Andrew Hoggard's address to the Dairy Council at Federated Farmers' National Conference, Wellington June 20, 2017
Good morning everyone,
As my three years being your dairy Industry chair comes to end, it is worth reflecting on what a rollercoaster ride the last three years have been for me.
For the first two years it was mainly a huge focus around the downturn in prices with all the various attacks on dairy coming a close second, and this last year with prices thankfully recovering, the critics of dairy in particular and agriculture in general have really cranked things up.
The pressure isn’t just happening here in New Zealand, but it is a worldwide thing in the developed world, at my recent International dairy federation meeting we spent a quite a bit of time on the anti-dairy movement.
The nuances are different in each country, but by and large it revolves around the animal welfare aspects, and the environmental aspects. Often the two are linked with the vegans pushing the animal rights side, pointing to the co-benefit of in their mind of saving the planet by going vegan.
Likewise, the environmentalists will point out that we don’t need animal based agriculture anyway, as you can get all the nutrition you need from lentils, mung beans, and tofu.
It is also not just the traditional hippy type activist’s that want to tell us how to farm us well.
Many of you won’t have heard of FAIRR or Farm Animal Investment Risk &Return. It is an initiative that is meant to advise investors around the pitfalls of what they call factory farming, and was put together by Jeremy Collier a leading investment funds manager.
Basically the people behind this have around $1.5 trillion in assets that they manage. Think Gareth Morgan, but infinitely richer, and probably less prone to gaffs and cat jokes. I guess the question for us is, do they see us as factory farming?
Unfortunately, I think many of these types view any sort of farming where you either have to employ another person to help you, or if you have more than a handful of animals as factory farming.
I just use them as one example of some of the international challenges that dairy and agriculture in general face. Unfortunately, internationally, I think we all too busy trying to get a jump on our fellow global farmers, to get a bigger slice of the pie, we are missing the point that the pie is at risk of being reduced in size.
And, that there is a whole lot we should all be doing in the pre-competitive space before we start trying to knife each other. The classic example of course isn’t dairy, but lamb particularly in the UK.
At times I question whether UK sheep farmers ever spend any time on their farms as all they seem to be doing is spending time in supermarkets looking for a NZ lamb chop to photo, and then complain about it on Twitter. Meanwhile, lamb consumption plummets.
This also means globally we need to be aware of our farming practices and how they might be perceived, and be willing to change and adapt, so to ensure that we do not lose customers.
Many people talk about the potential rise of synthetic milk as a threat to traditional diary consumption, but we already have alternatives that are taking away market share from us.
Some farmers won’t like this, but here is the reality.
You do not have the any rights that people must buy your products, if customers like what you are selling then they will buy it, if they really like it then they will pay more, if they don’t like your product or the story behind your product they won’t buy it from you.
I guess my message for farmers is simple, change is constant, the bar particularly around various aspects of the environment and animal welfare will continue to be lifted by our customers. We will continue to need to adapt to meet that, we just need to accept that.
Focusing back on New Zealand, the challenges to our sector have been on the environment, animal welfare, and employment front. Some of the criticism has been justified, but some is way over the top, and even often when criticism maybe due, it is deliberately ignoring the good work that is going on to improve many of these areas, while also exaggerating the issues.
Recently, we had the launch of the Fresh Water Rescue Plan by a group of organisations. Dairy farming seemed to be a target of this group as a number of the proposals seemed to focus heavily on dairy, and encompass a great deal of the criticism I have been hearing over the past few years.
So if I may, I will focus on some of these points.
Irrigation has been a favourite target for many groups because they link increased irrigation to an increase in dairy, and thus an increase in nitrogen run off.
So the catch cry is, let’s scrap the government funding for irrigation schemes, or subsidies as they like to call them. Let’s be clear these are not subsidies.
It is a contestable fund, which is there to enable the starting up of projects. The projects themselves have to stand financially on their own two feet. The government funding is beneficial in getting things underway.
We need to consider irrigation like any other piece of national infrastructure. There are plenty of roads in this country that I will never drive on, yet my taxes help pay for them.
If we were to say that only the people that live on a certain road were to pay for them then nothing would get built in this country.
Irrigation is not just about dairy; water is vital to growing everything. Without water nothing will grow, so all those people who argue that we should have other farming systems than dairy, then I’m sorry but we still need Irrigation.
