Tough times on the farm

 

A cut in Fonterra’s forecast payout from $8 to $7 per kg of milk solids will wipe $5 billion off the country’s Gross Domestic Product. Most farmers need $8 to just break even. Northland is going to be hit hard.

Letterbox spoke with local Federated Farmers President Colin Hannah for his take on things. Here's what he had to say:

"The largest industry in Northland is about to be hit again and the impact on the Northland economy is going to be reasonably dramatic. 2017 Northland produced 101million Milk solids, this year 63 million. Depending on what multiplier you use the effect is being felt all round. For every Dollar a dairy farmer spends it is floating around 8 to 9 times.

"With the drop in payout the cost of production is going to exceed revenue, and there will be considerable losses in our region by the majority of dairy farmers. The losses will be felt by the community as farmers close their wallets and only spend on absolute necessities. We are already seeing this. These losses mean the tax take will be down considerably. The regional council rate increase over three years 53%. We have had at least 3 to 4% increase above national inflation because of infrastructure costs, mostly transport, from road closures, diversions, time outs on driving hours and the empty return journey. We all pay.

"Many farmers have run out of conserved feed and are now having to pay for additional feed due to the wet conditions.

"On top of this as a region we cannot afford to lose anymore dairy farmers.

 "My message to our councils is that there is very close to $2 billion out of the Northland economy annually just from the land use change, legislation and farmers had a guts full of the stuff being dished up to them as the villains. I don’t think the councillors get it.  The only people on the regional council who understand what I’m talking about is the 3 farmer representatives.

"Beef farmers are facing a dropping schedule and aren’t that happy. The weight gains are poor, nutrients are missing in what pasture they have left. Ground damage will take a while to fix."

Farmers of course are not the only ones hurting. It was for this very reason that farmers and others were calling for their local councils to limit rate increases. The only local council to do so was Kaipara. The other councils - and the Northland Regional Council in particular - need to remember who they represent. It seems many of our councillors are too blind to see the pain that lies ahead or lack the intellectual capacity to comprehend it.

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