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.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
1 comment:
The main reason for the increase in costs has very little to do with war. The main cause is the increasing obsession with the climate change farce and the sheer stupidity of governments around the world with the reaction to covid.
A farmer when considering culling stock takes into account productive capacity(what they produce in relation to others in the herd), and temperament(you don't have time to put up with bad tempered idiots). This same policy should be applied when dealing with politicians. That way we could get rid of those ministers who don't produce and hopefully raise the level of intelligence.
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