A rural ambition for broadband

12 November 2009

A rural ambition for broadband

Presentation by Donald Aubrey, Federated Farmers vice-president and telecommunications spokesperson, to the Telecommunications Users Association of New Zealand (TUANZ) Rural Broadband Symposium in Rotorua

Thank you for allowing me to speak on the very important issue of rural broadband, which will have a profound affect on the social and economic future of rural New Zealand.

I would like to thank Chris O’Connell, chairman of TUANZ, for inviting me to speak today as well as his co-chair, Federated Farmers President, Don Nicolson.

I appreciate being given the opportunity to discuss the way in which fast broadband, of the kind taken for granted in our cities, can be rolled out across New Zealand’s hinterland.

The final decision on whether this does happen ultimately rests with Communications and Technology Minister, the Hon Steven Joyce, so I thank the Minister for being here today.

The way my farming colleagues and I see it, Minister Joyce must ensure this once in a generation opportunity is implemented on a fair basis to all New Zealanders.

I would like to express my gratitude in advance to the Minister for taking some of Federated Farmers solutions on board in order to get this complex issue right. Though I also want to remind him that we are here today to speak frankly about the future of rural broadband.

As the title of today’s symposium highlights, we must ‘set New Zealand on the right track for rural connectivity’.

To get connected, of course, the necessary funding must be in place. Let me begin then by asking whether the Government’s broadband policies will satisfy the wishes of farmers and our rural communities.

The short answer, at this current time, is an unequivocal no. Rural New Zealand is certainly not ungrateful for the funding on offer, but clearly it remains inadequate.

I remember Prime Minister, the Hon John Key’s election campaign promise that he would be “ambitious for New Zealand”. The proposed funding that aims to hasten the roll-out of ultra-fast broadband to everyone exemplifies that ambition.

Today we need to ensure that the way forward for rural broadband is clear and that, more importantly, there is adequate funding in place to achieve it. We need immediate action so that the words that roll readily off the tongues of our politicians at election time do in fact have meaning.

I recall a skewed comment made in the heat of an election campaign by Al Gore who claimed he had “invented the internet”. While a peculiarly fallacious statement, it certainly sounded good at the time.

Part of our ambition at Federated Farmers is to ensure that what is said at election time is not only implemented, but done so in a fair and equitable manner.

If you’re an urban New Zealander and a part of the 75 percent of the country promised ultra-fast broadband, you may think Mr Key’s ambition is about to pay off. But, again, if you’re a part of the 25 percent who reside in our beautiful countryside, you won’t.

That’s despite the fact that rural New Zealand is the true engine room of our economy, generating 64 percent of the countries export receipts.

So where’s the ambition here? Missing in action, that’s where. Because to tell the truth, the rural community’s being forced to settle for second best - and that’s just not good enough in my book.

New Zealand is a country of four million people, one million of whom are being short changed by the Government’s current broadband plans.

Although it has promised to invest $1.5 billion to roll broadband out to urban folk who already have fast internet, the rest of us are left with the scraps.

That’s just $48 million of direct Government funding! Or less than 10 percent of what each of the other three quarters of the population are projected to receive.

So from the outset, we were $452 million short. Don’t get me wrong, rural people aren’t asking for more than anyone else - we simply want equality.

If the Government wants to treat us differently, then do it by investing more, rather than less, into rural broadband. One look at New Zealand’s geography suggests that would not be a bad idea.

We do, however, acknowledge Minister Joyce’s energy and effort in lifting this level of investment after the initial, ill-conceived broadband funding announcement.

This energy and effort led to the proposed restructuring of an existing industry levy to top that investment up to $300 million over the next six years; though it still falls well short of the $500 million urban New Zealand are set to receive.

According to the Commerce Commission, the existing Telecommunications Service Obligations (TSO) levy is worth at least $70 million a year, so over the next say 20 years, it could provide $1.4 billion for investment in rural areas.

Yet under the new draft proposal, which abolishes the TSO levy in favour of a ‘new’ $50 million per year levy over six years, falling to $10 million over 20 years, the total will be $440 million, or about $1 billion less.

