Private Enterprise
Consider this:
• In February this year, dairy farming debt in New Zealand hit NZ$38 billion (it grew last year at about $10 million a day);
• 1 in 10 dairy farmers are feeling under pressure from their banks over their mortgages;
• The Primary Industries Minister is encouraging bankers to show mercy to farmers in trouble;
• 12.5% of loans are non-performing now and that could be 40% in a couple of years time;
• At $4 to $4.50 per kilo of milk solids payout, some 80% of farmers will need to be borrowing just to keep going;
• Our foreign competitors can produce for close to a dollar a kilo less than NZ’s current average cost of production.
The dairy industry, having boomed on higher income in the past, is in trouble. The government says there will be no bailout package. It seems to prove the wisdom of the old maxim: ‘never a lender or a borrower be’. Those who get in debt by jumping on the bandwagon of a boom, and those who lend to them, seem not to have learnt lessons from economic history. The profit-driven actions of a few will cost not just them but, in the end, many.
I can only say, please drink more NZ milk and eat more NZ milk products.
(Statistics were taken from an article by Gordon Campbell in Kapi-Mana News, March 1, 2016.)
• In February this year, dairy farming debt in New Zealand hit NZ$38 billion (it grew last year at about $10 million a day);
• 1 in 10 dairy farmers are feeling under pressure from their banks over their mortgages;
• The Primary Industries Minister is encouraging bankers to show mercy to farmers in trouble;
• 12.5% of loans are non-performing now and that could be 40% in a couple of years time;
• At $4 to $4.50 per kilo of milk solids payout, some 80% of farmers will need to be borrowing just to keep going;
• Our foreign competitors can produce for close to a dollar a kilo less than NZ’s current average cost of production.
The dairy industry, having boomed on higher income in the past, is in trouble. The government says there will be no bailout package. It seems to prove the wisdom of the old maxim: ‘never a lender or a borrower be’. Those who get in debt by jumping on the bandwagon of a boom, and those who lend to them, seem not to have learnt lessons from economic history. The profit-driven actions of a few will cost not just them but, in the end, many.
I can only say, please drink more NZ milk and eat more NZ milk products.
(Statistics were taken from an article by Gordon Campbell in Kapi-Mana News, March 1, 2016.)
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