India–New Zealand FTA talks continue in Delhi as officials pursue trade breakthrough
This past week has seen another round of negotiations between India and New Zealand to produce a free trade agreement (FTA) between the two countries.
With gloomy trade news almost daily, farmers are likely to revise their farm budgets downwards. Given pastoral agriculture spends around $13 billion on goods and services each year, this has implications for both the provincial and national economy.
"It's no secret while primary export volumes have increased, commodity prices are in retreat," says Bruce Wills, Federated Farmers President and economics and commerce spokesperson.
"The current export climate still has Europe in a bad way. America remains bad, though slightly less bad of late, but demand from key Asian economies has weakened and this includes China.
"The picture out of Australia isn't much rosier. Aside from Western Australia most state economies are either in or tiptoeing their way around recession.
"While some say we shouldn't have all of our blocks of butter in the dairy basket, whatever we export and wherever it goes, we face the same tough international environment. It applies equally to hi-tech and tourism as much as it does to wool.
"Compared to last year, I'm getting around $40 less for a heavy prime lamb. I now expect my farm income will be down 20 percent and I shudder to think what would have happened if we hadn't had a wet summer.
"The New Zealand dollar isn't doing exporters any favours either and I'm at a loss to explain why it hasn't fallen. Economic fundamentals should be driving it lower but despite the gloom, it was over US$0.81 when I last checked.
"Maybe it's because we're one of the 'least bad' economies in the OECD. Whatever the cause, we're hurting and that will be expressed by farmers keeping a close lid on what they spend.
"I know there'll be calls for currency intervention but frankly, that's trying to stop the incoming tide with your hands. We can't take on global markets, but need actions to support exporters.
"Councils must keep their rate and fee increases in check and this applies equally to the Government's spending plans ahead of Budget 2012. We're also keen on planned changes to the Public Finance Act to improve the fiscal discipline of the economy's biggest spender.
"Rather than the blunt use of the Official Cash Rate, we'd prefer the Reserve Bank to selectively take the heat out of sectors by using 'macroprudential tools'. Things like capital adequacy and liquidity policies could, for example, mandate a minimum deposit for home mortgages.
"The priority for farmers will be productive investment and tackling debt to take advantage of stable interest rates. Whatever happens, we expect farmers will recast their farm budgets to an extremely conservative basis," Wills concluded.
Managing director of Woolover Ltd, David Brown, has put a lot of effort into verifying what seems intuitive, that keeping newborn stock's core temperature stable pays dividends by helping them realise their full genetic potential.
Within the next 10 years, New Zealand agriculture will need to manage its largest-ever intergenerational transfer of wealth, conservatively valued at $150 billion in farming assets.
Boutique Waikato cheese producer Meyer Cheese is investing in a new $3.5 million facility, designed to boost capacity and enhance the company's sustainability credentials.
OPINION: The Government's decision to rule out changes to Fringe Benefit Tax (FBT) that would cost every farmer thousands of dollars annually, is sensible.
Compensation assistance for farmers impacted by Mycoplama bovis is being wound up.
Selecting the reverse gear quicker than a lovestruck boyfriend who has met the in-laws for the first time, the Coalition Government has confirmed that the proposal to amend Fringe Benefit Tax (FBT) charged against farm utes has been canned.
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