down, squeezed out, or reduced to sycophantic drivel, through
the pressure of the Corporate Advertisers and their wilful blindness and adherence to "Club"
Nepotism, it is guaranteed to shut down any useful considered financial/economic/political
Debate in MSM.

2. New Zealand's present 'economic/monetary' dilemma needs to be viewed in the light of much of the above. As has been pointed out on these pages previously, it was very clear 18 months and more ago, from the geopolitical machinations of USA and the sanctions applied to Russia ( and condoned by Frau Merkel) that our dairy farmers were 'in trouble' back then.
Instead of 'steering our own trade ship' JK 'doffed his cap' to Club leader Obama, and insisted we pull out of what may have been a lucrative alternative market for our dairy producers.
JK seems willing to continue the bowing and scraping to stay "in the Club," hence the willingness to push through TPP.
Our economy and export markets appear to be completely forsaken in order to support USA and their multinational corporations to "beat" China for the spoils of the South Pacific.

To hear the Minister of Everything confuse reality as "talking the economy down," and BE conceding (that there may indeed need be to be some "market intervention" to put our National/Labour Free Market, Chicago School of Economics, Ship back in sailing order,) smacks of an underlying desperation.
However, the "Show must Go On" so for those who are still in the comfortable financial position of requiring more of JK's entertainment and fairy tales, our Dear Leader will continue to fulfil the role of "Ringmaster" with his fatuous, facile, smug Spin.

The goose has truly been cooked and eaten ?

24
up

I'm still waiting for the headline where English warns banks from lending irresponsible and causing prices to spiral up.

hahahahaha

Dairy and Banking are both TBTF in NZ. Will be interesting to see who wins this Clash of the Titans.

For good reason SmoKey. I reckon the Reserve Bank and the heads of the various banks have had a good sit down with our Finance Minister and told him in no uncertain terms how precarious the situation is. I'd say Bill English has been suffering a bit of leakage recently. The risks are no longer contained purely in those parties involved in the business transactions. I can't be sure, but it does seem likely that the banks are not the only ones to hold the farm debt. New Zealand banks have started following the international trend of financial securitization, where they bundle up a tranche of loans and sell them to the money markets. I can't find any information about the degree to which this practice is happening in the farming industry, but it would seem plausible that the banks would find it prudent to distribute the risk across the financial system rather than have it fall purely upon themselves.

So they could be in the hands of your Kiwi Saver accounts, your insurance company, on corporate balance sheets, on the books of Finance Companies, in the SuperFund. The problem is its all financed on a short term basis and can be withdrawn on demand. The banks nor the government can afford an investor panic, so its English's job to reassure these investors he has it all under control to stop the herd from bolting, otherwise all hell will break lose. This is why the US government forced the banks to put the toxic assets back on their balance sheets, because it allowed them to contain the problem. Sure a couple of companies failed, but they had to isolate the fire/plague whatever metaphor you prefer.

"anks in Australia are quickly catching up, playing a major part in the rapidly growing securitisation market in that country. In New Zealand, a number of securitisations involving banks have taken place, although in most cases banks have not securitised their own assets. Their involvement has been related to assisting third parties to securitise assets. From our perspective at the Reserve Bank, interest by New Zealand banks in securitisation has increased markedly over the past year, and if overseas trends are followed we can expect securitisation to become increasingly important in the future."
http://www.rbnz.govt.nz/research_and_publications/speeches/1998/0060353....

Wonder how much of the overseas interests (apart from the banks here which are owned by the Aussies anyway) are tied up in this securitisation and what influence/pressure they will bring on the government to come to the rescue again. Securitisation and on selling bank debt to gullible investors was the prime cause of the last GFC in 2008, not in the distant past, just 7 years ago.

Its not just overseas interests SmoKey. Local big law and accountancy firms are involved in the schemes in a big way. Chapman Tripp, Bell Gully, and Russell MvVeagh.

http://us.practicallaw.com/0-501-1673?q=&qp=&qo=&qe=

21
up

The farmers willingly entered the dairying business. The banks willingly lent them the money.

Both parties made a judgement call that they were on to a good thing. Indeed they persuaded the government that they had found seams of gold that would last for years - that they could double agricultural exports by 2025. A compliant government sacked an elected environmental council and put its own flunkeys in place to help them on their way. It has pushed for irrigation wherever they thought they could add more cows, no matter the ecology.

