WTF? Where's the finance? Or food?

WTF has been translated at COP27 as Where's the Finance? New Zealand should be asking the same question.

From the outside, New Zealand appears to have survived Covid-19 remarkably well. Other countries can point to our low loss of life and the fact that the national debt is apparently acceptable by international standards.

Internally, however, it feels like a different story.

The stresses in the health, education and food production systems are palpable. All are understaffed, working longer hours, feel undervalued and the metrics of their work are deteriorating.

Waiting lists for treatment have increased, passing rates at school have decreased, and in food production it is difficult to maintain the usual rotation of planting, growing, harvesting and processing with the extreme weather conditions and poor labour availability.

The meat processors are already warning that short-staffing is creating delays, which in turn means farmers have to feed animals on-farm for longer than anticipated.

The knock-on effect is feed shortages and increased greenhouse gases (GHG) for the product, neither of which is desirable. It also creates stress for the farmer.

More stresses are caused by the increase in costs of production, on top of increases in interest rates. The margins in food production are small and eroding in the face of inflation, which is 15 per cent in farming operations - more than twice as high as general inflation (7.2 per cent).

On top of everything are the increases in regulations in every industry - which for farmers and growers are impacting on their ability to produce food at a price that consumers want to pay.

Paperwork is taking the satisfaction out of the primary sector. The number of "for sale" notices at farm gates appears to have increased but sales are down.

A rural spokesperson from REINZ, Brian Peacocke (who recently stepped down as rural spokesperson), has explained that sales have dropped despite income being strong, because "confidence is being eroded in the overwhelming increase in costs across the board".

All house sellers will be experiencing the same angst: if your asset appears not to be desired by others, you start questioning past decisions, which undermines self-confidence.

The extra confusion for farmers and growers is that they are known globally as being extremely efficient producers, are improving efficiencies all the time with animal and plant breeding, as well as management, and provide the bulk of the export income - which is what is needed for health, education and infrastructure improvements.

If farmers stop producing food to sell overseas (remembering that carbon farming doesn't benefit the export economy in the same direct way) WTF for the domestic improvements?

There is another WTF.

Farmers overseas are facing similar problems in terms of costs, including those for compliance.

In June it was reported that nearly a quarter of dairy farmers in the UK are planning to leave the industry within the next two years. Costs of production were the main worry for about 90 per cent of respondents, but more than three-quarters added the rising cost of meeting Government regulation.

Dairy board chairman Michael Oakes has said "there is real concern that processors will not be able to supply their customers if production does not increase".

Add the news from Ukraine about food production, and concerns across Europe and North America about war and drought, and WTF will mean Where's the Food?

Countries trying to reduce impact on the climate by putting pressure on domestic agriculture are overlooking the difficulty of feeding people.

Competition for supply will result in price increases, and emissions leakage (the concept that food production in less carbon-efficient countries replacing that from efficient countries will be worse for the planet overall) will be real.

What the world should be doing is treating food as a global resource and producing it where it can be done most efficiently.

This is already being discussed for oil production.

A September McKinsey report suggested that in the goal of achieving a low-carbon future, society needs affordable energy sources until the net-zero goal is met. Restricting oil was not considered to be the answer to a sustainable future - using the efficiently produced oil during the transition was.

The same applies to food. Research published in March this year indicated that major benefits could be had relocating and optimising cropping land within a country or the globe.

For meat and milk, New Zealand already has the edge.

Mckinsey concluded that "the low-carbon oil of the Gulf of Mexico can help fill the supply gap during the energy transition".

New Zealand can do the same for animal protein.

WTF now has several meanings.

For the second one (Where's the Finance?), the export economy based on agriculture and horticulture brings it in.

For the third (Where's the Food?) farmers and growers produce it.

As for the original meaning - we might like to think about why at least some farmers are selling up.

Brian Peacocke (REINZ) suggests that the extra emissions tax might be having a severe effect already.

And world ag is wondering - WTF?

Dr Jacqueline Rowarth is an adjunct professor Lincoln University, has a PhD in Soil Science (nutrient cycling) and is a director of Ravensdown, DairyNZ and Deer Industry NZ. The analysis and conclusions above are her own. [email protected]