Prior to the pandemic farming contributed less than 10% to GDP and dairying was 3.6% of GDP. Clearly, farming is not the backbone of the economy and 30,000 farmers have a far greater influence on Government policies than they deserve.
Over the past few decades farmers have claimed that they are concerned about damage to the environment and about climate change but they have had a policy of delay, deny and defend to avoid paying for any of the damage they have done and continue to do. The Country programme on Newstalk ZB is a good example of the false and misleading information continually put out by farmers who are resistant to any change that costs them money.
Farmers pay $151 million in levies each year to farming organisations to promote their interests and products. They can also pay over $1000 each year to Federated Farmers.
The Prime Minister’s Department stated that she had met with Farming organisations 20 times in 2021. They had probably met the Minister of Agriculture 100 times and Government officials hundreds of times during the year. In contrast, the main well known environmental organisations who are concerned about the environmental and climate change damage being done by farmers, had one combined meeting with the Minister for the Environment in 2021. He only had one vote when Cabinet decisions were being made so all the previously promised reforms were rolled back.
Farmers and other rural businesses were classified as doing essential work so were able to work during the Covid-19 lockdowns but many claimed the wage subsidy for their staff and family.
A farming leader said that there was a division in the rural community between those who took the wage subsidy and those who thought that doing this was fraud. In some areas lists of those who took the wage subsidy had been circulating. He outlined why no farmers should have claimed and retained the wage subsidy.
Since 2020 wealthy farmers can each be paid over $3,000 by the MS D to help recruit a farm worker and they can also get a flexi-wage subsidy.
Businesses take out insurance to mitigate some of the risks they face and if a large competitor or a new technology comes into the country they have to accept that profits will be reduced or they could be put out of business.
In contrast farmers expect taxpayer assistance whenever they are impacted by a drought, flood, snow or hail.
When mycoplasma bovis was found in 2018 some farmers risked having reduced profits so they got the Government to agree to paying up to $900 million to deal with the disease, with farmers paying some of the cost. The Prime Minister said that it could be disastrous for the economy. However, farmers who had worked overseas later said that farmers in Australia and other countries managed the disease and regarded it as another cost of farming.
An American farmer who was visiting New Zealand said that only stressed animals got mycoplasma bovis and that it could be cured by organic non intensive farming. If he was correct, this could be another reason to reduce intensive farming.
Some wealthy farmers with stock affected by mycoplasma bovis were upset at the possibility of reduced profits but the Government said that no farmer would be worse off. This included paying them for what would have been future profits. Stock tracing requirements were ignored by 60% of farmers and a year later 20% were still doing this so trying to eradicate the disease was a big gamble. One farmer said that it was difficult to trace stock movements because some farmers sold for cash in order to dodge tax. Emma Higgins of Rabobank said that 3% of stock would be culled but farmers who were not affected could get higher profits.
On the RNZ Detail programme on 1 June 2022 a Massy University Professor said that it only affected a small number of dairy cattle on a small number of farms. He said that there were worse endemic cattle diseases in New Zealand that cost farmers a lot more than Mycoplasma Bovis would. There was no economic reason to try to eradicate the disease so he thought that it was a political decision. Over $220 million compensation was paid out.
Clearly, public servants and Government Ministers were conned by farming representatives into believing that the country faced a major crisis. They did this in order to help a small number of farmers avoid some extra costs and losses.
In May 2021 a small number of farms near Ashburton were flooded and some had a lot of shingle left on them. This was due to confining the Ashburton River between stock banks and then taking a lot of water for irrigation so that shingle was not washed out to sea. Despite this being the fault of wealthy farmers, the Prime Minister visited and agreed to pay $40 million compensation to a small number of farmers. This problem is going to get worse all over Canterbury and New Zealand. Many urban homes are going to get flooded so insurance premiums will increase. Homeowners pay into an earthquake damage fund so farmers should set up an adverse weather fund.
