Guy Trafford laments the state of agricultural training for a backbone sector as another bites the dust, reviews NZ's Brexit risks, and assesses the state of livestock markets in 2019

By Guy Trafford

The agricultural community should be very concerned at the current demise of the Taratahi training institution.

Currently in receivership due to high debts and losing income through falling student enrolments it looks, at least for the Wairarapa component, to be heading down a similar pathway to that which Flock House travelled in 1987 when it was closed as a training institution and eventually sold off. Flock House was a victim of the then recently introduced philosophy of user pays despite the terms of the initial intent which was the land and homestead were gifted to the nation for the training of seamen’s sons (girls didn’t quite feature in agricultural training at that point). It was then used for wider ag training under the MAF, now MPI, before being sold off.

Within the Taratahi Institution those involved with the South Island’s Telford Institution must be feeling particularly frustrated. First the 2011 merger with Lincoln University failed to come close to meeting its goals of increasing the University’s student numbers and making it more financially secure - although the $10 mln transferred from Telford to Lincoln as part of the merger certainly would have provided Lincoln with benefits at Telford’s expense.

With that ‘experiment’ failed Telford then merged with Taratahi in 2017 with Taratahi receiving cash payments as the new tertiary provider of $7.7 mln and a $2 mln payment in compensation for the $10 mln that had previously been swallowed by Lincoln. None of these payments appear to have gone to Telford. It seems, at least in its current guise, that the die is cast for Taratahi and unless ‘new’ funders can be found quickly it is likely to head the way of Flock House.

Telford, however, with a different ownership base for the land, is more secure as a farm as it is in a trust and leased to the training institution. Indications are that SIT are interested in running the training institution and coming in with less seemingly less baggage than either Lincoln and Taratahi there may be a brighter future for Telford.

The question is however, with agriculture the largest export industry in New Zealand, what is wrong with the system that allows the major ag training institutions to be effectively uneconomic, especially at a time when agriculture at all levels is crying out for trained staff?

Part of the issue is the cost of delivery with an applied learning approach, as opposed to a more chalk and talk style, agriculture can be an expensive discipline to resource.

This is compounded at the rural based institutions by having to provide accommodation. If numbers are good then this can be profitable as students are levied for the cost. However, this provides another financial cost to students and a barrier to entry and when numbers are falling this adds additional cost to the institution.

Both Taratahi and Telford have managed to survive for over 50 years, 100 in the case of Taratahi. Along side these Lincoln is still struggling to gain traction with little visible building action happening after the 2011 earthquakes - certainly not the required look to encourage new students.

With the average age of farmers closing in on 60 it is imperative that a positive pathway is there to encourage young folk into farming and with the increasing sophistication that farming requires on all fronts the amount of learning entrants require has lifted, hence more avenues for training are required not less.

Brexit issues for New Zealand

With the Brexit vote now out Theresa May's government has received a major setback and the size of the No vote against accepting her plan must mean the likelihood of any conclusion soon is unlikely. The issue for New Zealand exporters is going to be how border control copes with traffic when the EU rules expire but there is no workable replacement. The new administrative paper work that is going to be required by both exporters (on both sides of the border) and bureaucrats is going to be horrendous. The result may see a lot of New Zealand product being diverted to alternative (non-UK) markets, even at reduced margins if the alternative is border hold up and subsequent reduced shelf life.

For the UK, there are huge range of possible outcomes now that MPs have voted ‘no’ to Mrs May’s Brexit deal – these broadly include no deal, a "managed" no deal, a pivot to a Norway-style relationship, a second referendum, a General Election – or a second vote of some kind, perhaps after a renegotiation phase with Europe. All options appear to have some up and down sides with no one option seeming to have the support over others and, so what is a better show to follow than many soap operas, continues.

MARKETS

The hiatus imposed by the Christmas break has seen little change in the way of livestock markets with mostly small movements both up and down. Where the biggest, and most positive shifts have occurred has been in the international dairy markets. In the meantime rain keeps coming on a regular basis in many areas bringing with it, for sheep farmers, an increased activity from fly and good grass growth to the point of creating complications in how to manage it especially with baleage contractors working all the fine days available but with a major catch-up still ahead.

SHEEP

The lamb schedules have slipped with lamb losing up to $6 per head over the break, however mutton has strengthened slightly and saleyard prices seemingly close to where last year finished and ahead of what the schedule says purchasers should be paying.

WOOL

Just the North Island sale to go by so far and a whisper of a lift. The best news was the low pass-in rate (3.5%) which in the past has been up to 20%, and has clouded what the true price of wool is and likely prevented further falls.

BEEF

Prices for prime and bull meats have had a small lift with cow generally on par with before the break. Saleyard prices are in sellers favour no doubt economics helped by the abundance of feed around the districts. There look to be reasonable margins to be made between weaner and 15 month cattle with up to a $800 differential between the age groups.

VENISON

Excess supply in Europe is being blamed for the falling schedule with prices now $30-$40 behind where they were twelve months ago.