This amount of investment is no small cheese. Federated Farmers is definitely behind innovative thinking but when such innovation leaves the rural sector a billion dollars short, we suggest caution is in order.

For example, we congratulated the Minister for listening to Federated Farmers call for a rethink of the proposed State Highway 20 Waterview connection tunnel, which would have cost $3.2 billion.

The Minister wisely reviewed the project and looked to skin the cat another way, saving the taxpayer about $1.7 billion dollars in the process. Like the axed TSO investment, that’s a significant amount of cash. It is clear the Government has underestimated the rural populations’ desire and need to access broadband.

I hesitate, but I have to state the obvious - we are people too. We are from the same ilk as those who don’t live in the country. But we don’t want to deny urban dwellers fast broadband and neither does ‘the market’.

The fact is fast internet is already available to most townies and existing providers such as the Christchurch City Council’s Enable Networks are currently rolling out commercial solutions to expand their market in this densely populated area. So my point is, solutions already exist for many urbanites.

Farmers, on the other hand, can’t keep up with the world without fast internet. Without it, we can’t monitor milk supply, pay bills, check the latest rural news or even see where the weather’s heading.

There’s also a range of practical analytical tools that offer a leap forward in farm productivity. Land, rain, fertiliser and stock monitoring technology, of the kind farmers dream about, are all accessible with broadband.

In light of our proven track record in innovation and improving productivity, which is well above the entire economy’s average, we deserve an opportunity to make the most of this technology. It simply doesn’t make sense to deny farmers an enabling tool like broadband, which boosts productivity and production.

If we want to catch up with our Aussie neighbours, it doesn’t make sense to deny our engine room the very tool that can provide a step change. It also doesn’t make sense to deny our rural population when Australia is going to invest in its rural people.

Providing the rural community with fast internet will benefit everyone. It’s worth remembering that rural New Zealand may only account for one quarter of the population but we produce two thirds of the country’s export wealth.

When the milksolids payout falls, or production is stricken by drought, everyone knows the rest of the economy suffers with our farmers.

As critically important, though, is the social aspect of broadband.

We don’t need ‘shower nozzle’ like social engineering that creates a two-tier society, consisting of those with and those without broadband. If we want to attract and retain people in rural areas, we have to push back the tyranny of distance.

Like all other New Zealanders, we want to be socially connected through networking sites like Twitter, You Tube, Facebook and other emerging technologies that connect people together, globally.

Becoming a digital backwater or digital ghetto is quite simply not something we aspire to. If this Government desires to keep our developed nation status, it has to think like a first-world country. That means first-world solutions to broadband in our countryside, not third-world failures.

The third world’s not a place any New Zealander wants to be but it’s exactly where we’re heading if we don’t get this broadband issue sorted.

Minister Joyce; I am sure you do not want to be recorded in history as the architect of regression.

Rural broadband is a critical issue that all New Zealanders have a stake in. What this Government does over the next few months will impact in a very real way on rural New Zealand over the coming half century.

But enough about the problem - what’s the solution?

Firstly, let’s talk about funding. Money matters because it helps get things done.

Under the current proposals, there is $1.5 billion in funds from Government, with $48 million for rural and a further $252 million from the new levy - a total of $1.8 billion.

We appreciate that everyone is still on the recession roller coaster but haven’t farmers been playing their part to lift us out of the downward spiral?

For example, the increase in dairy payout since the start of the season will inject an additional $1.8 billion into the economy. No other sector can match that boost. If it was all taxable, at say 30 cents in the dollar, it would give the Government an additional $600 million from dairying alone.

Given this, we believe the Government does have room to dip into its pocket to top-up the $48 million identified for rural broadband. So Minister, any consideration by your Government to do just that in the next budget would be warmly welcomed.

The Federation’s recent submission on the new levy recommends it remain at the current $70 million level for at least six more years, adding a further $120 million to the pot. That would push the total amount raised for rural broadband over $480 million - much closer to the $500 million figure we see as the minimum target.

