Outgoing Federated Farmers national president Bruce Wills
has again sounded a note of caution over burgeoning debt levels
in the agricultural sector.
In his farewell speech at the rural lobby organisation's
national conference in Palmerston North on Friday, he noted a
monthly increase of $842 million to the end of May, reaching
a total of just under $53 billion now loaned to New Zealand
In light of global uncertainty across many areas, Mr Wills, a
former banker, said he was not sure how sustainable that sort
of debt level was.
''A few years ago, Australian farmers had $70 billion of
rural debt and things looked OK.
''Then came a serious weather event and now $10 billion of
this is 'non-performing' with a good portion of it unlikely
to ever be repaid. We run the same risk here,'' he said.
While farming confidence was high and some sectors were close
to being as strong now as they had ever been, there were some
In recent days, the New Zealand dollar had approached record
highs against the US dollar and the trade-weighted index.
That would be a significant headwind and might well prompt a
slowing in further interest-rate rises.
For the past six years, New Zealand had had a government
largely supportive of agriculture. Should there be a change
of government in September, that was unlikely to continue to
be the case, he said.
Mr Wills also stressed the importance of free and open trade.
When he joined Federated Farmers' national board in 2008, New
Zealand's two-way trade with China was $8 billion.
Last month, it broke through $20 billion and it was on track
to exceed $30 billion within the next six years.
The Trans Pacific Partnership remained a prize that must be
pursued ''with all the vigour we can'', he said.
The big issue during his time in the role had been water and
how to maintain and improve its quality while coping with a
growing population and an expanding and changing farm
It was a privilege to judge New Zealand's top 10 supreme
environmental winners in this year's Ballance Farm
Environment Awards, he said.
They were ''outstanding operators'' leading by example,
running profitable businesses while ''well and truly''
meeting their social and environmental responsibilities as
''I think it is telling that the national winner was a
large-scale intensive dairy farm, on some of Canterbury's
''This is exactly the sort of farm at the sharp end of this
economy-environment conundrum that we are trying to solve,''
Mr Wills said.
Mark and Devon Slee milk 2580 cows, producing 1830kg of milk
solids per hectare or 475kg ms a cow but, with precision
farming, smart science and exceptional management, were
leaching the same amount of nitrogen they did in the
mid-1990s, despite having 70% more cows.
Their immediate focus was on reducing their nutrient losses
even more, he said.
''This is a clear example that we can and must do both.
Whilst running efficient profitable businesses, we must do
this within sustainable environmental boundaries,'' he said.
• Dr William Rolleston, a South Canterbury farmer
and biotechnologist, has been elected president of Federated