Six months of low sales in Southland and Canterbury reflect tighter rules governing foreign buyers, a less favourable outlook from banks to dairying and fear among buyers of pending regulation and change.
On the horizon are promised tax changes, the likely introduction of environmental taxes and regulations and an expected increase in borrowing costs following a Reserve Bank requirement that banks retain more capital.
It also appears corporate interest in the dairy sector might be cooling, which, with tighter rules restricting foreign ownership of land, creates some angst for owners of very big, predominantly South Island, dairy farms.
More will be revealed in coming months with the Government due to respond to the Tax Working Group’s proposals, to address the threat facing biodiversity, to improve water quality and set out how New Zealand will become carbon neutral by 2050.
One thing is clear: these changes – real and pending – will make farming a very different industry in December to what it is today.
It is hoped for the sake of NZ’s most important export industry that practicality not ideology drives those changes, the economic importance of agriculture is recognised, the sector is not suffocated by bureaucrat-satisfying, box-ticking compliance and reference to sustainability includes people and communities.
It is hoped that our skills as food producers are recognised and that new compliance does not put them out of business only to have production picked up by less efficient operators in another country.
But the signs are not great that will be the case.
Last week Climate Change Minister James Shaw ruled out the growing scientific consensus that methane emissions from livestock can be managed separately from carbon dioxide because that would mean restarting the consultative and legislative process.
Neal Wallace
