Speeches

Farmer Wellness Big Breakfast – Fieldays speech

Thursday, June 11, 2015 - 13:29
Primary Industries

The title of my speech today is "Managing Through Tough Times".

I came up with the idea of this function when I was out running about six weeks ago and felt the time was right for the Government to communicate two very important messages to our farming families and communities.
 
Firstly, I want to acknowledge that these are challenging times for many farmers and the wider rural community, particularly in the dairy sector, but that we expect much improved conditions in the longer term.
 
Secondly, I wanted to reinforce the message that if farmers are struggling, or have concerns about how things are going, you are not alone and help is out there.
 
We know there are plenty of challenges this year, as there always is with farming.
 
Fickle weather and Global commodity fluctuations,  to name just a few. These are all a part of farming life.

This National Government backs rural communities and this can be easily demonstrated by the recent Budget.

You have heard me talk about Biosecurity being my number one priority since I became Minister and I'm proud of the extra $27 million that will help further strengthen the overall biosecurity system with more detector dogs, X-ray machines and people.

The international passenger border levy will also ensure, as future passenger volumes grow by 3-4 % per year, that this funding continues to increase. 

Droughts are challenging for our farmers and growers and most of the East Coast of the South Island has suffered a pretty tough drought. Even now conditions are still very dry in North Canterbury.

That's why the Government has a real focus on water storage projects and $25 million has been allocated for the Irrigation Acceleration Fund to help kick start these important regional projects. 

We are also focussing on skills and agriculture development with an extra $7.5m that includes boosting overseer and an extra $10m will help implement and strengthen the new Animal Welfare Act.
 
A couple of days ago MPI released their Situation Outlook for Primary Industries.
 
It shows that total primary industries export revenue for the year to June 2015 is expected to be $35.2 billion – eight percent down on the previous year, due to falling dairy and forestry prices, slightly offset but some increases from meat and wool prices that is expected to increase from 8.2 percent to $8.8 billion.
 
Horticulture has had a record year with earnings for 2014 topping $7.5 billion for the first time. Kiwifruit in particular has bounced back strongly from Psa with over $1 billion in exports, and wine is also benefitting from significant growth. 

There are positive signs ahead for forestry, with expectations of a sustained recovery in the US housing market boding well.

The dairy outlook for the rest of 2015 and beyond confirms what many of you already know - it will be a tight year ahead. The revised Fonterra payout forecast of $4.40 kgMS for this season and $5.25 kgMS means people will need to budget carefully.
 
The short-term outlook for dairying is uncertain, because the world market is volatile. There are several factors at play; 

How long will Russia's ban on dairy imports particularly from the EU last?

How quickly will demand for dairy products in China turn around?
 
Another factor is the removal of European Union milk supply quotas in April this year. 

I returned from Europe yesterday where I visited France and Poland, and spoke at the International Agricultural Forum at the Milan Expo and at the Food and Agriculture Organisation (FAO) conference in Rome.

This gave me a great opportunity to meet with many of my counterparts from these countries and beyond.

The feedback I received is that some EU countries will produce more milk and some who struggled to meet the quota cap will continue to do so. I’m told that 20 of the 28 member states were under their quota last year.

Overall milk growth from the EU is estimated to increase by 3% by 2020 or beyond, so we won't be seeing a tsunami of milk coming out of the EU like some had predicted.
 
While the global dairy markets look to be volatile for most of 2015 MPI expects dairy export revenue to recover in by June 2016, reaching $14.8 billion and rising to $18.4 billion by June 2019.
 
It’s very important for us to remember that the medium to long term outlook for all primary sectors is very positive. As the Asian countries on our doorstep become increasingly wealthy, their demand for our protein and our products is only going to increase. 
 
Some forecasts predict global food demand may increase by 40-45 percent in the next 10 years, driven by a rising global population and the emerging middle classes of Asia. This is very relevant for the seafood industry where prices are forecast to increase by 20% by 2019 with little volume increase.

Global dairy demand is forecast to increase similar to Fonterra's total NZ production (about 20 billion litres) per year and combined with dairy export revenue growth forecast of 30% out to 2019, puts us in a very strong position.

Help is out there to Manage Through Tough Times and it’s very important for farmers and their families to realise they are not alone.

Rural Support Trusts play a critical role and the Government increased funding by $200,000 this year to cover drought on the east coast of the South Island. These are rural people; they know the issues, the community and they are there to help.
 
Often it just helps farmers to talk through with their neighbours and mates on how they are coping with issues. They might be surprised to find they are not the only one facing challenging times.
 
Seek professional advice and talking to the bank manager early and often is critical to success. Kirk will have more to say about this in a minute.
 
Check out Farmstrong, which launched last week. This is a new initiative launched by the Mental Health Foundation and rural insurer FMG which encourage farmers to take better care of themselves in times like these. It’s designed by farmers for farmers.
 
Have a look at Dairy NZ’s Tactics for Tough Times. This brings together tools, tips and tactics to help dairy farmers thrive through a low milk price season. A series of events and seminars can also help with on-farm decision-making and strategy.
 
Another example is Doug Avery’s Resilient Farmer initiative, which Doug himself will discuss shortly. This work is supported by the BNZ and a number of primary sector organisations and involves speaking events, and provides newsletters and online support.
 
There is a range of material here today you can take away. This includes a summary brochure prepared by MPI on the future outlook and support available to farmers, their families, and employees.
 
This includes material from the Health Promotion Agency, FarmStrong and the New Zealand Bankers Association. There is also information from the Health Promotion Agency available on USB sticks for those who don’t have good internet connections.

New funding
 
So there is no shortage of good advice and support out there. One of the goals of this event today is to bring it all together under one roof.
 
Farmers are not interested in handouts, but they want to know we care and are supporting them. As a Government, we know this is a unique and challenging year for many farmers.
 
For that reason, today we are announcing new funding to support rural communities.
 
The Ministry of Health and Ministry for Primary Industries have each contributed $250,000 to the one off funding boost.
 
MPI’s funding will improve the coordination of existing outreach services, and develop new support programmes and resources for those farmers and communities in great need.
 
Minister Coleman will have more to say in his speech about what the Ministry of Health will be doing.
 
To finish, thank you to everyone in the room for the great work you are doing to help our rural communities. This will be a challenging year, but we will all manage through tough times - as we always do.