A helpful new fresh water accord has ensured the environmental consequences would be overlooked. Where the cadmium level in the soil has reached troubling levels, as in the Waikato, they've obligingly stopped measuring it. The future health of the MacKenzie country and other unsuitable dairying areas, and rivers and lakes up and down the country have been mortgaged to this business fantasy.

Well, the business judgement was wrong. And in free markets getting a business judgement wrong usually has simple business consequences.

It's not that the country can't afford to let the banks and their dairy farming clients lose a little money. It's that we can't afford to prop up their combined financial fantasy. Our future can't sustain it.

Free markets are - or should be - one of the the bases of a free world. They involve individual responsibility and accountability. When one business goes under it makes space for something else. Maybe there are better, higher value, less debt-intensive, less environmentally destructive uses of our land? To take just one example, tourism is now a larger industry than dairying. And tourists don't come here to slither round in effluent.

"And tourists don't come here to slither round in effluent."
well not all tourists are created equal..
many we see out here in the country(not your Queenstown/ Rotorua types...hire and live in a renta dent van..live on 2minute noodles and shit and drop rubbish in every rest area they camp in..not exactly a benefit to the economy on the whole

entered dairy business and got lumped with huge debt and then couldn't afford to exit. (bankruptcy taking any backers or connected funds with them).

that debt then becomes the controller. Fonterra changes rules? Then the farmers and sharemilkers have the debt-gun to their head and are -forced- to "agree" to any contract changes. The "debt-gun" is legally recognised (although not by that name). financial burden and commitments _are_ recognised as undue pressure for contracts in NZ, although usually such urban luxuries are not extended to farmers, sharemilkers, or the self-employed. Because government.

Government changes rules? MBIE etc have fat salaries and don't care (or understand) that it could be possible Gross Revenue simply doesn't existed for funding the changes - to them getting the cheap options out of hte way for rich corporates is a _good_ thing!!!!!!!!!!!!!!!!

And no it wasn't the farmers that "persuaded the government" about seams of gold.
Most _hands_on_ farmers insisted that the price was unsustainable and "yet-another-peak" and the Fonterra was overcommitted and should cut leverage due to upcoming [always occuring] post-peak collapse*. But that opinion doesn't fluff big salaries and bonus, and doesn't make good media sales.
So the _actual_ farmers were ignored [again] while everyone else ran around listening to what ever story polished their warratah

* check the historic figures. Every peak farmgate price always has a following year significant drop. Normally it's shortages pushing up demand (eg drought, flood) then the US or other country boosts output. the flood/drought/etc passes supply and prices drop to normal, and then the increased supply from the high price time also comes in flooding the supply past the steady supply price.
Result: banks, media, politicians ran around flapping beaks and wings like this has never happened before. "who could have predicted it they keep saying".....and they wonder why we don't respect their degrees and positions.

10
up

"Free markets are - or should be - one of the the bases of a free world. They involve individual responsibility and accountability"

Tui billboard.
That may be nice in theory, but that's not how the 'free' market has been working - and "personal responsibility"?
I hear this most form people who practice it the least. Those who use this phrase seem to mean by it "I look after my own interests only", not "I realise what the consequences of my actions are, how they affect the world around me, and take full responsibility to either prevent or mitigate those consequences"
.

So you hear it most from politicians and bureaucrats then DFTBA?? They are the ones who interfere in the free markets!!!

I agree with you on that one notaneconomist. Politicians and bureaucrats merely suffer a temporary reshuffling to do damage elsewhere, while those they advised or coerced bear the consequences.

Ah - but you conveniently omit to mention why they interfere...and increasingly this is not to protect the consumer or society, or country.
It's to protect those large corporations who've generously contributed to the party coffers....or it's to protect a certain part of the electorate they rely on to get re-elected.
.
Interfering in the free markets should be done, fee market ideology is severely flawed (compassion, decency and respect are NOT the lowest common denominator, unfortunately), but it should be done on behalf of the weakest of society, not the strongest.
.
And I hear the personal responsibility phrase bandied about most by people who are nats voters, or at least 'conservative' in their thinking.

DFTBA - we do not have a FREE MARKET.......so quite why you blame the free market for all the problems is beyond me!!!

What really agitates me the most about your comment is the fact that you seem to conveniently be over-looking the fact that NZ'ers are an incredibly generous bunch who donate large sums of money and time towards looking after the weakest in our society because they see the failures of the system....so don't go giving me the spiel that interference is justified when in fact the interference does not deliver anything of value to anyone especially the vulnerable people!!

