Why this is not the time for govt to be heaping regulatory costs on farmers and requiring a culling of the dairy herd

On-farm inflation is at its highest level in almost 40 years, according to Beef + Lamb NZ’s Economic Service, and costs are expected to increase.  Meanwhile Federated  Farmers  says farmers’ satisfaction with their banks is relatively stable but more are feeling under pressure and the costs of finance are rising.

“Inflation is putting many New Zealanders and businesses under pressure, and our food producers are no different,” Feds President and economic spokesperson Andrew Hoggard says.

While Consumer Price Index (CPI) data has the annual inflation rate at 6.9%, the latest on-farm inflation rate has hit 10.2%  – the highest it’s been since 1985-86 (13.2%).

B+LNZ is concerned increasing regulatory requirements from the Government, such as freshwater and biodiversity rules, will stretch farmers even further.

“There’s a lot of costly regulation coming at farmers at present,” says B+LNZ chief executive Sam McIvor.

“Given the importance of agriculture in driving our economy’s recovery, it’s critical that the Government gets its policy settings right.

“Many of the increased costs due to inflation are outside of the Government’s control, but they can help by ensuring any policy changes are needed, workable and cost-effective for our farmers. 

“Farmers are absolutely committed to the protection of the environment, including biodiversity. They actively manage 1.4 million hectares of native vegetation on thousands of farms across the country, so it’s critical that policies are enabling and supportive, rather than simply putting costly barriers in the way.”

The case for keeping on-farm  costs as low  as  possible is fortified  by reports  of  the  looming  international food  catastrophe.  As The Economist puts it:

“War is  tipping  a  fragile world  towards  mass  hunger. Fixing  that is  everyone’s  business”.

The  authoritative  journal says that  the  widely  accepted idea of  a  cost-of-living crisis does not even begin to capture the  gravity of  what  may lie  ahead.

Antonio Guterres, the UN Secretary-general, warned that the  coming  months threaten “the spectre of  a world food  shortage” that  could  last  for  years.

The  high  cost of staple foods has already raised the number of people  who cannot be sure of  getting  enough to eat by 440m  to 1.6bn. Nearly 250m are on the brink of famine.

”If, as is  likely, the  war  drags on  and supplies from Russia  and Ukraine are  limited, hundreds of  millions  more people could fall into poverty.Political unrest  will  spread, children will be stunted, and  people  will starve”.

As  Point  of  Order  sees it, as  one of the  most efficient food producers in the  world, NZ  should be  bending every  effort  to  expand  the  output of  every  foodstuff it produces. This  means keeping  costs  as  low  as  possible.

It’s  certainly  not the time  for the government to  be  loading costs  on  to farmers.

And its certainly not the time to be culling our dairy herds.