Already agricultural emissions are costing taxpayers $800 million each year and damage being done to rivers, drinking water supplies and the environment is probably also costing taxpayers a similar amount. Data supplied by the IRD shows over the past ten years the total tax paid by all dairy farms averaged out to about $70 million each year so the taxpayer pays out vastly more than dairy farms contribute in tax.
Federated Farmers claimed on its website that individual farmers are better off by thousands of dollars each year as a result of their work with politicians and officials in Central and Local Government. A later posting states: Through our advocacy at a local and national level, we have influenced decisions around legislation affecting stock and land, the supply of farm needs, taxation and rating.
Dairy farmers are some of the wealthiest people in the country but they have been paying little or no tax. This is the result of the use of trusts and livestock valuation scams and other arrangements made after lobbying officials and politicians.
In 2007 it was revealed that one quarter of dairy farmers paid no tax and the remainder each paid very little. In 2011, it was revealed that the average dairy farmer pays less tax than a couple receiving New Zealand superannuation. In the year ending 31 March 2016 the average tax paid by dairy farms was $3,840. This is about the same as the tax paid by a couple whose sole income is New Zealand superannuation.
In 2016 the 17,971 registered as being in the dairy sector, including companies, trusts, partnership and self employed, paid $69 million in tax ($26 million in 2009). The figures also show that 10,051 or 56% reported a loss for the 2016 year (9014 in 2009) and another 2621 or 15% reported trading income of between $1 and $20,000 (2635 in 2009). In the 2016 year dairy exports were 12.2 billion but, instead of dairying making a substantial contribution through taxation, net losses of $1.022 billion were claimed. The declared income from dairying was $674 million but this was offset by losses of $1.696 billion. These losses can be written off against future income.
The average taxable income from dairy farms in the ten years to 2016 was $691 million. The tax paid on this would have been about $70 million each year. This would seem to be much lower than the cost of environmental damage being done to waterways and drinking water aquifers each year.
Dairy farms do not pay for the billions of litres of pure water they use but homeowners in the same region can end up with a contaminated, restricted and expensive water supply. It is not possible to reverse the billions of dollars of environmental damage done by intensive farming but attempts at trying to make improvements to the Rotorua Lakes and Lake Taupo are costing the taxpayer hundreds of millions of dollars. In 2007 the Canterbury Regional Council estimated that it would cost ratepayers $10 billion to clean up Canterbury waterways but the cost would now be much higher.
Christchurch once had the purest water supply of any city in the world but in 2019 the Canterbury Medical Officer of Health predicted that city water would be undrinkable by the turn of the century. In December 2017 the Christchurch City Council said that it would cost $100 million to start chlorinating the city water supply. Cancer causing nitrates are almost at the level where the City will have to pay over $600 million to try to deal with them. Water restrictions are threatened from time to time by the Council and residential properties now have to pay excess water charges. In contrast, the largest dairy farm in mid Canterbury has Consents to use half the water used by Christchurch residents completely free of charge.
Some dairy farmers have shown that dairying which is not intensive can be just as profitable. If there was less intensive dairying, this might reduce tax paid each year by $10 million or $20 million but this could result in huge savings to the taxpayer and ratepayers. It would benefit the health and wellbeing of the general population and reduce for them the costs of water charges, bottled water, filters, illnesses, restrictions etc It would also benefit income from tourism and the clean green brand.
Dairy farms use a lot of electricity so this pushes up electricity prices for homeowners.
The Dairy sector probably pays billions of dollars in interest each year to Australian and other overseas owned banks so this substantially reduces incomes received and the net value of export receipts.
The tourism industry in the South Island has been built on the beautiful unspoilt views of the Southern Alps and the southern lakes. These vast high country areas were owned by taxpayers and leased by farmers but over the past twenty years arrangements have been made with politicians to give away this land to farmers. In some cases farmers have been paid to take ownership of lakeside land, which has the potential to be sold for hundreds of millions of dollars. In other cases farmers have paid tens of thousands of dollars for land, which the farmer has then been able to subdivide and sell for a profit of over $100,000,000. Taxpayers have given away billions of dollars of land to farmers and as a result the tourism industry will be put at risk from the development of previously unspoilt areas. More details about this are contained in a book on the subject by Ann Brower of Lincoln University. She calculates that farmers on average have been able to sell this land within a short time for 495 times more than they paid for it.
