CREATING HEALTHY RURAL COMMUNITIESWhen Michelle Thompson became head of the Rural Health Alliance Aotearoa New Zealand she never imagined her number one issue would be a technological one – but connectivity and rural health go hand in hand.

“Connectivity came to the fore very quickly as a key issue facing rural New Zealand that has implications for health and wellbeing… it’s about enabling rural people to live well and operate effectively,” she says.

“Apart from opening doors to telehealth and video conferencing with your GP or counsellor as an interim measure, it’s also important for health and safety” and while this has been highly publicised, Thompson would like the government to focus more on the health side of the equation.

“Healthy, happy, well-rested people make better decisions and are far less likely to make a mistake at work and have an accident. It’s a no brainer.”

Connectivity and improving mental health are the equal top priority for RHĀNZ, and are intrinsically linked. “Connectivity goes a long way to minimising that sense of isolation…it allows people to become part of a bigger network.”Things like access to friends and family, social media, searching for information, even uploading or downloading a simple form, are near impossible without reliable internet.

“If you can’t operate digitally, you get penalised and government departments don’t make much allowance for people who live rurally.”

Then there’s the problem of an aging rural health workforce with the average age of a rural GP of 58 years.

“It’s about advocating to government that rural starts claiming its fair share of resources. It is estimated we need at least another 1000 GPs, but they are training the wrong people. The graduates don’t want to live in rural New Zealand.”

But RHĀNZ have a plan for this. “Overseas, the biggest success factor in retaining rural health professionals is that they have a rural upbringing and their training is done rurally. If you keep them rural retention is much higher.”

“RHĀNZ can help here as we can offer placements rurally and use member organisations to ensure they have a fabulous time and see rural, New Zealand as a wonderful place to live.”

GOVERNMENT’S BOLD NEW NETWORK TARGETSThe government recently announced an ambitious new target for rural broadband; they want 99% of all Kiwis to be able to access broadband at peak speeds of at least 50 Mbps in 10 years’ time. The remaining 1% would be able to access speeds of 10 Mbps, a massive increase on the current Rural Broadband Initiative (RBI) target peak speeds of 5 Mbps.

Thirty-nine hospitals and integrated family health centres identified by District Health Boards for the RBI are already connected to fibre capable of peak speeds of at least 100 Mbps.

Budget 2015 set aside $360 million for connectivity, $100 million will be used to expand the Rural Broadband programme and $50 million goes to a Mobile Black Spot Fund.

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RURAL SNAPSHOTISSUE 11 • FOR THE QUARTER ENDING DECEMBER 2015

• Established May 2012

• 38 member organisations

• Represents a united voice from across multiple rural sector organisations

• Aims to provide solutions and influence policy affecting the health and wellbeing of rural communities.

What is Rural Health Alliance Aotearoa New Zealand (RHĀNZ)?

IN THIS ISSUE1. Creating healthy rural communities2. Government’s bold new network targets3. Leading the rural network revolution4. Better beef5. Sheep and beef6. Dairy7. Horticulture8. Research9. Politics10. Wool11. Deer12. Coming and goings

2 RURAL SNAPSHOT • ISSUE 10

LEADING THE RURAL NETWORK REVOLUTIONIn 2011 Vodafone partnered with the government to deliver the Rural Broadband Initiative (RBI), with a goal of delivering fast and reliable broadband and better mobile coverage to rural New Zealand.

Vodafone began building a rural network that would deliver a future-proof solution, providing fast, reliable broadband and mobile coverage to places that wired networks couldn’t reach cost effectively. Huge progress has been made. By early 2016 more than 112,000 square kilometres of rural New Zealand will be covered by Vodafone’s broadband and mobile network. But they’re not stopping there as they head towards reaching more than 99% of places where Kiwis live, work and play.

“Providing high speed broadband and mobile coverage everywhere where rural people need it is our mission. We want to establish well connected communities to improve social and economic benefits, as well as driving significant opportunities to agriculture through technological innovation,” Vodafone Consumer Director Matt Williams says.

“Our 4G Extended network is rolling out across rural New Zealand and enables us to deliver coverage and connectivity to those typically hard-to-reach places.”

