New Zealand's drought gets worse

Declaring a drought is a political decision which allows farmers to get government assistance and only happens when things get very dire indeed.

No end in sight

Drought declared in South Island
Large parts of the South Island have officially been
declared in drought.

Radio NZ,

12 February, 2015

Large parts of the South Island have officially been declared in drought.

The drought declaration was made by the Primary Industries Minister Nathan Guy this morning as he visited farmers in South Canterbury

Canterbury farmer David Williams' Opuha Dam property where Mr Guy made the announcement   Photo: Sally Murphy / RNZ

The declaration covers parts of Otago, Canterbury and Marlborough which have experienced record dry conditions for most of the summer.

Dairy farmers, already struggling with a record low milk price, have been particularly hard hit.

The drought is being described as a medium-sized adverse event.

Mr Guy said the South Island has had its driest January in 43 years.

He said the announcement comes with an extra $200,000 for rural support trusts to provide grants to farmers and tax breaks for those who need them.

"If you look at what's happening with rural fires, they're just popping up all over the place at the moment, it's a real concern. We've taken into account all the economic and social factors, and feed availability."

Nathan Guy said farmers will also be eligible for Work and Income benefits, although he doubts many will need that sort of help.

Regional drought status   Photo: Ministry for Primary Industries

The declaration means the Government will provide extra funding to rural support trusts who could in turn help farmers in need.

The support will available over the next few months and can be accessed through Work and Income office.

Mr Guy said the Government was also keeping a very close eye on Wairarapa and southern Hawkes Bay, which are also suffering from very dry conditions.

Federated Farmers South Canterbury president Ivon Hurst said farmers there will welcome the drought declaration.

He said as far as they were concerned the region had been in drought for two months already, but the declaration at least brings official recognition of the conditions.

And he said there were other benefits too:

"Where there might be an advantage, is where farmers are going to bankers with their accountants, to talk about securing winter feed with reduced incomes and having to buy it in, because that's exactly what's going to have to happen, particularly in the dairy industry.

"They won't have to get down on their knees to beg for recognition. They will know that because the Government has recognised the situation that in fact it does exit."

Mr Hurst said rain in South Canterbury in the past week brought some light relief and perked up winter feed crops, but was nowhere near a drought breaker.

Rainfall deciles    Photo: NIWA

Prime Minister John Key said there is no doubt the very dry conditions have been hitting some hard.

But, he said: "On the other side of the coin our farmers are immensely resilient. They've faced these conditions before, they've faced floods before and all sorts of other climatic conditions, so they are very good at hunkering down and they will again but we need to give them the support we can."

There are three levels of 'adverse events' - localised, medium and national. These can cover events like drought, floods, fire, earthquakes and other natural disasters.

The criteria for assessing the scale of an adverse event are:

• Options available for the community to prepare for and recover from the event
• Magnitude of the event (likelihood and scale of physical impact)
• Capacity of the community to cope economically and socially impact.

Listen to more on Checkpoint ( 2 min 49 sec )

Slump in farmer confidence 'not surprising'

Federated Farmers says a slump in farmers' confidence is not surprising, given the drop in milk prices and the on-going dry conditions

Radio NZ,

9 February, 2015

Its Farm Confidence Survey, taken last month showed that nearly 80 percent of dairy farmers expect their income to drop from last year and livestock farmers generally are more pessimistic about the economy and farm profitability.

However, over 20 percent of farmers did expect to increase production over the coming year.

Federated Farmers president Dr William Rolleston said a drop in income was expected off the back of last season's record payout.

"It does have to be remembered that we had a record payout in the dairy sector last year and so if you like there was only one way to go and that was for prices to come off, but I think that the outcome of the survey reflects there was a significant fall in dairy prices over the last year, almost 50 percent."

Dr Rolleston said the dry across eastern parts of the country was affecting both dairy and sheep and beef prices.

He said a higher than usual dairy cull cow kill had increased supply at meat processors, which reduced prices.

"It's always a problem with a drought, for sheep and beef farmers it's that everybody needs to quit stock at the same time and that tends to push prices down, just normal supply and demand, and the tougher thing for sheep and beef farmers is that when they go to re-stock of course everyone else is wanting to re-stock as well and that pushes prices up, so they sell on a down market and have to buy on a high market, which is particularly tough.

"The issues with the drought are not just that it's tough now, it's actually going to be tough particularly if we don't get significant rain in the autumn, it will be tough feeding animals towards the end of winter but also that re-stocking is where the financial pinch really comes in."

Mr Rolleston said the highest priority for a quarter of farmers surveyed was government regulation and compliance costs.