Welcome to this conference edition of Tussock Talk. You will find some information on conference and registration details in this newsletter. There are a few news items of interest for you too, including an opinion piece from Mike Toepfer, a partner in the Wanaka office of AWS Legal on the situation relating to pastoral lease rentals. Specifically he looks at the proposed changes to the Crown Pastoral Land Act (CPLA) following the court decision in the Minarets Case.  The amendment to the CPLA is currently going through the Parliamentary process. High Country presented a submission on the proposed amendment and presented this to the Select Committee early this month. We strongly supported the proposed changes insofar as they set in law that the value of pastoral leases rests in the value of the pasture. Things such as amenity values do not improve production and are irrelevant. If all goes well legislation will be in place later this year (and before the general election).  Another submission High Country made this month was to the Ministry for the Environment on the proposed National Policy Statement on Indigenous Biodiversity. It would be fair to say that we were not quite so enthusiastic on this one. It contains admirable sentiments in aiming to halt any overall decline in indigenous biodiversity but the methods and rules proposed could not be described as practical. Once again we are faced with the situation that most of those people wanting to save the planet don't actually live on it! These are just a couple of issues we have been dealing with over the past few months. Others are referred to in the newsletter or included in the conference programme. There will be plenty to discuss at the conference and if you want to have your say on any matter come and join us in Christchurch on 10 & 11 June.

FMG RESPONDS TO FARMERS’ NEEDS

FMG has been working with the rural community for over 100 years, and that's taught us that farming is never predictable. As a result of severe weather events causing devastation across the country, we've worked with the farming community to develop an innovative livestock catastrophe policy for sheep farmers. This affordable product is the first of its kind in New Zealand and is designed to mitigate the impact on the bottom line resulting from livestock fatalities incurred during severe weather events and natural disasters. As a wholly New Zealand owned and operated mutual, we're all about supporting the interests of rural New Zealand. What are the details of the Livestock Catastrophe product?   
- You'll receive an agreed cash payment benefit based on the sum insured if you suffer a loss of 15% or more of your stock. This loss can be either, or a combination of,
both your capital and immature stock (lambs).
- For the cover to apply, your loss must be as a result of a natural disaster or climatic event including flood, storms,
snow storms and tornadoes, excluding drought.
- You can choose any number of units of cover up to the maximum available.
- A limited number of policies are available per region. 
Please note this is only a summary of the product and is subject to our specific product documentation.  For full details please refer to the policy document.  If you'd like to know more about this product call FMG on 0800 366 466.

NEW SYSTEM FOR ASSESSING RENT UNDER

Introduction
Following the decision in the case of Commissioner of Crown Lands v Minaret Station Limited, which quashed the attempt to partially base rent payable under Crown leases on "intrinsic amenity values", and following lobbying by the High Country Accord, the Government has introduced the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill into Parliament. The Government has acknowledged that the current system has a number of faults;
- it is based on land values, but while land values have been increasing, earning capacity has been decreasing
- the current system is too subjective - it depends on how improvements are defined and valued to arrive at
- the unimproved land value, and different valuers have different interpretations and approaches
- there is no land still in an unimproved state, so there is no hard sales evidence for unimproved land that valuers can use to compare
- there is not much case law in this area for valuers to use as a guideline
- the area is so complex that only a few experienced valuers have the knowledge and skills to do it, and the number of those valuers is decreasing establishing a land value in order to decide a rent can have other implications e.g. for tenure review.
The Government has recognised that under the current system, disputes about rent always become complex disputes about valuation practice, which are costly, time consuming and uncertain. The proposed new system, based on the productive capacity of each pastoral lease as a pastoral farming operation, is intended to be more objective, certain and cost effective.
LINZ has forecast that under the proposed new system, some lessees will pay a higher rent, some lessees will pay a lower rent, but the overall rent generated from all pastoral leases will remain about the same. However, LINZ expects that there will be cost savings for lessees. Their view is that because the system is more objective and transparent, there should be less disputes, and as there is a new and clear dispute resolution process, there should be less time and money spent on settling rent disputes.