“With greater adoption of 4G we are seeing benefits such as faster access to real time data applications in the cloud. A recent collaboration with Xero and Figured On Farm is allowing farmers to gain a greater understanding of the future economic output of the business - something the banks are keen to see in the current climate.”

Vodafone is currently working on the second part of the RBI. They expect a further 72,000 square kilometres of rural New Zealand will be covered by their broadband and mobile network – taking the total to 184,000 sq km. That would mean over 70% of New Zealand’s land mass would have access to 4G superfast broadband and mobile technology.

BETTER BEEFA superior eating experience every time, guaranteed. That’s the promise Silver Fern Farms Beef Eating Quality (EQ) makes to the consumer.

Running for just over two years, the Silver Fern Farms (SFF) Beef EQ system uses seven measurements to identify premium animals that make the cut, literally.

SFF Agribusiness Manager Greg McSkimming says it is New Zealand’s first integrated beef value chain. “The beauty is it guarantees a product in the market that we can extract a premium for. In turn, we reward the farmer for producing it.”

Animals that hit target specifications attract a 25c/kg premium over and above whatever the schedule or contract price is at the time. Using a “robust and scientifically formulated process”, they can determine meat eating quality.

Seven measurements for quality:

• Grade and carcase weight range• Fat colour• Meat colour• pH• Marbling• Ossification (the rate cartilage converts to bone – an indicator

of stress/tenderness)• Rib fat

Chefs working with Beef EQ product know they are serving a steak with superior flavour, taste, tenderness and juiciness – every time. “We can put a guarantee on the product; if you’re not satisfied, bring it back.”

SFF is working with farmers to help up their hit rate. Whilst many factors influence whether an animal makes the cut, one of the biggest influencers is how it has been managed and handled.

“Good quality animals in, good quality product out,” he sums up. “It’s simple really, but the key is the measurement system in the middle. It’s pass or fail, there’s no inbetween.”

The real opportunity is in winter finishing, McSkimming says. “We’re looking for farmers who can winter finish beef. There are huge opportunities for premiums.”

In order to grow the high-end value-add market volumes SFF must front up and consistently supply premium animals all year round. “We need a 12-month model.”

Primarily a sheep and beef property with some smaller scale hydro and tourism operations, Omarama Station also has scientific reserves and Department of Conservation and QEII Trust covenants on the property.

DAIRYWhat can you say about SAFE? Their pilgrimage seems to be one converting us all to veganism, to ruin an industry and destabilise the entire New Zealand economy. All because of the appalling actions of a year. Does extremism work? - not really so this will pass.

The dry has spread to the south of Canterbury, and average pasture growth rates in the dry east coast of the South Island still lag well behind the average, reinforcing the chances of a serious summer drought, interest.co.nz reports.

Many areas of the North Island have had a great spring with most regions achieving pasture growth rates ahead of normal, allowing plentiful surplus pasture to be harvested and good establishment of summer forage crops.

Will the slight recovery in dairy prices be enough for Fonterra to reach the $4.60/kg MS payout? Time will tell.

RURAL SNAPSHOT • ISSUE 10 3

SHEEP AND BEEFThe El Nino threat is playing havoc with lamb prices, as farmers start weaning and look to get rid of lambs before prices tumbles further. The price so far has been disappointing, particularly as processors had suggested $100/lamb was likely early season.

Lamb schedules are still looking for the bottom as weak frozen demand curtails sustainable pricing and dashes any hopes for a better price season. Interest.co.nz reports this despite the fact that the lamb crop is the smallest in 60 years.

Weaning started on the early flocks with export, saleyard and local trade prices all at least $10/head behind last year, with further falls likely.

The south east South Island has got dry, in line with expectations, and dryland strikes of summer forages are patchy where soil moisture is limited. On the other hand eastern areas of the North Island report a great spring with well-timed heavy rains keeping feed levels adequate.

Few store lambs have been traded, but a week of dry winds could see a rapid destock in at-risk areas, and prices could soon be under more pressure. An earlier than normal Easter cannot come soon enough for the revival of the chilled demand, however with price and volume negotiations underway, some cautiousness is evident on the back of the frozen products’ demise, and strong competition from Australian exporters, interest.co.nz reports.

