Farm subsidies.. Yay or nay

[Bossfarmer]

TT agree we are probably better off without however from what I can tell the SMP subsidies only lasted from 1978 until 1984 . The main subsidies came in the form of govt funded research and processing and logistic infrastructure.

By letting the market take its course as we have done for over thirty years has led to some major structural issues in NZ ag and the wider economy. Its become a rush from one sector to another . First and mostly it was dairy but now with the world well supplied with milk powder and the true enviromental foot print of grass based intensive dairy becoming known its now a rush to hort (cherries , kiwifruit) and forestry . The traditional sheep farm still exists but that production system is not viable on the current land value.

We need govt intervention to get new industries up and running .For example in the South of NZ we have a traditional oat growing industry , the next step for this is oat milk products but no one can seem to get the capital together to get this off the ground.

So to summarise if you asked a 65 year old sheep farmer (there are many) who survived the late eighties and then saw there $250000 farm become worth $5million due to the dairy boom then they probaby they are very pleased the way things have turned out.

If you ask a struggling started from nothing young farmer (no family help) who is about to be hit with a lot of enviromental restrictions and regulation in return for not one cent from the govt then their views may differ.

so removing subs has had the opposite effect on land values to what many on here expect......

 

[Bossfarmer]

I find myself reluctant to go to my tractor main dealers more and more.
It annoys me that every time I go, they give the impression that they want to deal with bigger and bigger farmers. The yard is stuffed full of tractors and machinery that is far too big for us.
On top of which, I know the owner spends an absolute fortune on shooting each winter. No wonder he shut down all but 2 of his depots.

Why have they got like this? Because they want your subsidy money.

Further encouraged by the manufacturers building bigger and bigger kit with gizmos that aren’t needed, attempting to fool us all that we cannot be efficient if we don’t have them.

The times I have heard recently that a farmer couldn’t drill because his self steering developed a fault. What the feck is wrong with his arms and the steering wheel?

subsidy money? most of the farmers i know running the big fleets of modern kit are either contract farmers or big veg/potato guys not the biggest subsidy recipients in the area, these guys rent land all over but dont own much

 

[Hfd Cattle]

subsidy money? most of the farmers i know running the big fleets of modern kit are either contract farmers or big veg/potato guys not the biggest subsidy recipients in the area, these guys rent land all over but dont own much

And most of them don't own their kit it is all on lease hire or some such agreement ....my kit may be old but at least I own it !!

 

[Bossfarmer]

Farmers can and do work for a loss due to subsidies producing beef that suppresses the market.
If you take away subs then there would be a dramatic reduction in supply. Supply would in time balance with demand at a fair market price.

this is both laughable and naive and exactly why the scottish government are proposing a £250/calf headage payment to replace the current £100/calf payment as breeding cow numbers are falling year on year due to poor margins so no there is NOT too much being produced, a critical mass needs to be retained to prevent infrastructure closing down markets/slaughter houses etc, all that producing less ourselves is achieving is more and more irish beef displacing or own each year produced cheaper with higher subsidies

 

[Two Tone]

subsidy money? most of the farmers i know running the big fleets of modern kit are either contract farmers or big veg/potato guys not the biggest subsidy recipients in the area, these guys rent land all over but dont own much

What is the proportion of the contract farmers/veg growers to the farmers In your area?
Pretty small in this area and certainly not big customers of my tractor dealer, because they don’t sell Fendt!

 

[lloyd]

Country abuse has just started on TV
so careful what you wish for

 

[Stan Hay]

so removing subs has had the opposite effect on land values to what many on here expect......

Obviously cheap credit has led to land values inflating globally in the last 25 years .
But the dairy boom (now bust ) was able to happen in the deregulated , govt hands off environment we had in the 90s and 10s. Like I say we are now entering a hands on period and its not going to be pleasant with the massive debt loadings common in NZ ag.

 

[Doc]

its complete ignorance from the government, why dont they lower the uk minimum wage and tell the public to be more efficient with their expenditure

Que?
Have I been teleported to a 1980’s sitcom?

 

[digger64]

this is both laughable and naive and exactly why the scottish government are proposing a £250/calf headage payment to replace the current £100/calf payment as breeding cow numbers are falling year on year due to poor margins so no there is NOT too much being produced, a critical mass needs to be retained to prevent infrastructure closing down markets/slaughter houses etc, all that producing less ourselves is achieving is more and more irish beef displacing or own each year produced cheaper with higher subsidies

have you tried booking any fat cattle into the slaughter house lately ?

 

[Dave645]

have you tried booking any fat cattle into the slaughter house lately ?

The problems don’t get fixed by sub, I can nearly guarantee that consumers are paying the exactly the same price for beef, while the farmer is taking a hit. So increasing subs, takes the guilt out of the middle men’s greed. But benefits the consumer not one jot. In fact they pay twice.
This is why it’s not money the farmers need long term but, a better relationship with the consumer and the supply chain.
No one regulates the supply chain. Not over price.

While the short term fix may be needed with increasing payments it doesn’t fix the underlying issues, over supply, imports, greed, etc.
The problem is these types of problems are nearly impossable to tackle. So sub payments step in. More as a band aid that a solution. In fact they can give the middle men more confidence knowing that the state will bail farmers out so why worry about paying a fair price?

 

[Kiwi Pete]

Stop buying them then!

"you cannot be serious"

 

[Kiwi Pete]

so removing subs has had the opposite effect on land values to what many on here expect......

No, merely time has done that.
Capital gains here are fairly high, probably similar increases recently to UK land prices - and largely due to the same reasons, people with the means like to have some

Up where @FonterraFarmer is, the urban sprawl is pushing land prices beyond what farming can afford to pay, well, conventional farming at least, as the returns are what they are.

