Studying a life without subsidy

THE last few weeks have been something of a revelation for 19 Young Farmers who have not long returned from a 16-day study tour of New Zealand, focusing on succession and opportunities for agricultural youth. 

The trip, organised by the SAYFC Agri and Rural Affairs committee, was attended by members covering visits relating to beef, sheep, arable, dairy, fruit and vegetables, research, processing, technology, added value, communications, mental health and resilience, to name just some of the topics. 

With the country facing its wettest spring since 1928, the group experienced unusually lush, green pastures and a climate similar to Scotland, making it easier to make comparisons. 

The weather had proved something of a challenge for some growers, in particular those in the soft fruit sector, but despite this the group were continually welcomed by optimistic hosts who maintained a forward thinking, dynamic approach. 

With agricultural subsidies abolished more than 20 years ago, it was clear for the group to see the country’s farming sector is thriving under their own self-dependency. The country has some of the world’s most productive farmers. 

The group learnt this first hand from a visit to an orchard growing 4.5 ha of kiwi fruit. The removal of subsidies had allowed them to focus more on their operation but in order for the farm to be profitable it was essential they had a flexible relationship with their buyer, involving them as and when required throughout the growing cycle. 

This was a common theme throughout the trip, with the group visiting farmers who had cut their costs, diversified their land use and developed new products in order to compensate for the subsidy. 

New Zealand is home to about 4.6m people without much of a domestic market for products such as milk, meat and wool and, as such, the group learnt that almost 90% of its production is exported. 

A visit to an abattoir and meat processing plant really emphasised the importance of good export relationships, something that resonated with the group in light of Brexit. This had a capacity for 240,000 head of cattle per year, employed 400 staff and exported most of its meat to China and the US. 

The relationship with China had taken nearly a decade to form but now New Zealand is one of its largest trading partners. While businesses survived this negotiating period, they faced a number of financial and supply challenges that many others may not have overcome. 

Planning for the future and a transparent business was critical for the success of those hosting many of the visits, with a strong emphasis on the importance of a board. 

Regardless of the size and scale, almost everyone the group visited had external advisors who met regularly to provide guidance and objectivity to their operations. 

Figures were discussed and experiences and skills utilised to ensure the best outcome for all involved without the fear of asking for help or judgement and repercussions from sharing information. 

Not only did this board structure provide a sense of purpose for family members starting to take a step back, but offered an opportunity for those coming into the business to take more of a leading role without feeling isolated. 

Viewing the farming operation as a business and not a family ‘heirloom’ was common across both islands, making succession planning much easier. 

We learnt that if the next generation did not want to be involved in the farm, the majority of hosts would just sell the business and farmers in New Zealand appeared to be less 'precious' about their farms than those in Scotland. 

Many of them were building assets away from the farm and their attitude to life was heavily focused on making time for leisure and social activities, by regularly stepping away from the farm.

The attitude of those farming was a frequent topic of conversation throughout the trip. Firstly, in the form of resilience and ensuring that even in times of adversity it is a time for learning and focusing on the positives. 

Given recent earthquakes, the group heard this first hand on many occasions and in particular from one farmer who had suffered from mental stress and depression as the result of the natural disasters that continued to impact his farming operation. 

He encouraged the group to not bounce back but bounce forward, and try not to worry – something he described as the biggest form of wasted energy. 

Secondly, not being afraid to take a risk was a key message that came across from nearly all the businesses the group visited. 

It was evident that support from the banking sector and a positive attitude to trying something new outweighed the fear of risk if it did not pay off. There appeared to be less apprehension about a business having a loan and more focus on the necessity for this form of finance in order to expand the business to generate future profits. 

With land prices so high, it was clear to see why loans were required and how the country was facing the same difficulties in Scotland with access to land. 

But for those who were able to purchase property, rotation grazing, low maintenance and low staff costs were paramount. 

Good facilities such as handling systems and the use of contractors helped ensure businesses were viable. 

Sheds and housing were limited, but with livestock able to graze almost all year round, the priority was buying more land. With farmers currently not restricted by environment legislation, such as the removal of trees and shrubbery, investing in land and its improvement was something to be embraced. 

Productivity in New Zealand’s agricultural sector has grown faster than the New Zealand economy as a whole and it is clear to see why. With farmers free of subsidises, the desire to produce what people really want and a positive attitude to both business and family, there is much to be learnt from them without losing sight of the fantastic opportunities and resources available in Scotland. 

The most important message of all being to step away from the home business – or as in the words of Strichen YFC member, William Moir, who joined the tour, ‘it’s a sare chav for a half chan bap’ – who knows what tomorrow’s lesson will be!

During the 16 days the group reported their findings on their own blog at www.sayfcblog.wordpress.com which covers additional topics such as women in agriculture, the lack of use of antibiotics, markets and irrigation.