16 Jul 2010

Action demanded on low farming profitability

7:33 pm on 16 July 2010

A science commentator says something needs to be done about the low profitability of New Zealand farming if the country is going to continue relying on agriculture as the backbone of the economy.

Strong milk prices coupled with farmer dissatisfaction over returns from sheep and beef has led to a further expansion of dairying.

That has been blamed as the main cause of a bigger than expected drop in sheep numbers and export lamb production this season.

But John Lancashire, former president of the Agricultural and Horticultural Science Institute, says profitability figures show the margins for dairy farming aren't much better than they are for sheep and beef.

Mr Lancashire says one answer, as has been pointed out often enough, is increasing the value of farm products so they're not competing in the commodity markets.

While acknowledging that there are plenty of initiatives under way to do that, he contends that not much has been delivered back to farmers so far - even from Fonterra's added-value activities.