Is NZ and UK farming poles apart?

01-09-2008 | Contributor

One of the most evident and astonishing differences when farming in the UK are the regulations farmers and landowners need to work with. In England the regulations are far more advanced than what we currently have in NZ. For example, you even need planning permision to remove a hedgerow.

While some of the regulations at face value seem ridiculous, they are nevertheless in place and affect the way farmers operate and make decisions.

Nothing is more certain than change and with the rapid changes we have seen in the global market-place over the past 10 years, it is something we need to monitor and analyse with great interest.

The implications these regulations may have on our land, farming practices, businesses, the consumers' perceptions and ultimately the NZ economy may be immense.

For example, just consider the carbon issue at present. Who would have thought even five years ago we would have a carbon liability from agriculture of $500 million/year to meet!

Although we are not paying this ‘tax' at present, over US$64 billion of carbon was traded in Europe last year. The reality is that it is coming and for the average farmer in NZ, it is likely to cost the business $15,000/year (based on current carbon values).

My travels to date have been through England and Scotland and I must say the scenery in Scotland is wonderful, especially the highlands.

My first impression of the English countryside was a little different. It wasn't until I got well north of London and near the Scottish border that I saw animals grazing. I also found it amazing that there were only a few small paddocks separating villages and these were either in crop or had just been left to grow weeds!

Bumping into some family friends I got the opportunity to see a farm and how a farming family have moved with the times to maintain a profitable farming business while also meeting strict regulations.

I found that town folk are allowed to take their beloved pets (dogs) for a walk without a leash over your property, even if you have ewes and lambs in a paddock that could easily be mis-mothered. Imagine the ruckus this would cause in my home town of Taihape!

The property I visited is a 1100ha mixed cropping property owned by Paul & Sarah (Owmby Cliff Farm). The soil is a mixture of limestone "brash" running through to a heavy clay loam.

All fields are a mixture of soil types providing a complicated challenge to land operations and crop establishment. Predominantly limestone in nature, the farm is very drought prone (I know - seems hard to credit).

Irrigation, provided by either borehole or winter fill reservoir, is essential to achieve quality and reliable yields.

The business was built up by Paul's entrepreneurial father to be over 4000ha at one stage. Unfortunately, over-working led to his early death in 1979. By 1989 the farm had been sold down to 1000ha of which 240ha was on a short term rental.

The business was subsequently divided down to the next generation and Paul took on 388ha. Following in his father's footsteps, Paul has made a number of capital expansions with the purchase of three additional properties bringing the total farm business area back to 1100ha.

The current cropping programme is based on potatoes and onions. The property is classified as either heavy or lighter land with the majority of the farm being the latter of the two.

There is an eight-course rotation used on the lighter areas; peas (for harvesting fresh), wheat, oilseed rape or onions, wheat, potatoes, wheat, oilseed rape and wheat. The farm is split into separate blocks to plan and manage the crop rotations more effectively, over the long term.

This eight-course rotation allows for flexibility in the system with management able to introduce new crops whilst maintaining sustainability.

The heavier land is rotated around winter barley, oilseed rape, wheat, beans and wheat.

In addition, Paul has a policy of outsourcing land each year for potato crops so they can retain clean land on the home farm.

The yields on the farm have plateaued with averages of wheat 8.5t/ha; potatoes 45t/ha; oilseed

rape 4.0t/ha; onions 44t/ha; vine peas 5t/ha; beans 5t/ha, and spring barley 6.5 t/ha.

"We are now extremely cost-conscious and fighting what sometimes feels like a losing battle. We can, however, now manage and work the combinable side of the business with just one tractor working 24 hours a day," Paul says. It makes you think hard with 840ha - one machine and two staff!

Paul's principle objective is to maximise the return from every enterprise and fortunately all the produce can be stored for a full season (except onions which are marketed until the end of January) with sales being a mix of open market and contracts.

The commodity crops grown are established and managed at least cost with close attention to cultivation techniques.