Since 1951 many farmers have belonged to vet clubs which have been given special tax free status by politicians. These vet clubs compete against rural vets who pay tax on their incomes.
The Tourism industry sells New Zealand as being clean and green and 100% pure but it is only a matter of time before this is exposed overseas as a fraud. The true situation is that, based on a survey of environmental measurements, New Zealand is in the bottom one third of countries. Farmers are steadily increasing the damage they do to the environment and this will accelerate over the coming decades. The public will end up paying a heavy price for this.
Farming has far more workplace deaths than any other employment sector so farmers have arranged with politicians to not prosecute any farmers and to classify farming as low risk.
Dairy farmers could well afford to pay high wages and provide good working conditions to encourage New Zealanders to work on dairy farms but many choose not to do this. They have arranged with politicians to bring in thousands of lower paid workers from the Philippines and other developing countries to work on farms. These workers used false papers showing that they were qualified herd managers to gain entry. Farmers were well aware of this so when the scam was exposed, Federated Farmers arranged with politicians that an investigation would be dropped and there would be no prosecutions of workers.The overseas workers send most of their earnings back home so this does not help the New Zealand economy. The politicians do not care about this or whether income support benefits are being paid to many thousands of New Zealanders who could otherwise have well paid jobs on dairy farms. Nor do they care that most of the people brought into the country will avoid immigration rules and end up staying here and they and other family members they bring in could at some stage compete for low paid unskilled jobs or become a burden on the taxpayer.
One dairy farm can use the same quantity of water that a town or small city uses but they, unlike many urban ratepayers, do not pay anything for each litre of water they use.
Intensive farming uses large quantities of fertilisers and generates huge quantities of animal effluent. This gradually seeps into rivers and drinking water aquifers and contaminates them. Farmers have only been forced to take limited action to prevent this happening, despite the fact that taxpayers and ratepayers will end up having to pay the billions of dollars required to try and reverse the environmental damage being done.
New Zealand does not have the same high quality water standards which other developed countries have. This means that many rural and urban people get sick from drinking water contaminated by farm run off. In Canterbury there have been many outbreaks of illness with one person coming close to dying. The Labour Government, which was in power for 9 years to 2008, had a water quality spokesperson. Despite this the Government did nothing about water quality due to lobbying by farming organisations. In 2017 the new Government had promised to stop the contamination of rivers and make them swimable but lobbying rendered the measures they took almost worthless.
Soils are being destroyed by super phosphates containing cadmium and by urea containing nitrates. If farmland with high levels of cadmium is subdivided into sections and homeowners grow vegetables, they could risk serious illness or death.
Many cows die of nitrate poisoning each year and there are high nitrate levels in some drinking water supplies. Nitrates cause bowel cancer and blue baby syndrome which can lead to death.
The world is facing major problems due to climate change caused by emissions so those who are causing the problem are being penalised and those who are improving the situation are being rewarded. In New Zealand over 50% of emissions are caused by farmers but they arranged with politicians for taxpayers to pay the huge amounts which they were going to have to pay in penalties. This meant that there was no incentive for farmers to make changes, which would contribute to a reduction in climate change. After 1990 there was a big increase in intensive dairying each year and a big increase in emmissions from urea and cow urine and a big increase in freshwater contamination. Farmers denied any responsibility and did everything they could to avoid paying anything towards the damage they were doing. When it became clear that the stock numbers they had rapidly increased had to be reduced a little, they bitterly complained and resisted doing this. The Labour Government allowed farmers to work with officials to prepare a plan to reduce emmissions. When the plan was announced in 2022, the Government had made some small changes to prevent all farmers doing nothing and paying nothing. This was greeted with false and misleading statements in the usual way and there was another farmer protest.