How rent will be calculated
The bill proposes that on any future rent review, the new rent will be calculated using the following formula;

a. = b x (c+) (d - c) x 0.15))

Where;
a. is where the new annual rent for the pastoral lease
b. is the dollar per stock unit rate published by the Valuer General in the Gazette that applies on the rent review date.
c. is the base carrying capacity of the pastoral lease as determined under the Act or regulations.
d. is the current carrying capacity of the pastoral lease as determined under the Act or regulations;.
However, the rent cannot be less than an amount calculated in accordance with the following formula;

a = b x c

Where;

a. is the new annual rent for the pastoral lease.
b. is the dollar per stock unit rate published by the Valuer General in the Gazette that applies on the rent review date
c. is the base carrying capacity of the pastoral lease as determined under the Act or regulations.
This means that there will be a minimum rent payable, based on the base carrying capacity of the land. If a farmer is more productive, the farmer pays more rent. If the farmer is inefficient, or for some other reason stock levels fall below the base carrying capacity, the farmer still has to pay the minimum rent based on the base carrying capacity. The base carrying capacity is not defined in the bill - it is to be defined by regulations. However, the public is able to make submissions on the wording of a bill, but cannot make submissions on the contents of regulations. It would be better if the term was defined in the bill.
The current wording of the definition of "current carrying capacity" refers to the "plausible" current carrying capacity of the land. "Plausible" means "seeming to be reasonable or probable". It would be better to calculate the actual current capacity rather than what seems to be the capacity. Hopefully the above issues will be fixed during the submission process.
The dollar per stock unit rate is to be based on publicly available data about farm revenues and expenses, and uses a measure of net farm revenue per stock unit. There is no definition of "net farm revenue", but it is to take into account the long term average spent on rent and servicing mortgage debt.

Assessment procedure and disputes
A new dispute resolution system is to replace the costly and lengthy process of appealing to the Land Valuation tribunal. A Crown appointed assessor will make an initial assessment of the base carrying capacity of a pastoral lease and the current carrying capacity of the land. The lessee (or his or her representative) is entitled to be present when the assessor inspects the land to make an assessment.  After the completion of the assessment, the lessee must be given written notice of the initial assessment, together with any information that was significant to the assessment. The notice must also advise what the rent would be if the lessee accepts the initial assessment.
If the lessee rejects the assessments, an expert determiner will be appointed by the Commissioner of Crown Lands, and the lessee must appoint an assessor. The Commissioner is required, in good faith, to try and agree with the lessee on the person to be appointed as the expert determiner. However, if agreement can not be reached, then the Valuer General will decide. If agreement cannot be reached after the two assessors have met with the expert determiner on the land, a formal hearing will be held. The Crown's assessor must explain to the lessee's assessor and the expert determiner how he or she arrived at the initial assessment, and the lessee's assessors will also have to make an assessment. If the two assessors can still not agree at the hearing, then the expert determiner will decide on the current capacity of the pastoral lease.
Either party can appeal the expert determiner's decision to the High Court if they think there has been an error of law. Strict time limits apply to each stage of the dispute resolution process.

Summary
A move to a system based on the productivity of pastoral leasehold land rather than the land value will be welcome. However, there are some areas which need tightening up during the submission and select committee process. In particular, it would be good to see a better definition of "current carrying capacity" and definitions of "base carrying capacity" and "net farm revenue". The issue of whether a farmer should pay more rent because of their own efforts in improving carrying capacity should also be considered.

Mike Toepfer | Partner
Wanaka Office AWS Legal

CHANGE TO PROTECTION STATUS OF CANADA GEESE

The Government has recently announced that the Canada goose is to be moved from Schedule 1 to Schedule 5 of the Wildlife Act. This means the species is no longer to be managed by fish and game councils and will instead be "not protected" (note this does not mean "pest") This will allow anyone to hunt or kill geese at any time of year without a need for a game licence. The Department of Conservation (DoC) will no longer need to issue permits for goose control. There will also no longer be a need to comply with other game hunting regulations when hunting or killing geese - such as having to shoot the birds with a shotgun while the bird is in flight. Geese will be able to be killed by any humane means, including when they are flightless during their annual moult.
Note, however, that the use of poison will not be allowed as there is no poison registered for use in goose control.

Please be aware that this change has not yet come into force. The change is expected to take effect in 2-3 months' time when the species is formally transferred from Schedule 1 to Schedule 5 of the Wildlife Act. While this move may be seen as a victory of sorts, High Country believed that the option offered by the Minister at last year's High Country Conference was a better solution. This would have left the overall onus of control with the fish and game councils but given landowners the authority to take control measures on their own property. In announcing the decision DoC commented that "much of the burden of goose control will pass to the farming community" and "in places where local control and recreational hunting is unable to meet control standards we may find Canada goose management incorporated into regional pest management strategies as the strategies come up for revision and renewal."  This scenario is not ideal and South Island High Country has already held one meeting with hunters and other representative groups to develop an effective strategy for control. We believe that regionally co-ordinated control is the best way to go and hope to be able to report some progress in this at Conference next month.