There have been further falls in the beef schedule, but reports that US prices are stabilising and in Australia kill tallies have dried up and some plants have closed early or reduced shifts, are good news for New Zealand exporters.

Earlier exporter optimism of Chinese demand for beef has wilted, with extra volumes filtering through the ‘grey channels’ via Hong Kong.

Saleyard prime animals have also fallen quickly in price on the back of export and local trade falls, and are now at prices similar to last year, interest.co.nz reports.

Chinese company Shanghai Maling has invested $261 million in meat processor Silver Fern Farms (SFF), for a 50% shareholding. The deal received strong backing from shareholders, with 67% of eligible shareholders voting, 82.22% of those in favour. Chairman Rob Hewett described the vote as a game changer and vowed the cash injection would be used for positive things like investing heavily in SFF’s Plate to Pasture value-added strategy.

The government blocked the sale of iconic Lochinver Station to the Chinese, but in the end the station stayed in New Zealand hands, selling to Kiwi farming group Rimanui Farms. No price was disclosed for the 13,843 hectare sheep and beef station, but Shanghai Pengxin had agreed to pay $88 million for the property, which would have added to an existing portfolio that includes the former Crafar farms. That sale was approved by the Overseas Investment Office only to be vetoed by the government.

Beef + Lamb New Zealand (B+LNZ) will continue to exist after the industry-good organisation received a clear endorsement from farmers in its levy referendum. Under the Commodity Levies Act B+LNZ is required to get a new mandate from its levy payers every six years.

North Otago red meat producers Richard and Annabelle Subtil, of Omarama Station, have taken out the Lincoln University Foundation’s South Island Farmer of the Year competition. For the first time ever, the win went jointly to two entrants - the Subtils and a Marlborough green-lipped mussel grower.

At its AGM in the Waikato Fonterra affirmed its guidance for the 2016 milk payout to farmers, although chairman John Wilson says it is dependent on global dairy prices rising in the first half of next year from current unsustainable levels, Businessdesk reports.

The world’s largest dairy exporter has forecast a farmgate milk price of $4.60/kg MS for consistency and a cash dividend of 35-40 cents per share for a total payout of $4.95/kg MS to $5/kg MS.

Fonterra has faced a challenging year globally with low dairy prices and a continued imbalance in supply and demand, which had a strong effect on the 2015 payout, Wilson told shareholders at the AGM.

The dairy co-op also looks destined to have a smaller board of directors in future.

A proposal by former respected directors Greg Gent and Colin Armer to proscribe a reduction to six farmers and three independents received 54% approval, with about 70% of farmers casting their votes before the AGM.

It fell short of the constitutional 75% requirement to be binding, but the support level will make it impossible for the board and Fonterra Shareholders’ Council to ignore that farmer sentiment, Farmers Weekly reports. Analysts are now predicting the dairy turnaround may not start until next year when the global market realises the implications of New Zealand’s lower export volumes and will need to compete to secure supply.

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ISSUE 11 • FOR THE QUARTER ENDING DECEMBER 2015

The dairy future prices appear to have bottomed and are moving upwards again, and this is the first sign these 2016 predictions are not far off the mark.

Dairy industry identity Sir Henry van der Heyden received the 2015 Rabobank Leadership Award in Australia recently, in recognition of his exceptional contribution to the food, beverage and agribusiness sectors

HORTICULTURETwo new reports show the huge benefits of the Recognised Seasonal Employer (RSE) scheme to employers, workers and the Pacific region, Immigration Minister Michael Woodhouse says.

A report into a pilot project involving 640 Tongan and Samoan RSE workers has found that they sent home more than 40% of their take-home income between November 2014 and June 2015 – an average of between $4,600 and $5,500.

“The study also shows that income derived from the RSE scheme supports on average more than nine other people, further illustrating why the RSE scheme was recently ranked among the most effective development policies in the world,” Woodhouse says.

RSE employers also continue to praise the scheme with an annual survey showing 95% believe the benefits of participating in the scheme outweigh the costs.

RESEARCHNew Rabobank research shows beefed up environmental regulations are not just impacting on the dairy sector.