I also have to ask why the proposed new industry levy will raise only $50 million per year when the TSO levy currently collects $70 million per year? Why not increase it? These measures alone would help redress the current funding imbalance between the rural and urban broadband plans.

Once we have the ‘pots’ topped up to a more equitable level, the issue will be how the Government allocates the ‘gold’. The Federation sees some merit in allowing access to the $1.5 billion fund to provide rural solutions.

For a start, the space between any two urban centres is always rural and urban centres need to be connected.

The problem is the Government is allocating money to a section of our society that has not been failed by the ‘internet market’. Whereas the market failure of broadband is rife when it comes to our hinterland.

More emphasis should be placed on where the market has failed in that area between the urban centres - the countryside. Federated Farmers believes there are innovative ways to leverage off this investment so that both rural and urban benefit.

That’s why I was heartened to read the Government is looking at options ‘outside of the square’ such as providing wireless broadband through analogue television broadcasts. Our compliments Minister for taking such an innovative approach.

Though logic dictates this is less than an ideal in rural areas, where analogue reception is often patchy at best. So what about transferring the idea onto urban broadband? Why not look at using frequencies now carrying city-wide analogue television broadcasts as a means of providing some urban residents with wireless broadband?

Surely that would spare up some of the $1.5 billion earmarked for urban broadband? Even better, the savings could be used to spread fibre across the countryside, as there’s not enough in the bank to do it justice right now. So to recap.

If we can…

· acquire more funding from the tax from the increased dairy payout

· increase the new levy (to replace the TSO levy) by at least $20 million per year

· have some flexibility regarding access to the urban broadband fund, recognising the realities of our landscape, and

· seek innovative solutions such as analogue television reception for urban rather than rural environments

…we will make progress on the funding side of things and head towards where Federated Farmers believes we need to be.

The final matter I briefly wish to discuss today relates to actually getting a step change to occur in our rural areas. How and what we do with this funding matters and the targets we set are critical to a positive outcome.

It’s not unrealistic to set our farms a broadband target of 100 megabits per second (Mbps). We’re certain fibre optic is the preferred technical solution, as it provides a 100-year lifespan.

Yet we also understand other complimentary technologies such as wireless and even satellite may have a part to play in the future of New Zealand broadband.

But back to our 100 Mbps target; why do we believe it’s possible? Well, it’s simple - we’ve already done it. Over the past few months, Federated Farmers has been working on a broadband pilot scheme that is already connecting farms to fibre at speeds of 100 Mbps.

The scheme is operating as we speak in a remote valley that was once a notorious dead zone for high-speed internet. And, of course, it is already revolutionising the way that small country community thinks, acts and does business.

We want this aspiration to grow from that small seed into wide spread broadband for our rural community.

To conclude, I want to compliment the Government for actually doing something in the rural broadband space, even though, it isn’t good enough.

We are ambitious for agriculture and our rural communities but we’re not convinced the Government and its officials share that ambition. They need to up their game and take a more flexible, innovative approach to solutions.

We don’t want the Government to show any sign of tunnel vision or think farming doesn’t need broadband. As part of the wider community, it does.

As for Federated Farmers, make no mistake, rural broadband provision is a top strategic priority. It provides a once in a generation opportunity to make a change that will affect the next half century, while setting this country up to remain a world leader.

Minister Joyce, allow me to say we appreciate your efforts to date but the consequences of getting this project wrong, or of doing a half job, will be significant and long standing. That’s why Federated Farmers is strongly urging you not to fall into the trap.

Our country wasn’t built by the ‘can’t do’ club. It was built by those who dreamed of a better life, thought laterally about solutions and stepped up with their ‘can do’ attitude in order to make it happen.

The economic and social success of our country goes hand in glove with the development of reliable, fast broadband technology. Please give us our fair share of the broadband pie or our rural community risks falling behind.

Let’s get it right. Thank you


11 November 2009


Rising returns in the dairy industry are raising organisers hopes of record entries in the 2010 New Zealand Dairy Industry Awards.

“Fonterra’s latest payout announcement has boosted farmer optimism and helps to make people feel better about what they are doing on farm and how they are doing it,” National Convenor Chris Keeping says. “That also makes people more likely to want to enter one of our awards.”