DAIRY

Although a way to go before being reflected in farmers bank balances, the international prices have lifted markedly, with the exception of whole milk powder. This has for New Zealand farmers been helped by the falling dollar which has come back ½c over the last couple of weeks against the US$. The Oceania site on “International Dairy Market News” monitored by interest.co.nz has shown lifts of between 2.8% (WMP) to 18.5% (SMP) in US dollar terms which translate to lifts of 3.6% to 19.4% respectively with the other products falling in between in NZ$s.

Y Lamb

Select chart tabs »
The 'NZ average $/hd' chart will be drawn here.
Loading...
The 'NI avg 17.5kg $/hd' chart will be drawn here.
Loading...
The 'SI avg 17.5kg $/hd' chart will be drawn here.
Loading...

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 or click on the "Register" link below a 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.

14 Comments

I agree - there are issues in agricultural training. However young people go where they perceive the future is brightest for them. At secondary level when science is "hot" in part because of CSI type shows you have to retrench business studies or accounting resources and the same dynamics apply to post secondary funding. Honest hands up - how many farmers in their 40s and 50s are encouraging their kids to pursue agriculture as a career? Apart from more technical or applied fields of agriculture at degree level intensity does campus type learning even achieve the skill development expected?

Where were young farmers trained 30 - 40 years ago?

30 - 40 years ago, it was called, I think or recall, “on the job training.” And there was an abundance of youth more than happy to be outdoors and learning the skills and self reliance that was necessary from those who had had that same experience themselves. The availability of that type of “worker” has diminished relative to the arrival of the age of technology. And to be fair there is nothing wrong, and in fact it is essential, that technology introduces efficiencies and eases work loads, but there are still functions that require dirty hands and bending of the back, down on the farm, so to speak, rather than just watching a computer screen.

I did see a comparison a while back that suggested wages haven't kept up for some of these jobs, thus it's harder to compete when people have other options. E.g. a fruit picking wage in one example was around $25 per hour (inflation adjusted), higher than what's offered today.

So worse pay, and more alternatives.

https://nzfarmsource.co.nz/jobs/vacancy/1534476511

$50,000 starting rate for 50 hours a week = $19.20 per hour. 11 on 3 off. Also give $190 per week back to the farmer in rent. I get we all need to pay for a roof over our head but what a joke that is.

IRD requires all farm staff supplied with a house to pay market rent rates.

https://nzfarmsource.co.nz/jobs/vacancy/1683728616

$50,000 @ 55 hours per week = $17.50 per hour. Sounds thrilling.

Hourly rate for a builder Is $25 per hour and a six month stint at a building course should be enough.
Forty hours a week and beer as a fringe benefit.
Edit...make that a one year construction course...
Edit ...other fringe benefits...coffee...pies..endless use of a cellphone.. non stop banter...sales reps visits...

My understanding is that farm training institutes were a legacy, from the First World War farm cadet system, they learned about cows and sheep and how to grow forage crops.
Modern farm education is chalk, talk and workplace assessment, or its digital equivalent.
I think that is what the aussies do..

The funding model is broken. Training is hands on is sectors like forestry, agriculture, horticulture and especially aboriculture (students are 20m up a tree with a chainsaw). The Wellington based TEC really have no concept of the reality of teaching these things when they allocate funding. The ITOs don't help, they underestimate the theory needed and often don't have a CIFwhat they don't know about education.National had a good go at defunding ag and hort training - alot of really good tutors lost their jobs as a result.The changes have been rewound, but the damage National did is severe. How ironic that Hamish Walker wails about the closure of Telford, when his Government was responsible for it's demise.

Surely agriculture can be competency based, for example, can recognise a cow, locate udder, connect milking machine...
More seriously there are lots of skills based trades but they are handled through a general purpose model, plumbing, automotive, building, ...and they are not all year residential needing a thousand hectares of land.

Nzdan - are you a disillusioned ex farm worker? To go through hundreds of job listings looking for the worst examples? The nature of farming and the scale of the average farm means the hours can be longer and you do work outside regardless of weather but I don't care whether you are a builder a plumber or a farmer you don't create your own business without making the effort. If you want to stay on $17 - $20hr go flip burgers. I have staff under 30 on close to $100k a year and on track to have a million dollar business by 45. There is huge potential in the agriculture industry if you want.

Not at all. I stepped foot on a farm once, but not to do any work. Those were the first examples I found excluding the "price by negotiations", basically the first page.

Good for you, I am so happy to hear you're doing well for yourself. I understand that there's probably a "tough love you start at the bottom" mentality in the industry so sweet as!

Very simply the funding of tertiary education in NZ is stacked against New Zealanders. Limitations on fee increases and underfunding of domestic students means tertiary institutes require money from international students to survive. For each domestic student they take in they run a loss but for each international student they bring in they run a profit. It didn't take long before some in the tertiary education system figured - we tell the kiwi students to piss off and just focus on the international students. If the kiwi student is marginal we fail them and if the international student is marginal we pass them. Getting rid of kiwi students from tertiary education is better for the bottom line profit and that's what it's about at the end of the day. This is why some ITPs no longer go to NZ high schools to recruit students but pay visits to high schools in India and China!!!! Taratahi with a focus on NZ students destined for employment in the primary sector was always going to fail under this model!