Increased environmental regulation will have a significant impact on New Zealand’s sheep and beef farmers as well as their dairy counterparts, it says.

Releasing the report Environmental opportunities: Making regulation work for New Zealand’s sheep and beef farmers, Rabobank Country Banking general manager Hayley Moynihan says since the introduction of the National Policy Statement for Freshwater Management, much of the focus relating to regulation has been on the impacts to the dairy sector, but sheep and beef farmers also face considerable challenges in achieving environmental compliance.

POLITICSAfter five years of negotiations the controversial Trans-Pacific Partnership (TPP) free trade agreement was finally concluded between 12 countries, including New Zealand.

Trade Minister Tim Groser was upbeat about the final deal, but the dairy sector was the apparent loser as big players, including the US, were unwilling to more fully liberalise their dairy sectors, the New Zealand Herald reports.

While unable to get total tariff elimination for dairy products, the agreement would give exporters much better access to a market of more than 800 million customers in 11 countries across Asia and the Pacific, and help Kiwi firms do business overseas, Prime Minister John Key said. “In particular, TPP represents New Zealand’s first FTA relationship with the largest and third-largest economies in the world - the United States and Japan.”

Successive New Zealand governments had been working to achieve this for 25 years. TPP would eliminate tariffs on 93% of New Zealand’s exports to new free trade partners the United States, Japan, Canada, Mexico, and Peru. “We’re disappointed there wasn’t agreement to eliminate all dairy tariffs, but overall it’s a very good deal for New Zealand,” Key said.

Meanwhile, the onion industry became the first vegetable group to sign on for the Government Industry Agreement (GIA) for biosecurity readiness and response.

Onions New Zealand Inc became the fifth primary industry to join the GIA partnership. They were closely followed by the forestry industry as the New Zealand Forest Owners Association became the sixth group to sign on to work with the Ministry for Primary Industries to manage and respond to biosecurity risks.

WOOLA small South Island wool auction had good clearance on the back of a weaker kiwi dollar and all micron indicators lifted significantly on the last southern sale, interest.co.nz reports.

More wool will now be offered, as on the mother and post weaning shearing will now dominate and dry weather should ensure colour quality will be maintained and keep prices 0.70c-$1/kg clean above last year. Unrealised foreign exchange losses pushed Wools of New Zealand into a bottom line loss of $925,364 for the year ended 30 June, Farmers Weekly reports. However company revenues increased to $27.6 million, up from $11.8 million a year earlier.

DEERVenison schedules are now adjusting down in typical summer fashion, but exporters report their markets are in better shape than beef and lamb and prices are $30/hd better than last year, interest.co.nz reports.

Industry planners will be hoping this is the catalyst for reinvestment in females and a return to sustainable growth after many years where deer numbers have fallen and processing efficiency has been at risk. Top velvet heads will soon be selected for the series of velvet competitions.

COMINGS AND GOINGSFonterra’s director results have been released with chairman John Wilson and existing director Nicola Shadbolt re-elected, but Blue Read was a casualty and will be replaced by Ashley Waugh.Westland Milk Products shareholders have elected two new board members. The successful candidates are Peter Morrison and Rebecca Keoghan.

Horticulture New Zealand president Julian Raine has announced Mike Chapman as the organisation’s new chief executive. Chapman has been chief executive of Kiwifruit Growers Inc since June 2005, is interim chair of the industry’s National Labour Governance Group, serves on a number of kiwifruit industry committees and is a Bay of Plenty Polytechnic Councillor. He starts with HortNZ on 18 January.

Former Federated Farmers President Bruce Wills is the newest board member of farmer owned fert co-op Ravensdown. Wills joins as director for the Eastern North Island. Over at LIC Candace Kinser was appointed as an independent director to the board, effective immediately. Kinser replaces Jay Waldvogel, who was appointed to the LIC Board as one of three independent directors in 2003 and did not seek reappointment in 2015.

LIKE TO KNOW MORE?To find out how we can help develop your rural strategy, contact St John Craner, Strategic Planner & Business Development Director 06 834 2239 • 021 515 650 • stjohn@tracta.co.nz • tracta.co.nz

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