I'd rather sh!t in my hands then clap, than be a conventional farmer .

 

[Bossfarmer]

What is the proportion of the contract farmers/veg growers to the farmers In your area?
Pretty small in this area and certainly not big customers of my tractor dealer, because they don’t sell Fendt!

theres a few now, most of the owner occupiers that just farm their own ground just tend to buy 2nd hand like myself, cant justify 100k tractors for a bit silage and cereals

 

[Bossfarmer]

Obviously cheap credit has led to land values inflating globally in the last 25 years .
But the dairy boom (now bust ) was able to happen in the deregulated , govt hands off environment we had in the 90s and 10s. Like I say we are now entering a hands on period and its not going to be pleasant with the massive debt loadings common in NZ ag.

could there be a lesson to learn for the UK here, world commodity prices are extremely volatile, farming without support leads to a lot of jumping in and out of sectors as prices change then that sector is oversupplied it doesnt make for a sustainable industry especially looking at their debt levels and the mass slaughtering of dairy cows in Oz a couple of years back

 

[cows sh#t me to tears]

could there be a lesson to learn for the UK here, world commodity prices are extremely volatile, farming without support leads to a lot of jumping in and out of sectors as prices change then that sector is oversupplied it doesnt make for a sustainable industry especially looking at their debt levels and the mass slaughtering of dairy cows in Oz a couple of years back

What do you call a few years back. I've been milking for 30 years and the only increase in cow cull rates are due to prolonged drought and an extreme spike in input prices....also due to drought....

 

[holwellcourtfarm]

Obviously cheap credit has led to land values inflating globally in the last 25 years .
But the dairy boom (now bust ) was able to happen in the deregulated , govt hands off environment we had in the 90s and 10s. Like I say we are now entering a hands on period and its not going to be pleasant with the massive debt loadings common in NZ ag.

The ghost of Michael Cullen. Oh, hang on, He's not dead yet

 

[Two Tone]

theres a few now, most of the owner occupiers that just farm their own ground just tend to buy 2nd hand like myself, cant justify 100k tractors for a bit silage and cereals

Yes, I know what you mean. I'm not sure if we will ever buy a brand new tractor again. It is more likely to be 2nd hand, but it still won't be a Fendt!

The last new one we bought was one of the last 2000 series Fastracs in 2014. Our other mainline tractor, a NH 7050 in 2010 has been so reliable, I daren't sell it, even though we only expected to keep it 5 years.

But one of the reasons why is because we have two much older working classics that do all the little jobs that don't need the high HP and keeps their hours low.


This idea wouldn't fit well with what AHDB is trying to teach 50-year-old farmers about tractor running costs @ajd132 . But the reality is it keeps our running costs well down as well as having the pleasure of using the working classics, which we can fix without needing a main dealer.

Everything is now bought and paid for, the finance on the mainline tractors finished long ago and the working classics are actually going up in Value!

This is to some extent offsets fooling the Balance Sheet that we are not investing in brand new machinery. But until we know what will happen, post-Brexit and post-BPS, I'll continue with this system that keeps us well tooled up, but very cheaply and with very low maintenance costs.

 

[ajd132]

Yes, I know what you mean. I'm not sure if we will ever buy a brand new tractor again. It is more likely to be 2nd hand, but it still won't be a Fendt!

The last new one we bought was one of the last 2000 series Fastracs in 2014. Our other mainline tractor, a NH 7050 in 2010 has been so reliable, I daren't sell it, even though we only expected to keep it 5 years.

But one of the reasons why is because we have two much older working classics that do all the little jobs that don't need the high HP and keeps their hours low.


This idea wouldn't fit well with what AHDB is trying to teach 50-year-old farmers about tractor running costs @ajd132 . But the reality is it keeps our running costs well down as well as having the pleasure of using the working classics, which we can fix without needing a main dealer.

Everything is now bought and paid for, the finance on the mainline tractors finished long ago and the working classics are actually going up in Value!

This to some extent offsets fooling the Balance Sheet that we are not investing in brand new machinery. But until we know what will happen, post-Brexit and post-BPS, I'll continue with this system that keeps us well tooled up, but very cheaply and with very low maintenance costs.

Yes I agree, all our main kit is now bought and paid for (apart from one combine payment). Nothing older than 2013. Sorted for a while.

 

[Bossfarmer]

Yes, I know what you mean. I'm not sure if we will ever buy a brand new tractor again. It is more likely to be 2nd hand, but it still won't be a Fendt!

The last new one we bought was one of the last 2000 series Fastracs in 2014. Our other mainline tractor, a NH 7050 in 2010 has been so reliable, I daren't sell it, even though we only expected to keep it 5 years.

But one of the reasons why is because we have two much older working classics that do all the little jobs that don't need the high HP and keeps their hours low.


This idea wouldn't fit well with what AHDB is trying to teach 50-year-old farmers about tractor running costs @ajd132 . But the reality is it keeps our running costs well down as well as having the pleasure of using the working classics, which we can fix without needing a main dealer.

Everything is now bought and paid for, the finance on the mainline tractors finished long ago and the working classics are actually going up in Value!

This is to some extent offsets fooling the Balance Sheet that we are not investing in brand new machinery. But until we know what will happen, post-Brexit and post-BPS, I'll continue with this system that keeps us well tooled up, but very cheaply and with very low maintenance costs.

what sort of older classics are you running?

 

[Bossfarmer]

What do you call a few years back. I've been milking for 30 years and the only increase in cow cull rates are due to prolonged drought and an extreme spike in input prices....also due to drought....

2016