Rural services 'might be hit harder' than dairy farmers
Federated Farmers is calling on the government to invest in rural infrastructure projects to make up for an upcoming shortfall in dairy work.
Federated Farmers has called on the government to “fast-track” infrastructure projects in dairy regions after Fonterra [NZX: FCG] slashed its forecast farmgate milk price payout.
Fonterra announced today its forecast payout for the 2015/16 season had dropped to $3.85 per kg of milk solids, down from its most recent forecast of $5.25.
The total payout is forecast at $4.25-4.35, including a dividend of 40-50c a share.
Chairman John Wilson said the reduction is due to the continued significant imbalance in the global dairy market between weak demand and surplus supply.
Shortly following the announcement, Federated Farmers said some small scale rural service industries which rely on dairy farmers for work could be hit hardest.
Spokesman Andrew Hoggard says the government therefore needs to find work for these companies, such as engineering and contracting firms, as a priority over the next year.
“When dairy prices go back up, as invariably they will, then the dairy supply and service industries need to be ready and skilled to get back on to the farms to make up for lost time,” he says.
“Or, at least, people will have had other employment in the district and haven’t permanently left for somewhere else.”
Mr Hoggard says the government made a promise before the last election to provide $100 million over 10 years for planting riparian strips but this could be compressed into three to five years.
Irrigation projects, rural roads and broadband rollout were also examples of possible work.
“This sort of infrastructure work is going to be done anyway.
“A little bit of tweaking of government priorities for where and what type of work to fast-track could make the world of difference to some rural communities with a high exposure to the dairy industry.”
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Hamish McNicol
Fri, 07 Aug 2015
Fri, 07 Aug 2015
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Rural services 'might be hit harder' than dairy farmers
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