Rural sector pulls weight

Waimarino Bulletin, Volume 2, Issue 8, 24 July 1984, Page 14

Rural sector pulls weight

Although New Zealand made sound economic gains from the added overseas exchange earnings from meat and wool last season, many farmers thought that they were at a standstill, or worse, going backwards. This opinion was contained in the annual address of Federated Farmers' acting meat and wool section chairman, Mr Bruee Anderson, in speaking to the section conference in Wellington last Wednesday. He said meat and wool farmers responded to the call for increased production which resulted in increased meat and wool export receipts; rising from $2,293.6 million in 1980 to an, estimated $3,300 million in the current year. Other animal products including hides, skins, casings, pelts etc. have increased approximately 38% from $402.6 million to $555 million in the same period. The nation as a whole benefited from this increase said Mr Anderson. Farmers achieved this by being prepared to accept new on-farm technology methods, borrowing large sums of money and increasing their own debt-servicing. "They find themsejves managing many more stock units, and productivity per labour unit has increased considerably. Where does all this leave the farmer? He finds he has come to a standstill and in some cases going backwards." "So while the nation gains from the added overseas exchange earnings; the

farmer feels frustrated because his profitability continues to be eroded. This acceptance of changed by farmers is not being matched beyond the farm gate." Mr Anderson said meat and wool farmers could be excused for having misgivings about the future of their industry because they saw uncertainty all around them. Mutton was being marketed below the cost of production and was a massive industry debt. The cushion of SMP's may not be there following the snap election. And the snap election itself meantj a delay in the presentation of a budget. It was no wonder farmers were confused, he said. He told delegates he felt farmers should accept the concept of a national pool for meat marketing because he said as far as he could see there was no workable alternative at least none that would return a fair price to the farmer. He hoped thatfarmers' efforts would be directed to ensuring that there was a flexibility in the operation of a national pool to allow maxiumum of private enterprise and expertise, particularly with satisfactory pricing arrangements and buy back provisions. "By instructing and supporting the Meat Board to get on with the job it does not give it an open book. I believe it must bfecome far more accountable and under scrutiny than in the past. This is where our organisation (Federated Farmers) has a very important role to play, in scrutinising the Board 's activities and, where necessary, makingconstructive criticism." Mr Anderson commented on the freezing industry and the fact that killing and freezing charges have increased faster than inflation although it had been a change to have no increase in the last two years, brought about by the price freeze. Some companies though had indicated they were expecting to increase their charges next season. Mr Anderson said the Federation found that quite unacceptable and believed there was an opportunity to significantly reduce costs. On a recent visit to one of the provinces, he was told

that utilisation of killing facilities was 50% on a 120 day loading. "Can we afford this luxury?" Farmers had also been at fault by expecting stock to be killed on demand and if they wanted to reduce costs they might have to accept a lesser service. He also believed that companies had to face up to renegotiating terms of employment with their employees and that this could be difficult, but the problem had to be dealt with. He said wool prices for the year had not come up to expectations and the hoped for market rise above the SMP level had not eventuated. The wool trade was optimistic about the future and was confident there would be a strengthening of the market. "Let's hope it comes sooner rather than later. On today's wool prices, wool is not commanding the value it deserves." He commended the Wool Board on the orderly way it had managed to buy in and dispose of stock piled wools.

It had put money into farmers pockets and carried extra overseas exchange for New Zealand. "I believe there is evidence that members of the wool trade are making a genuine effort to work together in New Zealand. Some companies have merged and others are taking part in joint ventures." "It annoys me to hear people say that our industry is finished. 'Diversify' is the catch word and there is nothing wrong with diversification. I hope that such things as horticulture, deer farming etc do prosper." He said it was well to remember the current export earnings from kiwifruit was only half the receipt from tallow, casings and inedible byproducts. "It is absolutely vital to every New Zealander that our industry survives and prospers. In the foreseeable future there is no other industry that could possibly take its place. We just have to make it work and I am confident of the future," concluded Mr Anderson.