You appear to have conveniently forgotten that NZ is a young country many of us have our roots back to early settlers.....don't go knocking the crap out of the number 8 wire mindset the country was built on it......it is people who are destroying that mindset by manipulating the weakest into thinking there is something better for them...the irony is the weakest don't ever become less in numbers they become more......destructing the free market allows crony capitalists and fascists and obviously you think that is OK!!.

No, you're right, we don't have a free market. That's to say, markets are left alone to cream off all the profit, but losses are picked up by government/tax payers.
.
"Donating large sums of money and time towards looking after the weakest in society" is a symptom of an ailing government. Social services should be provided by a government: it's their JOB.
The mere fact that charity is needed should set alarm bells ringing: a laissez-faire approach to economics/markets only serves to exacerbate existing inequalities in a society.
.
And your last paragraph boggles the mind:
not sure what you mean by your first phrase....do you mean because you can trace back your ancestry to early settlers you're somehow better? Please elucidate.
Second phrase: manipulating the weakest into thinking there is something better for them.
So - the weak/poor should just give up and accept their lot, is that it? Oh, and the massive amounts of money and time you give them - yeah, they should be able to get by on that and stop complaining already. Bit of personal responsibility wouldn't go amiss here, hm?
And how the weak are becoming more in number, instead of less...you find that ironic? Actually, it s me who should find your point of view ironic, giving you're the adherent of a market ideology which is proven to enrich the rich and make the poor even poorer.
Destroying the free market (what? I thought we didn't have any of those) allows crony capitalism (LOL - have you had a look around you, recently? No corporation pays tax if they can avoid it, and look at all former Nats and Act ministers...where are they now? Cushy jobs with foreign banks? Gasp - surely not), and fascists ( you mean police raids ordered by politicians on journalists who dare to expose the underbelly of NZ politics? Oh...wait....).
.
Go home, notaneconomist, you're drunk.

Well said DFTBA

notaneconomist, DFTBA, Making ad hominem attacks on one another is no way to engage in a civil and fruitful discussion on such an important discussion as this. As a Generation Y I am distressed how people are still fighting yesterday's battles and employing outdated, antiquated ideologies. This is the 21st Century for goodness sake. Laissez faire and "socialism" are mirror images of one another. Both are abstract, ideals of how society should be organized and arose due to a very specific set of social, political, and economic conditions.

Historically there have been four primary forms of social organization, bureaucracy, feudalism, communism, and the market. These social forms have coexisted side by side throughout history, though different ages have been defined by the relative level of dominance which a particular form of organization has achieved.

During the Roman era, bureaucracy was preeminent, because the administration of such an expanse of land and the diversity of different cultures, religions, and ethnicities was an incredibly complex task and required an army of professional bureaucrats to manage. Feudalism coexisted with bureaucracy in Rome under the system of patronage and client (clientala), a relationship defined by mutual, reciprocal obligation. Market relations were important in Roman times, but were subordinated to the needs of the Empire and the patronage system. By the time of the Gracchi brothers, the patrician class had essentially eradicated the remnants of communism by expropriating the lands of the common folk.

The chaos which was caused by the barbarian invasions and the end of the Western Roman empire disrupted the communication and transport links across Europe and Asia, also led to the dismantlement of the Roman bureaucracy. These isolated populations resorted to feudalism, which was derived from a mix of the Roman patronage system and Germanic system of hereditary, tribal hierarchy. Market relations coexisted throughout the medieval era in various degrees of relative importance depending upon the quality of transport and communication infrastructure, in order to dispose of agricultural surplus and gain access to the increasing range of luxury goods from the East. In England, communism remained an important element in the social fabric, and was composed of a web of customary privileges, relationships, and social practices.

The exploitation of carbon based energy sources (peat, coal, oil, and gas) allowed the decentralization and wide distribution of material production and industry and allowed a market based social organization to gain ascendance, with a political system which retained vestigial remnants of both bureaucracy and feudalism. What may surprise many, is that Britain had by far the largest and most efficient bureaucracy during what many regard as an era dominated by Laissez faire economics. Its primary role was to collect taxes to fund its military expenditure and administer the legal system required by the capitalist market economy. The age of "Leaissez Faire" saw a predatory social class (aristocracy) expropriate the lands of the common folk and thereby extinguishing a social system defined by mutual aid and cooperation, through the wielding of the powers of the State, just like during the Roman era. This created a huge body of people without the means to provide for themselves and led to the emergence of a distinct social class who without land of their own had to resort to offering their labour to those who owned the means of production (credit/money, industrial machinery, land)

Naturally this inexorably led to the development of a modern form of social organization, which was a fusion of the market, bureaucracy, and communism in varying degrees. In the West we had social democracy, in Germany we had National Socialism, and in Eastern Europe we had the Soviet Union.

