Friday, March 29, 2024

Time to act is now

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Pledges are needed quickly from southern dairy farmers to meet the $2 million or so mark to get the proposed Southern Dairy Hub underway.
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The Southern Dairy Development Trust (SDDT), which is developing the $26.5m hub, was granted charitable trust status in mid-July so donations are eligible for tax credits but pledges, not donations, were what was needed now, Southland Demonstration Farm’s chairman Maurice Hardie said.

The hub is intended to replace the demonstration farm at Wallacetown when its lease runs out at the end of the 2015-2016 season. More than 100 farmers have so far pledged funds.

“What we need now is the pledge, we don’t need the actual money until May 2016,” Hardie said.

“We’re asking farmers for at least $2000 each, either by a one-off donation or by agreeing to donate from cull cow sales from their meat processor.”

With SDDT gaining charitable trust status $2000 was a lot less for farmers, and with a guarantee of money through the pledges Hardie said SDDT “could look both of our financial partners in the eye and say we can go ahead”.

He was hoping to have final confirmation this month from the two as-yet unnamed partners so SDDT could start looking for suitable land to convert for the hub.

As well as farmers’ pledges, SDDT would contribute funds raised through the demonstration farm operations.

“Our two partners will be putting in $5m each so they will be on equal footing with SDDT which is important as it will mean southern farmers will, through their pledges, have an equal status with them around the table.”

About 45% of the cost of the hub will be raised through bank loans.

Hardie said there had been no discussions yet with corporates about funding. Ravensdown, LIC, and DairyNZ are the sponsors of the Southland Demonstration farm.

Donations made already are being held in a separate trust account until needed. Those making donations will not be given a shareholding in the hub. Instead, if the hub is ever sold, due to its charitable trust status, all proceeds would go to another charitable organisation within the industry.

The hub will milk 800-850 cows on 300-380ha within a short drive of Invercargill. The herd and farm will be self-contained and will be able to be divided into farmlets for research projects. It will include science offices and a purpose-built venue to hold training and focus days.

 “We want to have room for scientists to work and office space for various people in the industry to use and educational facilities where we can teach farmers and anyone who is interested what we have learnt on this farm,” Hardie said.

“That’s why we have to be reasonably close to an airport, so people can travel to it easily.”

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