2018 07 – News from New Zealand

A Letter From Our New Zealand Correspondent

Feargus O’Raghallaigh


Recently I read a George Monbiot piece in the Guardian Weekly (15 – 21 June) on the theme of the unsustainability of pastoral farming and animal-based food production in the context of climate change (The best way to save the planet? Drop meat and dairy). Monbiot’s essential point was “All the evidence now points in one direction: the crucial shift is from animal- to a plant-based diet.” It was based on a paper published recently in Science, the monthly journal of the American Association for the Advancement of Science.

According to Monbiot, the study “shows that animal farming takes up 83% of the world’s agricultural land, but delivers only 18% of our calories. A plant-based diet cuts the use of land by 76% and halves the greenhouse gases and other pollution that are caused by food production.”

If there is one country in which such thinking has taken a firm hold it is, strangely, New Zealand. This is a country that lives by butter and beef production on a vast scale, cheaply produced and then exports of most of this production, much of it these days to China.

The entire New Zealand economy is based on pastoral farming. One company, a cooperative, Fonterra is a business giant, a statutory monopoly in effect; its vast dairy processing factories are everywhere to be seen and its huge milk tankers clogging up even urban motorways never mind meeting you head-on on rural byways. The output is mostly exported to China.

It is much the same in beef and sheepmeat: huge production with processing now concentrated in a handful of businesses. The processing plants and freezing works are today much more concentrated than once they were – and are much bigger. Again China is today the big export outlet.

Beyond the farming there are other, important resource sectors.

There is commercial forestry and logging, again large-scale and again for export (again China).

And there is the fishery: New Zealand’s vast Exclusive Economic Zone, fifteen times the land area of NZ and today a gigantic commercial fishery.

Further, for more than a decade the focus of government policy has been on growth of primary production output and its export performance. Over the last nine years of National-led governments, farmers and foresters were given free rein and every encouragement to expand and ramp up output. In the case of dairy – by far the most important primary sector enterprise – industrial pastoralism was encouraged, based particularly on encouraging very large units and irrigation.

Over the last few years – and particularly in recent months – the environmental and societal costs of unfettered expansion have become more than clear to just about everyone.

The irrigation needed to support the large-scale dairy conversions in the Canterbury Plains of South Island is lowering water tables, draining aquafers, damaging river basins and worst of all in the eyes of many people, the water feeding the irrigation systems is a natural resource effectively given for free to these commercial, intensive and increasingly big dairy units.

Behind the Plains sits the High Mackenzie Country of Central Otago and its Basin and overlooking it all, the snow-capped Southern Alps. This is high altitude, spectacular; a land of snowfields, glaciers, rushing rivers, creeks and great glacial lakes and the enormous hydro schemes that are the powerhouse of electricity supply through both islands.

The Mackenzie region is at a hard push no more than marginal from the point of view of dairying – without massive irrigation. As a result of the infrastructure created to harness hydro in the region that is technically an easy ask and so land conversion has been happening on a significant scale. There are growing protests – now getting militant and disruptive of pipeline construction.

Down on the Canterbury Plains there is now a wide acceptance that the expansions and conversions there have been overdone. Even farmers at this point are beginning to realise and accept this. It’s not just the water take but also the polluting nutrients being added to riverine systems by animal effluent.

There has been a steady flow of reports, scientific studies and investigations, all going in one direction: the encouragement of uncontrolled expansion must be reversed.

There have been serious incidents – the most spectacular being the poisoning in 2016 of the local water supply in Havelock North (a town on North Island) with campylobacter. Effluent from sheep farming is believed to be the culprit. Some 5,000 people were affected with three deaths caused by the gastroenteritis outbreak.

Now the new Labour-led government has flagged caps – maybe not on herd size but of effluent volumes and regionally administered (which will in the end amount to the same thing). Whether the Mackenzie conversions can be stopped at this stage is another thing. That could prompt farmer litigation and compensation claims (a kind of national version of ISDS).

Forestry and logging is recently in the news. It has a long and notorious accident and safety record. The industry is based on large-scale planting of marginal land with pine on 20 to 25-year cycles leading to clear-felling mainly for export at maturity. Felling leaves millions of tonnes of waste log (known as ‘slash’) behind. A few weeks ago in the small coastal township of Tollaga Bay (North Island) a million tonnes of slash from large commercial forest clear-felled two years ago was washed down in a freak torrential rain storm. Homes and holdings were destroyed, farmlands buried under timber and silt. Estimated damage and destruction? It’s put at NZD100m and the forest companies are making every effort to avoid the liability: ‘we did nothing illegal’.

And so it goes – almost daily another story. And more demands for controls and restrictions across a range of primary and resource-based sectors. All new offshore oil and gas exploration has been halted (existing exploration licenses will not be revoked). Similarly, no new coal exploration or mining will be allowed on vast tracts of Crown lands on the West Coast of South Island that are designated national parks and scenic areas. There will be restrictions on dairying: they are coming.

The West Coast is the original home of New Zealand coal mining and birth-place of the country’s Labour Party. The heritage is also strongly Irish Catholic, descendants of the first miners and creators of the trade union and Labour movement.

There is in all of this huge problems.

First, New Zealand is an economy based on natural resources and primary production. Add up these sectors and add in the downstream and related business activities and that pretty much is the national economy. Think Ireland without FDI and you have an inkling.

Second, these businesses are all pretty much tight margin. They generally display extreme price volatility: producers are selling into highly competitive markets internationally and do not have any real market power (they are price-takers). International food markets also are highly tariff protected by importer governments. Think Ireland as a food producer with no access to the EU and its CAP.

Third, exchange rate movements add to this deeply difficult trading environment.

It is all pretty much a thankless task with little option but to expand and expand production and plead and push to international trade liberalisation and bilateral or plurilateral market access deals (such as the TPP).

Fourth, expansion has now had a decade and more of practice behind it with China still the only real gain to date and the social and environmental costs associated with the policy becoming ever more obvious.

Here we come to the great contradiction. On the one hand Kiwis aspire to higher living standards and a better life. They live with creaking (road, rail, environmental) infrastructures and are trapped in a housing crisis. They strive to achieve yet also see the limits and futility of current economic policy although also I doubt that they see any alternative. They are trapped in free trade ‘thinking’ while the world and capitalism lives by onion-layers of protectionism and protective practices.

They are also perhaps the most environmentally aware and conscious people I think I know. Why? I don’t know but maybe it has something to do with knowing they sit on the Ring of Fire, the Pacific earthquake zone. Maybe also it’s the outdoor social culture of the place – the familiarity with country, with the bush, hunting and fishing, tramping and camping. There is also the continuing huge importance of farming and the rural economy. There is also what I can only think of as a plantationist, frontier culture – close to nature and the soil and all that goes with that – associated with a colonial history and being a colonising people (like the Americans and Canadians, the Boer and the East African whites).

There remains though the problem. Kiwis cannot achieve their life-goals without growth (and government borrowing and spending). Nor can they preserve and protect their environment with the current growth model (and without government control and regulation). And they will secure neither their life goals or environmental objectives through free trade in the Kiwi case in primary production and natural resources.

I think Brexit Britain will discover much the same – if it happens.