Entries in the awards – the Sharemilker of the Year, Farm Manager of the Year and Dairy Trainee of the Year – are now open and close on December 24.

More than $700,000 in cash and prizes is on offer to entrants through 12 regional competitions and the national final, where the winners of each regional contest compete for national honours.

Ms Keeping says it is pleasing the dairy industry is recovering from the tough times of the past 18 months, as it had tightened the employment market and opportunities for progression.

“Renewed optimism is likely to mean increased job opportunities or investment in staff, so participation and ultimately success in the awards is likely to boost the prospects of dairy trainees, farm managers and sharemilkers keen to make the most of any opportunities.”

Nearly 400 people entered this year’s awards and Ms Keeping hopes more than 400 people will enter the 2010 awards.

The New Zealand Dairy Industry Awards are supported by national sponsors Westpac, DairyNZ, Ecolab, Federated Farmers, Fonterra, Honda Motorcycles NZ, LIC, Meridian Energy, Ravensdown and RD1, along with industry partner Agriculture ITO.

Entry forms can be downloaded from www.dairyindustryawards.co.nz.


Revised Fonterra payout provides farm and economic relief

9 November 2009

Revised Fonterra payout provides farm and economic relief

Federated Farmers is excited by the news that Fonterra is revising its 2009/10 season forecast to $6.05 per kilogram of milksolids (kg/MS). The second upwards revision since the $4.55 kg/MS season forecast was announced in May and reflecting a surge in dairy commodity prices.

“There will be an audible sigh of relief from all dairy farmers as this provides a key marker for all dairy farmers irrespective of whether they supply Fonterra or not. Anything over $6 kg/MS is historically very high,” says Lachlan McKenzie, Federated Farmers Dairy chairperson.

“The rapid appreciation of whole milk powder, up 50 percent in just two months, is frankly unprecedented. While it’s too early to crack open that celebratory carton of milk, Federated Farmers is pretty certain this figure has a solid feel to it.

“Farmers will be more than relieved. Increased farm costs and the impact of council rates meant the $4.55 kg/MS season forecast translated into a cash loss for the average dairy farm according to the Ministry of Agriculture and Forestry.

“The recent upward revisions, the first on 27 September and now today, means the average dairy farm will now be looking at a cash surplus. Economically, this news provides yet more evidence for the Government to pull back its domestic stimulus

“This news also backs the comments of former Labour Party President, Mike Williams, on Q+A yesterday who said that food production and ample water is New Zealand’s economic salvation.

“I think Treasury needs to take a forensic look at the anti-dairy policies emerging in some of the largest regional councils. Farmers need consistency and clarity and without it, the dairy sector’s growth and economic contribution will be seriously impaired.

“On-farm, farmers are trying to crawl back their overdraft limits after months of minimal income. We’re only now hitting summer production averages.

“For the majority of farmers carrying little debt, I imagine they will be looking to bank their gains with the final payout next year.

“For the minority who are highly geared, we anticipate both them and their bankers will be prioritising debt reduction to get their balance sheets into some form of order.

“I think the exuberance dairy got caught up in over recent years is now history.

“As a FAME scholar in 2007, I predicted the long term average for milksolids would be $5.50 but with $2 of volatility. After all last season, we started with a $7 forecast before the commodities implosion took it rapidly down from $6.60 before finishing at a final payout of $5.20 kg/MS.

“The rollercoaster ride we’ve seen over the past few seasons underscores the need for all dairy farmers to be more conservative in the running of their businesses,” Mr McKenzie cautioned


Bouncing Sheep and other stuff to rave on about

Hmmm after reading Jennifer's last blog post about spinning and sheep shearing should I tell this one? Yes I will anyway.

