21 Jan 2015

Drought declaration on cards if rain stays away

8:25 am on 21 January 2015

A Government drought declaration could be on the cards in a month or so if parched regions like South Canterbury, North Otago and Wairarapa do not get significant rain soon.

Dry land near Timaru.

Dry land near Timaru. Photo: Supplied

Primary industries minister Nathan Guy said famers were still coping well.

He said conditions had not reached the point yet where the Government would considering declaring an adverse event for drought.

But South Canterbury arable farmer and rural contractor Jeremy Talbot has taken issue with that.

He said that region was already in drought and by his reckoning, there should have been a formal declaration a month ago.

He said among other things, there needed to be an urgent stock take of feed reserves.

"Not just South Canterbury and mid-Canterbury, I think it needs to be a wider, general view taken right across New Zealand at the moment. Look at what is available, what isn't available.

"I believe that already a lot of options that could have been made earlier such as converting some of the feed crops that may have been there into silage and things like that, now, not only is the cost probably gone higher but the crops are past doing it."

Federated Farmers' grain and seed chairman Ian Mackenzie expected demand for stock feed from farmers in South Canterbury to pick up in the next few weeks.

Mr Mackenzie said there had not been a huge increase in demand for stock feed yet, but contractors were expecting it.

"The contractor who bales all our straw and hay says that he's getting interest from fellow contractors down in South Canterbury who can't supply their clients and he's telling his mid-Canterbury clients that if they actually don't commit themselves to their requirements for the autumn and winter now, he'll sell all his stocks to South Canterbury, where the commitment is starting to come forward."

Mr MacKenzie said grain prices were expected to slide but as demand from farmers ramps up, the market should remain stable.

Banks lend a hand

And while the Government was not rushing into any formal drought declaration, some banks have been introducing support measures to help farmers manage the extremely dry conditions in eastern areas.

The biggest rural lender, the ANZ bank, has announced an assistance package for farmer clients who are under financial pressure because of the conditions.

It included suspending loan principal repayments, waiving fees for loans considered necessary due to the impacts of extreme weather and discounted short-term funding to help farmers get through the immediate challenges while protecting their long-term productivity.

ANZ Bank's commercial and agri managing director Graham Turley said the lack of rain was hitting areas that had not experienced such extreme conditions for many years, so it was a new challenge for many farmers.

Westpac said it was also gearing up to help its hardest hit customers in regions such as South Canterbury and North Otago.

Head of Agribusiness Mark Steed said without rain over the next couple of weeks, it seemed inevitable that large parts of the South Island would become drought zones.

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