With a large investment made in storage facilities, Paul is fully aware of the need to generate income from all assets.

This may include the storage of grain, providing added value cold storage or chilling services, or operating previously unproductive grassland with a new deer enterprise. In addition, relationships and commitments made with long-term customers are given a high priority.

Conservation in the form of tree and hedge planting has been an important feature in recent years, with 16.5km of new hedges planted, together with significant areas (6.5ha) of new trees.

The business plan Paul has implemented involves the following:-

• Produce high quality goods by maximising their technical and practical capabilities

• Position as close to the consumer and higher value markets as possible

• Do what they do better each year

• Reduce costs of production

• Keep accounts and records simple.

On asking Paul about the regulations faced by farmers he simply says regulations for farming are a long topic as there are times when the red tape dampens all enthusiasm.

He cites the example of needing planning permission to take out a hedgerow now!

However the regulations are all linked to the balance of an overcrowded island (compare 249 people/km2 to NZ at just 15/km2) and as such set a framework that also serves to protect, he says.

Paul says he is "not a big fan of subsidies as clearly they distort the markets, however, I am realistic enough to realize that by being as close to Europe as we are, we need to be in the club that forms such a big part of our market".

"We would not survive without that association and so as long as CAP (Common Agricultural Policy) exists, we must operate to benefit from it. Our business would not have survived up until last year, growing the crops we did, without subsidies as they accounted for the profit generated by the farm.

"In saying this, we have employed policies that have allowed us to farm profitably given the market signals and directions.

"If the subsides had not been in place, the market would have been entirely different (even for those crops with no link such as potatoes and onions) and we would have operated different policies to generate a profit.

"We have survived and grown our business by supplementing cropping income (and the subsidies received for this) with shed rentals, grain drying, property lets etc."

Paul and Sarah's plans for the future include further shaping the business to be leaner and more financially independent. He can see closer association with his customers and even his neighbours.

Paul is always looking at a better way of doing things and to capturing opportunities as they arise.

It is interesting to note that a key to Paul and Sarah's business growth is that of being able to be adaptable at all times. It is something New Zealanders have done very well and will no doubt have to do more of as we face new and tougher regulations in the future.

We are a young country relative to the UK and Europe. This is evident from the several thousand-year-old buildings and churches I have been visiting and taking photos of!

We also have a much smaller population and a smaller ratio of urban to rural populations. This has been one of the main reasons there are so many hoops landowners have to jump through to take a hedge down in the UK.

As NZ grows and we continue to try to meet the end consumers' needs, we may find we are led down a similar path with respect to regulations. As a percentage of total production, we export far more primary products than any other country.

This being the case we have to identify with the issues of these markets (however illogical they may seem) to ensure we continue to be granted access. Working in our favour, we have time and the ability to analyse previous regulations from around the globe to discover what works and what doesn't.

We also have some assests that set us apart, such as biosecurity and isolation. It is incredible what you can get through the borders from the UK to Europe - it is only metal objects and illegal substances that are of concern. You can bascially take any sort of food with you.

There are many contrasts in the UK such as subsidies for agriculture, not to mention the water flowing in the opposite direction down the drain.

There are vast differences in our cultures and food, however, we all share the same similarity of living our lives to make each day count and the future a better place for our children.

I guess my conclusion to this is that we are not really poles apart, rather we are all adapting to the influences around us as best we can.

As primary producers in NZ we have some amazing advantages over our UK counterparts that will assist us with future competition and market demands.

Like Paul and Sarah we need to continue to consider the issues influencing farming in NZ and adapt as they change.

So, where to from here? Well I'm off to enjoy a summer in Europe. I hope you have a smooth spring calving and lambing.

However, in your busy lives do take time to think about current and possible regulations (both at the regional and national level) and the effects on you, your business, community and the country.

Being prepared and adaptable will enable you to maintain your profitability and the growth of your business.

• Rachel Rogers is a dairy farm consultant with Sheppard Agriculture, based in Dannevirke.

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