Capitalism which prevailed during the early modern era, until World War I was an intermediate stage between feudalism and socialism. The end of the Fordist industrial system in the 1970s and the dismantlement of the implicit social contract between Capital and Labour, which was sealed in the wake of the Great Depression and World War II has led to a reprise of Capitalism. Neoliberalism is its modern incarnation. Its basically a political arrangement which employs a powerful bureaucracy to subordinate all social action to commercial imperatives.

While the old are immersed in the battles from a bygone era you guys don't appear to have realized the world has passed you by. It's tantamount to the Japanese soldiers stationed on isolated islands in the Pacific who had been leap frogged by the Americans, remained at their post 30 years after the war had ended.

At least in the War, there were clearly defined lines of battle, objectives, and rules of engagement. With politics such things are vastly more fluid. Enemies today, become friends as conditions and circumstances change. Victims and beneficiaries are often hard to identify. The only similarity is both the potential rewards and costs are tremendous.

Absoluetly dead right Workingman !

And during that process of 'more and more at higher and higher prices', those who dared utter words of caution or concern for our economy and environment, were brushed aside as 'wowsers'!

Well, they are about to get the mother of all reality checks and they will still have the gaul to ask the rest of the country to be 'understanding' !

During all this TPP will be signed and our sovereignty gone for good! We've been told the same old lies and branded 'wowsers' yet again !

glad you have lots of thumbs ups! why should the price of dairy land not go down - if it is no longer generating the high income and returns then its value should naturally be less - and not kept artificially high - those farms that used the record high payouts to pay down debt , and save for a rainy day will survive - those that did not and sucked their profits out or just overextended to own more land will be forced to sell

Every bubble bursts --- and many of these dairy farms are marginal ex sheep and beef farms - as you state that were altered in the pursuit of $8 a kilogram payouts

Next stop Auckland housing - an even bigger bubble that wont so much pop but explode!

Because actually using farmland to raise food is so passe these days. Far better to buy the land employ the practice of hypothecation where you pledge the mortgage on the farm as collateral to a bank, hedge fund, or a shadow banking institution and gear up on credit to invest in some other profitable speculative activity.

Excellent comment. Please also send it to the New Zealand Initiative, plus the governments of Greece, France and Italy. Throw in the ECB, EU, IMF, OECD, and Barack Obama.

The world is being lead by a bunch of pampered idiots who have never done real work in their life and have zero notion of "responsibility and accountability.

10
up

I mentioned this elsewhere at Interest. My rural manager has already been moved off the dairy portfolio. We all know whats next. That was good guy. Bad guy is getting his/her feet under the table as we speak. Eeny meany mynee mo....who will be the first to go.... I dont say this lightly or to hurt. Been in a similar position 20 years ago. Yes if only back in 2008 to 10 they had come clean most would have been better off to handle it now. Now a bigger vacuum ahead. Likely this will affect some grazers badly also. Many rely totally on the monthly cheque and will find it very difficult managing cashflow without it.

I am genuinely sorry for farmers Belle, you guys have been lead to the slaughter. I have a childhood friend who has a young wife and a toddler and I fear for him with the farm industry's dismal prospects. These clowns in government and Fonterra need to be held to account for providing such moronic advice to farmers and they're the ones who will not suffer the consequences.

btw have you heard this from the ag consultant Alison Dewes?

http://www.radionz.co.nz/national/programmes/ninetonoon/audio/201756343/...

Thanks anarchist I will have a listen later. She was pretty stark last time I heard her discuss the farms she knows. Which is typically high input aka the whole waikato. Up until about 12 months ago Fonterras catchcry was lift production 4% a year guys, we need it,we need it all. Sigh

That Dewes piece is a gem, thank you Anarkist. I recommend others to listen to it, most strongly. A quick perusal of her CV suggests she is more than well qualified to talk on the subject.

In some ways I am sorry, on the other this is risk they took on and millions of $debt to do it. Seen the same in olives, grapes etc. It seems fools rush in thinking they will make a good living and retire with a tax free lump sum and lose the risk assessment as "its never going to happen".

What really worries me is who will be picking up the bill? why quite probably the tax payer ie me and probably the term depositor and yet we had no say in this stupidity. It was a case of 'we know what we are doing" in Govn, banking and businesses, yeah right.....

