Expressions
In DII’s regular column, an industry figure airs personal views on a variety of subjects.

In the various agricultural journals we read that farmers are finding the going tough, with average bank borrowings escalating skywards. Some milk producers are learning to cope with lower milk prices but claims that more and higher subsidies are needed tend to lead one to believe that the basic food production industry is all but bankrupt.
But can we blame this on the Green Pound and the strength of sterling, and is it really just a matter of adjusting our exchange rates and all will be well? I think not. For the dairy industry, it is a fundamental question of restructuring at farm and processing levels with both centres of activity needing to reduce costs, change production methods and get larger.
Unless smaller producers can increase production they should move aside, cash in their milk quota and do something else. Smaller dairy companies must, in turn, improve their efficiency by way of economies of scale. This can be achieved by joining with other units or selling out.
For too long, politicians have been convinced by vested interests that our population will go hungry if farmers are not subsidised and prices of basic commodities kept high. As such, farmers have been encouraged to produce more and more at ever increasing prices.
But the risk of food shortages has long since passed and, indeed, we have been suffering for the past 20 years or more from surpluses. So why have the politicians not changed tack? How much does it really cost to produce a litre of milk? And what is the price below which milk producers will really stop production and milk supplies will go down? I would like to debunk some of the farming myths using real figures for the costs of production.
In-depth and recent research based on Genus data, taking into account declining animal food and fertiliser costs, indicates a price of around 14-15ppl, which would include a reasonable profit. If cull cow and calf prices increase this figure would be lower.
So what are the whingers talking about when they complain about getting 19-20ppl? We are all living in a more competitive world. What is so special about farmers that they can only live with handouts? If they do not want to produce milk at real market prices let us import it from countries that will.
Come back New Zealand, all is forgiven.