Given climate change is supposed to bring drier conditions then surely we want to mitigate that, and protect our country’s economy and food supplies against the potential impact of drought.
Or would these groups prefer that we suffer penance like some sort of medieval religious cult. The amount of dairy expected to be in the Ruatanwhia irrigation scheme was only going to be about 10%. If I look at my farm, I have some of the best soils in the Manawatu, I could grow anything based on my soil, but I do not have reliable summer rainfall, so without irrigation, pastoral agriculture is the smartest and most profitable option for me.
Instead of being the villain, irrigation could actually be the hero, modern precision irrigation methods may well be the key in reducing nitrogen leaching from many farms.
Nitrogen leaching occurs when the soil water level is at saturation point. By applying only, the exact amount of water required to keep the soil at field capacity then this will ensure that the nitrogen stays in the soil root zone being absorbed by plants and utilised for plant growth.
Other modern technology can assist in ensuring that fertiliser is only applied where required, and then projects like managed aquifer recharge can assist further in lifting the levels of our aquifers and reducing the build-up of nitrates in those aquifers.
The key thing with irrigation is to ensure that there is sensible regulation in the background to make it clear what outcomes we as communities desire.
We need to focus on the outcome we want which is swimmable, healthy waterways, if an irrigation scheme can deliver on that, and has mechanism’s in place to ensure the right outcomes then surely as a country this should be something we are behind.
One of the key items pushed for in the Fresh Water Rescue plan is concept of Polluter Pays as it is titled. The first question obviously; is this some sort of proposed levy tax??
I trust this then applies to everything, meaning stormwater and urban discharges as well? I assume the theory behind this is that if you apply a cost to a unit of pollution then you will incentivise the reduction of that pollution.
This may sound good in theory and there are a number of examples of this working, but it works where you can accurately and simply measure the pollutant and, how much is being emitted so really where you have a point source, but for diffuse run-off I would question whether this is even practical.
For the polluter to pay, you need to know exactly the amount of pollution you are charging against in the first place, and then there are the questions around how much and what will this money be used for.
So if we look at the main containments that come off from rural landscapes, it is nitrogen, phosphorus, sediment, and E-Coli. The problem is we can measure them in the waterway, but how on earth do we measure them coming off the farmland?
In the city its simple you have a pipe, that either goes into the waterway or far enough out to sea that we can pretend it doesn’t happen. But on farm’s there is no such pipe.
Where there is a pipe, it goes to an effluent spreader and it either gets applied correctly or the farmer ends up with a fairly hefty fine.
For nitrogen we have the computer modelling program Overseer, it will give an estimate that could be plus or minus 30%. For sediment, phosphorus, and E-coli we have nothing.
The important point is that not all water quality issues are nitrogen.
In my catchment the challenge is sediment, and I have been told that by one of the authors of this plan. So how would taxing me on my nitrogen run off improve that, it wouldn’t.
The focus would need to be on sediment so how would they even measure it? On my farm the sediment likely comes from riverbank erosion.
I already have the entire length planted, it’s all fenced off, what more can I do?
This whole phrase also suggests that farmers aren’t already paying a lot to meet higher expectations and standards. Effluent systems of today cost in the hundreds of thousands of dollar range compared to mere thousands two decades ago.
Stream fencing, riparian planting, wetland creation, erosion control- all these things also cost money, and farmers are investing more and more into these.
So farmers are investing heavily in improving the environment and will continue to do so. What would paying a tax on top of that achieve? Most likely less money to spend on all the activities I just mentioned.
The problems where they exist are created on farm, thus the solutions exist on farm as well, taking money off farm and putting into the general fund will not help pay for the work needed on farm.
The other big issue I have with this approach, making the assumption that all the contaminants could actually be measured and taxed simply.
Then it may have worked if we put it in place back in 1840, then people could have factored it into the cost they were willing to pay for land.
But the problem with doing it now is that young couples taking over farms right now are paying a price for that land based on its productive capacity, and the expected costs, so that they generate a livelihood.
Many of them are stretching or have stretched themselves thin to get that first farm. They haven’t budgeted for any nitrogen, phosporus or sediment taxes.
Thus any such taxes could have a double whammy of potentially making the cashflow situation on farm untenable but also reduce the farm value, which would then potentially cause issues around whether they any longer have enough equity in the farm to remain viable as well.