A cynic (or realist) would say that the Open Bank Resolution policy was enacted to deal with just that sort of emerging problem - if the bill gets too big for one of the Aussie banks then it will be handed over to their customers.

Privatise the profits and socialise the losses - surely you know how this works by now?

I fully believe the OBR was put I place for something like this myself, 100% sure. Actually the OBR is that is the opposite, ie the OBR protects the tax payer who is the innocent from having to pay the bill, so no not socialise the losses.

Also the customers of the bank are 2 parts, the chequeing and the lending, so the chequeing stays functional in an OBR event so those customers get to eat and SMEs etc stay afloat while the lending and the ppl profiting from it ie the depositors and shareholders eat the impact which is how it should be IMHO.

Partly steven, but it also gave the banks access to cheaper capital, by allowing them to sell covered bonds to primarily European investors who are aggrieved by low interest rates back home.

"What essentially happens is this: a bank borrows money from a bond-holder and the bank covers that loan by ‘ring-fencing’ certain assets (usually a group of mortgages that are assets of the bank). The upshot is that you, as a term deposit holder, can no longer access those assets in a crisis; someone else just stepped in front of you in the queue.

Why would a bank do this? Simple, really – they have been offering these expensive term deposit rates to attract your money, but banks make profits because the rate they borrow money at is lower than the rate they lend at. Covered bonds allow banks to borrow money at much lower rates than term deposits. But the reason they can do that is because they push the risk of the borrowing onto term deposit holders by covering the bond and removing assets from a deposit holders reach."
http://www.gmi.co.nz/news/1453/term-deposits-buyer-beware-a-haircut.aspx

"in front of you in the queue" yes but I/we know this it is up front and in the open.

Are you really supporting the moral hazard of a risk free investment? if so how can you justify such a position?

No I do not agree, the risk has not changed for the NZ depositor arguably it is less as NZ banks are more likely to get affordable funding, what has increased is the impact if there is such an event. The amount ring fenced is also limited to 10%? ergo most of the banks investors are still at risk.

gmi, indeed, "The message they are sending is loud and clear – buyer beware. If you invest in a bank, then you take the risk – don’t expect the taxpayer to step in and bail you out."
and I see this as reasonable and fair myself.

There were plenty of banking failures in the US during the GFC and in all cases the banking services stayed functional (generally with one weekend outage) while bank ownership passed to a more viable bank. Of course this requires a more active banking oversight and regulation than is evident in NZ.

OBR as implemented is a travesty. All the covered bonds available only to non New Zealanders are pre ring fenced into a 'good' bank situation and not subject to the OBR. Any one of the 150,000 performing collateralised residential mortgages which become non-performing get moved into the 'bad' bank prior to OBR implementation. The 'bad' bank is the one which is the one used by NZ depositers and subject to OBR.

The shareholders in the parent Australian banks are unlikely to suffer greatly, while the NZ depositors get the haircut to keep their banks in operation.

Proof please? Actually from my view there were no real chequeing bank failures but investment bank failures.
I certianly dont agree on the oversight and regulation, try looking up a guy called Black on youtube. Here is one actually, https://www.youtube.com/watch?v=-JBYPcgtnGE

The OBR personally I think is a brilliant solution to moral hazard ie having the innocent tax payer cough up for those taking the risk. You are incorrect on the good bank and bad bank aspect of the OBR from what I can read. For the ring fenced and not ring fenced it is the same bank just 10%? is allowed to be ring fenced the rest is not. As a depositor of course you (not necessarily you) have the freedom to move your money out in good time if you are watching closely, those in the ring fenced pile do not.

There are also NZ shareholders and they will be the ones taking the biggest losses as will the parent as they are shareholders. NZ depositors are profiting so it is entirely reasonable that they have a risk of loss, no one investment should be risk free.

''Proof please? Actually from my view there were no real chequeing bank failures but investment bank failures.''

You are terribly ill-informed Steven, there were hundreds of failures of 'US chequeing banks' as you call them:

https://en.wikipedia.org/wiki/List_of_bank_failures_in_the_United_States...

Some were small, others had assets of billions.

And your views on OBR remain as uninformed as you are on the above (and seem largely based on the fact you have no deposit to risk and so what would you care).

Ah so you cant substantiate your position on the OBR so attack the messenger? Also from your comment it seems you are a depositor? and hence a vested interest. Where I am not and hence hold no vested interest. As an argument it looks like utter failure on your part.

ie even if you are correct on banks point, it does not prove with my view on the OBR as being incorrect.

