Labour supports NZ First debt relief proposal
By Richard Harman (author)
The Labour Government is facing its first major political management crisis, and in a measure of how serious the Mycoplasma, Bovis outbreak looks like becoming Parliament yesterday agreed to consider a Bill which would regulate the way banks deal with farm debt.
The Bill, the Farm Debt Mediation Bill, was introduced by NZ First MP, Darroch Ball, but it has a long history with both NZ First and Labour.
However, the fact that it has emerged this week suggests that Government MPs are getting spooked by the size of the potential compensation bill for affected stock that are being slaughtered.
At the same time, Labour has subtly changed the way it is talking about farmers' response to the disease.
Now rather than blaming them for not keeping records of their stock movements they are saying the system put in place by the previous National Government to register stock movements does not work.
And it looks like the Government is also preparing to abandon the idea of eradicating the disease and instead will have farmers manage it which will require no compensation.
Under the eradication programme currently operating, farmers must slaughter affected stock and then get compensation for their loss.
But because the disease has spread so far, that compensation bill could be crippling for the Government.
Therefore it is looking at having farmers keep affected stock alive and manage them but though diseased cattle are no threat to human health they will not do so well, and their weight gain or milk production will be down.
Consequently, farmers stand to incur large losses on their stock.
For heavily indebted farmers that could cause the banks to try and sell them up.
Ball’s Bill would force the Banks to first engage in a mediation process with the farmer.
Agriculture and Biosecurity Minister Damien O'Connor again met with leaders from DairyNZ, Beef and Lamb NZ, Federated Farmers, Rural Women New Zealand, Dairy Companies Association of New Zealand, Fonterra and the Meat Industry Association yesterday.
“We all committed to deciding on the next steps in the Mycoplasma bovis response within the next couple of weeks," he said.
“We talked about phased eradication and long-term management.
“It is a difficult choice that we will make together once we receive more advice from the Technical Advisory Group in the coming days.”
If the Government opts to eradicate the disease then affected, farmers will be required to slaughter diseased stock (as they are doing currently) and then they would receive compensation from the Government.
But with the bill for that already over $100 million and set to climb much higher, possibly nearer $1 billion, eradication becomes a less viable option.
The alternative is to have farmers live with the disease but risk that their icnomes will fall as a consequence.
Hence the fears that they might not be able to service their debt.
The Farm Debt Mediation Bill had its origins in New Zealand First back in 1999 when NZ First MP, Doug Woolerton, proposed it but failed to win support in Parliament.
It was then picked up in 2013 by the current Agriculture Minister, Damien O’Connor
Most recently it re-appeared under NZ First MP Ron Mark’s name in 2015.
And farm debt mediation, though not the Bill, was listed in the Labour – NZ First coalition Agreement.
The Agreement says Labour will support an “examination of agricultural debt mediation as well as receivership fees.”
Last Thursday, NZ First Leader, Winston Peters asked Associate Agriculture Minister, Meka Whaitiri, about debt mediation.
PETERS: “Could I ask the Minister as to whether the Government would consider the possibility of a farm debt mediation bill—something which the Labour Party and New Zealand First have supported in the past, but which the National Party opposed?
WHAITIRI: “Absolutely. We are a coalition Government of action and doing the right things by farmers throughout New Zealand, and they see it as we speak.”
National's Shadow Leader of the House, Gerry Brownlee appeared to support Ball’s call to introduce the Bill yesterday but later told POLITIK that National would oppose the legislation if it got to a vote.
This has been a complex piece of politicking, made worse by the fact that the Government doesn’t really know how far the disease has spread.
Both sides have been trying to blame the other.
Labour has been quick to blame National for allowing critical expenditure areas within the bio-security vote to run down and for its failure to ensure the national animal identification and tracking system was set up to work properly.
National, on the other hand, has responded with continual claims that Labour is attacking farmers and not ensuring they are getting their compensation on time.
The claims about Labour being anti-farmer appear to have been acknowledged in part by the Government.
Hence the change in the tone of the rhetoric and the support for the debt Bill.