'Sleepless nights' over rates

Already facing pressure from falling milk prices, farmers have told of worries and ''sleepless nights'' over rising rural rate charges, at an Otago Regional Council meeting yesterday.

Concerns over the charges, some aimed at improving water quality, were heard in public submissions to the ORC's long-term plan hearing in Dunedin.

Taieri farmer Mike Lord, a Dunedin City councillor, said ongoing costs from the lower Taieri flood and drainage protection schemes were ''becoming unaffordable'' for the few landholders who ''carry the brunt of the cost of these works''.

The schemes were ''hugely important'' in allowing farmers to do their daily work and earn their incomes but it was time to stop ''persecuting farmers'' who simply could not afford the ongoing costs, he said.

Yesterday, the Reserve Bank warned there was ''significant risk'' dairy prices would remain low for an extended period.

If dairy farm prices falter, that could become the tipping point for highly indebted dairy farms to default on loans, the bank said.

Opposition leader Andrew Little said yesterday the massive drop in the global milk price and associated fall in Fonterra's farm payout would rip $360 million out of the Otago economy.

''Since February last year the global milk price has been slashed in half and Fonterra's forecast payout has dropped from $8.40 to $4.50. That has created a $7 billion hole in the country's economy,'' Mr Little said in a media statement.

''That milk price collapse will cost Otago over $360 million this year.''

The Government's overreliance on the dairy industry to expand the economy had backfired, he said.

Cr Lord told yesterday's ORC hearing that when he had bought his farm in 2001, he had earned $5.33 per kilogram of milk solids and his rates had been about $7500.

This year he was earning $4.80 per kilogram and his rates were over $24,000.

Cr Lord suggested there should be a greater contribution from the ORC ''general rate'' towards the area.

He highlighted the strategic value of other Taieri assets, such as Dunedin International Airport, which is below sea level.

He asked what the cost to Dunedin City would be if there was another 1980-type flood and the airport was closed again.

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