Interesting, on the US banks but how many of them were brought down by investments/debt arms of their business? but were viable as chequeing? ie how many are actually investment banks? Like I said I question the real chequeing banks failures v investment bank. In which case the OBR could actually have saved part of them. ie its more "proof" the OBR is needed than not.

.

Go read the list of banks I posted Steven - the vast majority are not merchant banks. You can question it all you like, but I suggest you actually inform yourself. You have a massive vested interest because you are a debt slave (hence your insistent whining to cut interest rates).

The main issue with OBR is that it will bring the entire banking system down. Once people see the first bank taken under OBR they will realise there is no government guarantee (amazingly many people still think there is government support for the banks), and will start withdrawing cash from all the other banks (and sending it to Australia etc). You will get runs on ALL the banks as people try and avoid the strictures of OBR. Which is exactly why none of the other 29 members of the OECD have gone down this route.

It is worth re-reading the Rod Oram analysis of why OBR is inappropriate to the RBNZ's main function to provide stability to the entire NZ financial system. It's moral hazard is that it is likely to bring the entire banking system to a stand-still. There is no country which has chosen this approach other than NZ - and I doubt that anyone involved in the US would have ever promoted anything as unsuitable as OBR. No depositor in the US lost money as a result of the retail banking failures. You seem to delight in promoting a scheme which holds savers - those with money deposited at banks - as being responsible for a bank failure and subject to supporting the bank and the entire banking system. Prudent oversight by the RBNZ could prevent this. (Compare the 100+ banking entities in Australia where the RBA requires $250,000 deposit insurance for each depositor account - including ANZ, Westpac and the other banks which are dominant in NZ)
see the attached link for an analysis of the OBR scheme.

http://www.stuff.co.nz/business/opinion-analysis/8490711/Oram-Reserve-Ba...

You are being very patient with Steven, but I don't think he has the wit to understand Mr Oram's article....

When OBR is eventually used (I have no doubt we will get in a crisis which justifies its use), it will be fun listening to Steven whine as to how the subsequent collapse in our banking system cost him his job etc....

that is why if you have a large deposit you would be best to open an Australian bank account and have it ready to transfer into if NZ banks get in trouble

The RBNZ website shows the nature of the 'good' bank entities set up to protect covered bonds from the OBR - hardly a level playing field. The covered pool assets are owned by entities separate from the bank.
http://www.rbnz.govt.nz/regulation_and_supervision/banks/policy/4430899....

and the Q&A answer the question about non-performing mortgages being moved to the highly leveraged main bank which is supported by the depositors.

Your brilliant solution does indeed introduce a moral hazzard - removing banks and the Reserve Bank from their obligations of looking after their depositors.

OBR is the worst example of pre-positioning the ambulance at the bottom of the cliff - and letting the bank management and the Reserve Bank off the hook - both being protected by the NZ bank depositors.

SPV owns these and not really a good bank, bad bank. Right now of course there is no good or bad at all. I didnt say it was a level playing field and hence there is a limit (10%?) on how much the banks can put in a SPV.

a) The OBR does actually force losses on the banks owners as it removes or makes clear the Government does not have to step in.
b) the RB has no real obligation with depositors anyway? as they are simply investors and in fact the OBR helps make that clear.
c) The bank employees do indeed have no obligation to protect an investor just like a stock broker etc there is no moral duty to do so before and still is not.
d) the obligation with any investor / investment is to look after themselves, failure to do so should indeed be a lesson to learn.
e) The OBR should be making it perfectly clear to depositors that their money really is at rsika nd to act accordingly, no investment should be risk free by someone else wearing the costs.

dp

Here it come 2008 again only much worse.

Transfer food producing and producing land to Govt aka taxpayer to own and lease land to the farmers at a rate that produces cheap food then bankrupt the banks.

Wipe off the diseases of debt that is crippling this nation it's business's and it's people.

Let the free market sort is out does not work look at where nz has gone since 1985 no where but down.

Zero is upon us...

In reality the banks are only the money printing arm of the Govt and under Govt License to create credit/Debit.

Therefore it is quite easy for the Govt to Liquidate the debt now that they don't have inflation to do the job for them any more.

