Merino supply collapse as predicted

Lands minister David Parker is being “too clever by half” when he blames farmers for a big drop in Merino wool production, says the High Country Accord.

“A Lincoln University report in 2004 predicted a “devastating” 31 percent cut in Merino wool supply if the government didn’t change the way it went about tenure review,” says Accord chair Ben Todhunter.

“The report, and a peer review from Professor Keith Woodford confirming its findings, was pigeon-holed by the Cabinet policy committee when it discussed tenure review in February 2005. Apparently the loss of the Merino industry was seen as a reasonable price to pay for creating a network of 22 new high country parks.”

Mr Todhunter was responding to a media report that the New Zealand Merino Company is having to use Australian wool to meet some of its contracts because of a 20 per cent drop in New Zealand production, due in part to tenure review.

The Accord, which represents farmers in the South Island high country, says tenure review involves an exchange of property rights. Farmers sell their perpetual leases at market value to the Crown, in return for buying freehold title to those parts of their property that aren’t wanted by the government for conservation parks.

“Farmers want security of freehold title so they can run modern diversified farming businesses. Some thought they could do this under leasehold title, but the government has made it very clear it will change the law and rules applying to leases if it doesn’t get its own way,” he says.

“This had made it very difficult for lessees. If they go into tenure review, they have to do it on the government’s terms.

“They have to surrender most of their mid- to high-altitude tussock country to the Crown, even though this land is essential for summer grazing on most properties.”

The Lincoln University report, prepared for the Ministry of Agriculture and Forestry by economist Glen Greer, predicted that the loss of tussock country would make many farmers move out of Merinos.

Mr Todhunter says the loss of summer grazing forces farmers to adopt intensive farming systems that are not suited to Merinos, which do best in low intensity sustainable grazing systems.

“The minister is being too clever by half when he says the land farmers have to surrender is ‘generally of low productivity and includes bare rock and mountaintops’,” he says.

“It may be of low productivity for most of the year, but in summer and early autumn it provides good quality feed when little or nothing is growing on drought-prone flats.

“The tussock country is absolutely crucial. Lose that and you lose the Merino industry.”

Mr Todhunter says a better policy, which is provided for in the law governing tenure review, would be for the government to allow farmers to buy out the Crown’s interest in their properties in return for safeguards to protect the environment and to provide public access.

“Everyone would win. The Merino industry would thrive. Farmers would manage the land – not the taxpayer. And the Department of Conservation could use its limited funds to protect endangered species.”