As everyone knows by now I hate sheep. Unless you have top notch fencing - forget about keeping the beggars in. Not just that, they are a very high maintenance animal. Two good things about them. They give you nice wool and they're even nicer to eat. We have one that keeps coming in and out of our farm. We thought it had been shot but NO it's still there and we're still trying to catch the woolly little monkey. Poor sheep has a wire around its back leg. I'm still trying to find someone to come out and put it down with a .22 rifle. Kinder to shoot it in the paddock and put it out of its misery. I hate seeing animals suffer. But this little story is not about that sheep it's about another one we had the unfortunate privilege of meeting yesterday.

It began with our dog going off his nut. Lots of car doors slamming and lots of swear words. Cause? A sheep. A rather large Romney ewe to be exact that somehow had managed to escape from the back of a slow moving stock trailer and get out onto the road. She was not about to let anyone nab her and stick her back in with her fellow ovine passengers. Not her, she shot through our boundary fence with her owner yelling and screaming behind. Joined by one farm dog four kids and a skinny blog writer namely myself bounding over live electric fences (getting zapped) to try and nab the escapee.

Our place is not geared for sheep. Off the ewe went through a gap in the fence back onto the road through another fence and into my neighbour's property. Rex though is a sheep farmer - so the ewe was completely in her element. Meanwhile her owner had lept the fence. Poor guy was totalled. Round and round the paddock they went - sheep at full bore, owner cursing the day he ever got her hard behind. In the end the ewe won the day. She was left behind and the rest? Well there was only one place they were headed and it wasn't to a new paddock or a shearing shed. Wonder how they will taste (sorry Jennifer).

And then, there is the matter of Micah aka Guts.

He was headed for a bullet in the head after yet again, he had jumped the fence back into Terry's. There he stood bellowing and roaring letting me know he wasn't about to be foiled - again. Finding a man with a gun was becoming a headache along with that damned bull's roaring I was not in a very good mood and Micah knew it.

What to do about this troublesome bull.

Friends of my Mum offered to buy him, but getting Micah up the road to the loading yards the way he was? That would have been a mission in the art of suicide - literally. Breeding time for cattle means the bulls get very agressive. So I took option 3. I rang Terry told him what the heck was going on and offered him to my neighbour. I had a gutsful of the little sod and his troublesome habits. Well that was the best thing I did. Terry was more than delighted. It turned out one more bull was needed to tail off the dairy heifers. Micah is half Hereford and half Kiwi Cow (Fresian/Jersey mix) an ideal combination it turned out. My cattle were all first calvers and they had no problem at all with their calvings. The three bull calves we've bred are all nicely put together and look more dairy breed than anything else. River's calf looks almost like a full Jersey. Lucky little toad is remaining a bull and headed for better pastures shortly to a new home. As for the other two they are destined for our freezer later next year. The boys came the other day and got Micah out of the paddock. It was a hilarious site seeing the short fat little toad prancing along down the race bellowing his head off declaring his presence to the heifers on the hill. Just one slight problem to all of that. Micah got to meet the biggest Jersey bull I have ever seen. Those two went head for head and Micah found he was on the losing end. So much for being head honcho. One thing I do know. Micah certainly will get some of those heifers in calf. He got all of our cows in calf again - and it looks like he might have got the Terrorist in calf as well. Whoops. She's 15 months old so we'll see what the situation is when the vet is out in the next couple of weeks to castrate the calves and dehorn the cows. I hope not.

And last but not least this is a pen drawing I did in what I call my little black book (no it does not contain the phone numbers of Tom Cruise or any other celebrity). I played with the photo program as well to produce an image that tells a very sad tale over literally a tail. The inset article (circa 1901) explains a situation that should never have happened. Sadly it did. These beautiful birds are now extinct. They were called the Huia. The male and female were sexually dimorphic. The female had a longer and markedly curved beak and was also larger than the male. These birds mated for life and once inhabited Northland where I live. By the time settlement arrived in the 1840's the Huia was restricted to the lower part of the North Island. I have many bones to pick with the son of Reverend Buller who had bent the laws protecting these beautiful birds and had managed to get a live pair sent to England instead of to an island reserve where perhaps the species might have survived. They didn't. These birds are extinct. They could have been saved. There's another sad tale of willful extinction on Jayne's Our Great Southern Land Blog. And indeed it was a travesty.