FEDERATED FARMERS HIGH COUNTRY CONFERENCE - 2011

Federated Farmers High Country Conference 2011 will be held, as usual, on the Friday and Saturday following Queen's Birthday weekend. This year that will be the 10 - 11 June and for the venue we will be returning to the Chateau on the Park in Christchurch. For the registration form click here. We are planning, once again, to bring you a number of interesting presentations on a variety of topical subjects. The theme this year will be "Sensible Solutions". Looking for sensible solutions sounds simple enough - but it's not always that straightforward when dealing with bureaucrats and politicians.

However, we will do our best, with speakers on hardy annuals such as protective mechanisms; property rights, the RMA and Access; future of the wool industry and the ETS. We will be looking at coping with threats to pollination and, of course, we now have a new challenge in the management of Canada Geese. There will be the usual round of "in-house" matters to discuss - many of which will be open to debate at the section's AGM which will be held between 8.30 and 10.15 on Saturday 11 June 2011.  Check the High Country page on Federated Farmers' web site www.fedfarm.org.nz/industry/highcountry for programme details as we confirm times with our speakers.

Registration
We are again applying the three-tier registration fee system. Registration for current financial contributors to the SIHC Support Fund is $140; current fi nancial members of Federated Farmers (and staff) will be entitled to the second discounted registration fee of $170 while the standard registration fee is $210. Those registering and paying before 23 May 2011 are entitled to claim a $15 discount for each person registered.

Accommodation
As you may imagine, following the recent earthquakes in the Christchurch area, accommodation space is limited and prices are skyrocketing. However, we did reserve a number of rooms late last year at very reasonable rates. The Chateau has agreed to hold these prices, $120 per night, for conference delegates but you need to get in quick to take advantage of these extraordinary prices. To book your accommodation at the special conference rates contact the Chateau 0800 808 999 or www.chateau-park.co.nz state that you are booking for the South Island High Country Conference - reference C*SELF. When visiting their web site you may notice one extra attractions at the Chateau this year: The very fi rst Linden Leaves Day Spa in New Zealand opened there earlier this year - the very thing if you are experiencing some stress when seeking sensible solutions. Further information is available from the High Country Industry Manager, Bob Douglas, on 0800 327 646 or bdouglas@fedfarm.org.nz

Expand your staff's knowledge of cattle breeding in the run up to calving - Learn the fundamentals of breeding and producing healthy livestock with AgITO's National Certificate in Agriculture (Cattle Breeding) (Dairy Cattle Farming) (Level 3). Topics covered include; mating, calving and rearing calves and young stock. You'll learn to understand the selection processes for breeding cattle, understand cattle reproduction and the best ways to achieve top conception rates, identify cows on heat and understand the process of calving and associated health issues.  To enrol or find out more, contact your local AgITO training adviser today on 0800 691 111 or visit www.agito.ac.nz.

Devan Plastics - Devan has been involved in the design, manufacture and distribution of a range of rotationally moulded plastic products, focusing primarily on the agricultural and rural lifestyle market sectors. Devan's core products are its water tanks ranging from 750 up to 30,000l, these are being used for agricultural and commercial purposes, including  the storage of molasses and chemicals.  Also available are waste water systems, septic tanks and spray tanks. Call 0800 500 026 to find out about exclusive Federated Farmers pricing specials. Devan, built tank tough.

Versatile's May mark down - They've got outrageous deals on garage kitsets. Single garage kitsets are priced from $4599 and double garage kitsets from $5699. Visit their website to enter to win one of thirty rugby balls signed by Richie McCaw.  Terms and conditions apply. Hurry, for this is for May only! To find out what other great deals are available, call 0800 VERSATILE or visit www.versatile.co.nz.

TREAT YOURSELF WITH WINESONLINE

For an ever changing selection of award winning wines, check out www.winesonline.co.nz.

More member benefits and offers

To view special discounts exclusive to Federated Farmers members, please call 0800 327 646 or click here to log onto our members only area.

Rural jobs - Looking for staff or seeking a new position within the farming sector?  Visit www.ruraljobs.co.nz to view a range of positions available. Call 0800 FARMING (0800 327 646) to discuss your contractual needs. 

Tussock Talk is an electronic newsletter distributed to all Federated Farmers members who list High Country as an interest on their membership and who have supplied us with their e-mail address. If you have received a hard copy it will be because we do not have your e-mail address. Please let us know if you would like this newsletter delivered electronically, and to check all your details are up-to-date on our database, please call 0800 327 646.

If you have any questions or comments about matters in this newsletter, or anything else relating to the High Country industry, please contact the High Country executive or committee by clicking here. Alternatively, you can contact industry manager, Bob Douglas, by clicking here or by calling 0800 327 646.