14
up

With the Chinese in play I believe Bill English has got it all wrong. The banks historically have always pulled the plug early on farmers in NZ as soon as there is a protracted downturn looming. This time the difference is the banks will be able to recover their debt quickly without any loss as the Chinese Government has told its people get out there and secure the food supply chain for your Chinese homeland. So expect to see the Chinese take over all the highly geared dairy farms - there are plenty of them. The banks will not hold back and their Aussie owners will not give a toss about the poor old Kiwi farmers. If you watched the Sunday program about the Chinese taking over Aussie farms you would be shocked - the Chinese are buying the farms, processing the products, own the freight trucks and even taking over the port at Townsville all using Chinese imported labour. They have the entire supply chain in their sights. It's not good people but what can Bill English do about it - nothing!

No gumption

Time for the Coup and removal of John Key. Hopefully then PM Bill English will legislate to keep ownership of New Zealand land the exclusive right of citizens.
Otherwise it's a new flag for the land of New Guangzhou

Too late mate. Both political parties have been thoroughly comprised by overseas interests. The Labour Party relaxed the rules governing the investment thresholds which investors have to seek approval of the Overseas Investment Office. The investment must be over $100 before they can intervene.

Shouldn't the bad farmers have been sold up after the gfc , think the banks should wear this one , they have had plenty of time to sort there loan book out ,
Just stop foreigners buying farms and dashed up aucklanders can become the new landed gentry
Can only improve country life

I think the farmers have been attacked from all fronts in the last few years, but history will show who are the real villians. Governments and banks all around the world are working together to strip the assets of the middle classes and fill the pockets of the corporates and super rich. Farmers did'nt orchestrate the dairy boom they were sucked into it by the spin doctors. Everything is going to plan, farming will thrive (corporate and govt. controlled farming that is...). The best thing to do if you are in dairy is kill your cows, and change your farm into a business that has not been so manipulated.

Why did prices go so high anyway , there has been numerous droughts since the the big 08 one was it just a way of keeping debt to equity in order
It's not as tho every farm was sold to a higher paying farmer or were farmers just losing money every year

In every humane society there are groups who are rightly protected from the consequences of their actions - the juvenile, the mentally unwell, the otherwise incompetent.

Well, lo and behold, we now see the government seeking to have the dairy industry and its bankers included in the same category.

In the past if the price of a commodity dropped, the country would cut production of that commodity. Will that happen? or will the farms be sold to the ones who are buying it, so they can keep cranking production of low cost milk. Resulting in smaller farmers going out of business, ( even if they have no debt). I wonder with the new trade agreements being signed whether we will have the right to stop these direct supply chains.

Just look at oil for that example. The US frackers with the more expensive production costs (x2+) assumed Saudi as the swing producer so would cut back their production keeping the price up thus allowing the frackers and "investors' to make a lot of money. When that didnt happen, US speculators, taking heads and the industry blamed the Saudis for the price collapse and losses. We as consumers should be congratulating the Saudis for brining competition to the oil market breaking the greedy ones.

I see nothing wrong with a direct/vertical integration chain within reason anyway. Just who is losing out? NZ consumers? no we are being screwed over by the industry so I for one simply dont care about ppl with an attitude like that.

I think Provincial NZ will lose out Steven. There's not many people in these provincial areas earning $100,000 or more per year, who aren't business owners. If all these multinational suck up these smaller businesses, the towns will suffer. The multinational isn't going to go down to the local shop to get their farm supplies, or use the local carrier, they will cut everybody out. How about the local car dealer selling hundreds of utes to farmers. Do you think the big company will deal with that guy anymore? Will these big companies pay much tax or support the local school? I doubt it.

I think provincial NZ will indeed lose, the profit if nothing else will not be spent in the communities. I have to ask, farmers / rural are big National supporters? doesn't it come across that national isnt doing / wont do much to help?

how will this benefit local consumers of milk and meat, if less of the produce is available locally? What is the market price if you have a foreign company monopolising the industry? I think that it could actually restrict the availablity of produce to NZ, as the big companies drive down produce prices by over producing so that profits are made offshore. We need to support local and small business to have a healthy economy, as oppoosed to a totalitarian state run by corporations.

NZ Consumers already pay the full international market price for milk products? Also producers like Fonterra will still be here even if some farms go off the radar.

Longer term I think we'll see some movement forced on pollies to stop such foreign dealings as NZ consumers scream in pain it will come, jsut how many years away is it.

"We need to support local and small business to have a healthy economy," totally agree, within reason of course. of ocurse no one wants to swap out one over-charger for another, eg 64gb microsd cards, $27US on amazon, here in NZ hard to find the fastest speed and if so $100NZD, ouch. Asus 8 memo tablet to run my chrono, $130US delivered I cant even find one in NZ but it looks like $400NZ+.