Farmers arranged with National Party politicians for shares in taxpayer owned electricity Companies to be sold so that hundreds of millions of dollars could be used to pay for privately owned irrigation schemes. They did not care that the rest of the community lost the 15% annual returns from the shares that were sold and their electricity costs greatly increased. Farmers would have made huge capital gains but a Labour led Government stopped the scam.
Farmers know that there will always be droughts, floods and snowstorms but, instead of being insured or well prepared for them, they have arranged with public servants and politicians to give them taxpayer handouts whenever one of these events occurs. Wealthy farmers are in a better position than anyone else to deal with bad luck situations so why are they the only ones to get handouts?
A considerable amount of taxpayer money is put by politicians into research to help farmers improve production and make higher profits. Other business sectors do not receive this assistance.
In the past farmers arranged for taxpayers to top up their incomes and provide them with all sorts of subsidies. They also arranged for taxpayers to pay for the clearance of bush from the steepest and least accessible parts of their farms. This has resulted in hill country erosion and the silting up of streams and rivers with the consequent flooding of downstream communities. Now taxpayers and ratepayers have to pay for higher and higher stop banks and to try and reverse the damage.
Farmers and other well off people use trusts to hide their assets and incomes and to avoid paying tax. They and their families get Government payments and benefits which they would not otherwise be entitled to. Most Members of Parliament also have trusts for similar reasons so they have no interest in trying to prevent the loss of billions of dollars through this type of scam.
Regional councils are supposed to protect the environment but this would involve costs to farmers and so would reduce the capital gains on farms. Consequently, farmers have taken control of Regional councils by getting farmers and rural business interests elected to them. As there are far fewer rural voters than urban voters arrangements were made with public servants and politicians to pass legislation under the Local Government Act which allows rural votes to be worth more than urban votes. This has resulted in some rural votes being worth three or four times what an urban vote would be worth. In Canterbury, urban voters became concerned that farmers were contaminating and destroying rivers and underground drinking water supplies so they started voting for councillors who would prevent the situation getting worse. Farmers became alarmed that they would not be able to make huge capital gains from new irrigation schemes so they arranged with National Party politicians to get rid of the elected councillors and replace them with people who would encourage the gold rush for water. Constitutional lawyers and other experts condemned this as being against the rule of law and fundamentally wrong.
Resource Consents issued to urban residents are strictly enforced by local councils but, because farmers control Regional Councils and decide who gets prosecuted, the majority of farmers are able to get away with not bothering to comply with Resource Consents. The result is an increasing amount of environmental damage.
Urban residents are going to have to pay for the increasingly high costs of trying to deal with contaminated drinking water. High water rates will be used to discourage them from using water and to encourage them to spend thousands of dollars on rainwater tanks and pumping systems to water gardens. Some Councils will have to create alternative water supplies at a great cost to ratepayers. None of the many additional costs caused by farmers will be paid by them.
New Zealand had an independent Food Safety Authority but that did not suit farmers so they arranged for it to be replaced with a rural industry controlled organisation that is mainly funded by taxpayers. New Zealand has the highest rates of bowel cancer in the world and a Danish study of 2 million peple over 20 years showed that nitrates from fertilisers and animal effluent cause increased risk of bowel cancer at one tenth of the limit allowed here. Lobbyists and public servants then arranged for taxpayer money to be used to pay non experts to write a report to try to discredit the Danish study. The Ministry of Health had set up a committee so that Professor Michael Baker and other epidemiologists from Otago University could investigate the problem of nitrates in drinking water but that did not suit farmers so they arranged for the committee to be disbanded.
When the Labour Government proposed its three waters reforms that would result in large urban communities helping to pay for the replacement of badly neglected water infrastructure in small rural towns, this was opposed by farmers. Despite the prospect of paying lower rates, it appears that they were concerned that rural towns would be made to conform to much higher drinking water standards.
All the above is the result of the lobbying of public servants and politicians by farming organisations.