In all fairness IF approaches like this are going to be made then those farmers affected MUST be compensated for them loses.
Many of the current issues that farmers of today are grappling with in relation to the environment, are caused by the actions of past generations, both on farm and with planning and rules.
But I’m not blaming those people either, they went with the knowledge they had in those days to meet the challenges and the goals they had. With our knowledge now, we know there are some things we need to go back on and find some new ways, but it would be manifestly unfair to lump the entire cost on one generation.
But I don’t think this is a path we have to go down, I look at my own region, things are heading in the right direction, yes, we may be coming from a low bar but the direction of travel is the right way.
In fact, the poor old Green Party tried to organise an event talking about river pollution at the Manawatu River, and the river went and upset the party by being nice and clear!
There is definitely more work to do, but it is about carrying on with the work that is already on going, it is about focusing on the catchments that need focus, it is about informing farmers of good practice and new and innovative ideas, it is about continued investment both on farm and in science and practical research, these things are happening and they are real.
This end is nigh diatribe that continues to be dished out and the hashtag broadbrush efforts to take us back to subsistence agriculture is not the solution.
Some people go on about Peak Cow, well I’m at peak greenie. Though if Peak Cow turns out anything like Peak Oil where back in 2008 Russel Norman was going on about petrol hitting the $10 a litre mark within the decade, well, I guess that probably means it’s just another topic that Russel doesn’t have a clue on what he is talking about!
Whilst I’m on the subject it would be deficient of me not to give Greenpeace a bit of a serve for their antics in the past year. Which is really summed up by their latest campaign where they deceitfully tried to portray themselves as dairy industry PR people on Twitter.
At first a number of farmers followed them, but then most smelled a rat and it was no surprise to most of us when the truth came out, the only ones who seemed to be fooled were Greenpeace supporters, which isn’t surprising given they are gullible enough to give money to them in the first place.
They then doubled down on this by attacking DairyNZ director Ben Allomes for talking about children being bullied at school because they come from a dairy farm.
To me this organisation seems to exist for one reason only to raise funds to provide employment for the people employed in it, and going by the tweets on the weekend provide them with trips to Italy so they can tweet from Rome, this group will stoop to any level to scaremonger for those funds.
They are on record in the [United] States admitting to lying in regards of claims made against Resolute Forest Products, if you read up on the Resolute case, you can see they are running by exactly the same play book here in New Zealand when it comes to dairy.
I let them know back in summer that they were more than welcome to visit my farm, discuss the issues and see first-hand what I was trying to do, but they showed no interest in that, so forget it.
Many farmers want to fight back against what Greenpeace is doing, the challenge for us is that if Federated Farmers, DairyNZ, or Fonterra go at them head on then they will portray that as the corporate bully boys targeting the poor little activists.
Cut through will be possible but harder than if its 12,000 families questioning them head on.
The challenge for the dairy sector is how we harness the passion of those 12,000 families and connect them with the rest of New Zealand.
However, I have no wish to finish my speech discussing them. Instead I would like to finish by thanking all of you for your support, in particular to all of those that have been part of my exec, Allan Baird, Kevin Robinson, Neil Filer, Jessie Chan Dorman, Matt Wade, Richard McIntrye, Wayne Langford, and Chris Lewis.
As a team you have all been very supportive, well it least you seemed to be, and if you were plotting behind my back you must really suck at it, because I lasted my three years!
I would like to also recognise the various people I have learned off in my time at Feds, from past dairy chairs and national presidents, to my current board colleagues.
Many thanks of course to Ann, for her constant efforts to keep us organised, I think the best way to express the value that Ann brings to our section, is the comments from past dairy chairs now provincial presidents who said upon moving on from the dairy section they felt lost and without support and had no clue as to what was happening.
Finally, not that they will hear this but of course to my family, they have to put up with a lot at times when the phone goes mental, or I’m off at meetings, and without their support I couldn’t do any of this.
So huge thanks to my parents – sorry dad for achieving higher office than you ever did – to my daughters who actually don’t have much of a clue as to what it is when daddy disappears, and finally to much suffering wife.
There is no way I could do this job without her holding down the fort back on the farm.
I have no idea whether this will be the last speech I give for Federated Farmers or not, if it is bugger, cause I did keep some powder dry for future use.