Funny that you see what I see ie "a totalitarian state run by corporations." as a here and now and getting worse problem and not a "totalitarian state run by socialists" which is what the right wingers fear in the future.

Fonterra will still be here

There is no guarantee of that steven, if Fonterra gets below it's critical level of milk supply. ;-)

Very true. TAF changed the nature of Fonterra's redemption risk but the the risk nevertheless remained.

TAF always was an answer to the wrong question.

It's all very public now - the vulture funds will be cruising.

New Zealand Farmers See Red With China Buying Less Imported Milk Read more.

This was a very interesting review of what happened to all the household real estate assets that went down with the US sub-prime scandal;

http://www.zerohedge.com/news/2015-07-26/these-13-us-cities-rents-are-sk...

Wall Street became the nation's default landlord - or should I say landlord arising from default.

Why would you buy a farm that is losing money with no sign of an improvement? Unless you can borrow for nothing.

EU production is up

http://www.attenbabler.com/eu-28-milk-production-update-jul-15/

forego the "rent" portion in the business,
then consider leveraged cashflow against alternatives.

It's low yield, overly risky, but it is possible if they want to be without masters.

forego the "rent" portion in the business,
then consider leveraged cashflow against alternatives.

It's low yield, overly risky, but it is possible if they want to be without masters.

absolutely Andrew it's called the liquidity trap. We have a dairy debt problem, dairy crashed... so we lower interest rates which allows people to borrow more for houses.....
It will be very interesting what happens when if the fed try to raise rates in the US.

The other thing that happens in the liquidity trap is that people start to hold money. If interest rates are low house prices for example may be very high (as in Auckland). But if people think that that interest rates will have to rise then you are better to wait to buy. I think this is why there is a lot of fear being spread in the market about buy quick before the "wave of foreign money hits". The Auckland property market will, at some point soon, peak. When it does will the speculators start to sell? Low interest rates carry the implication that there is no risk. Lower rates mean people may borrow more, as with Andrew's article above. But if I have cash in the bank and the bank will lend me the money, I can happily pay an interest rate that is twice as high, but what has to change is that the face value of the property needs to halve. ( which equates to the same amount of interest). This is my feeling with assets like property, the banks and the govt. are running a ponzi scheme with interest rates which has the affect of overvaluing assets, by this reasoning unless you own more than 50% of your house you may in fact have, no equity.
Is it a good time to borrow when interest rates are very low? You might think so, but as Andrew's article above imlplies when rates go back up, asset prices could crash, as alot of people won't be able to afford the interest payments.

If low interest rates are such a big driver of asset prices such as houses, how come they are having no effect on prices in prosperous cities such as Tauranga, Nelson, Hamilton, Napier, Dunedin, Wellington - where people have a good range on incomes and jobs?
There has never been such a disconnect in NZ before.

what makes you think Napier is prosperous at the moment?

good point cowboy, i know someone that lives there and says they have just opened a soup kitchen.

Median household income 55k, 155,000 population in HB, one of the top Ports in NZ etc. however house prices declined in Hastings, Napier house prices up 1.5%.
Not saying it's booming - But my point was that house prices are not being affected by interest rates. They are stagnant. So can you answer my original question?

No migration pressure in th Hawkes Bay

There is a significant growing Indian population in Hastings particularly.

seeing a lot of indians coming in on the restaraunt gig

Median household income 55k ???

Same thing happening in biggest cities in Austrailia and Canada. If you are going to pay top dollar you want thre best real estate, maybe liquidity has something to do with it, will you even be able to sell your house in Dunedin or Nelson if we go into deep recession?

The other thing with the liquidity trap is that if you can borrow money at 1% and rates rise to 2% it has the same effect on interest payments as if rates were 5% and go to 10%.

exactly the game governments have been playing (and so did my ex-wife).

Painfully part is zero isn't a hard bound (as Greece is testing)

And I sometimes wonder why Fonterra is involved in milk production in China...????
Doesn't make any sense to me....
How that helps NZ Farmers get the best price for milk ... is beyond me

Because to get into China you have to play by the Chinese rules and they have made sure they favour there citizens over outsiders. It's a pity our politicians don't learn from them it's called controlling your own destiny

The dairy industry in the last twenty years was built on the dry stock farm price spiral , 100 years of slowly building up farms and then the dairy farmers screw it completely up ,
Maybe time for some orange overalls and a few knighthoods removed

not dairy farmers. and certainly not built on dry stock farms