Comparing apples with watermelons

Federated Farmers Southland president Russell McPherson.
Federated Farmers Southland president Russell McPherson.

In the very near future, "drones" could well take the place of workers in forestry and a host of different industries.

It may be a case of not wishing too hard for what the Council of Trade Unions wants because an obvious solution to "carnage", as CTU president Helen Kelly graphically described forestry, is to completely remove the person from the risk equation. No person, no accident.

That's how Federated Farmers vice-president Dr William Rolleston recently explained agriculture's pursuit of technology in The Press. It also explains why we are pretty efficient at what we do; something proven by Enda Hawe, the 2012 New Zealand Sharemilker/Equity Farmer of the Year. When he came to Canterbury from Ireland, he went from milking 30 cows there to sharemilking with his wife, Sarah, 1420 cows here. His family back in Ireland couldn't comprehend how they or Kiwi farmers manage it. I do. It is called productivity.

But do dairy farms really spend 7 per cent of turnover on wages?

The Ministry for Primary Industries' National Dairy Model tells me that a farm with revenues of around $950,000 will spend $109,000 on labour. My maths may be off but that's 11.5 per cent. OK, it is a lot less than 21 per cent the Southland Times editorial used as a yardstick, but that posed the wrong question. The question ought to have been "why are non- farms not as productive as our farms?"

You see, labour productivity in agriculture has always been New Zealand's star turn. Between 1996 and 2010, dairy farming labour productivity soared by almost 70 per cent. During 2008-11, Statistics NZ found only three industries had had annual average increases in multi-factor productivity. Agriculture led the pack with 2.8 per cent, followed by "other services" (up 1.1 per cent annually) and information media and telecommunications (up 0.8 per cent annually). That's the good news. Multi-factor productivity fell in mining (down 7.1 per cent), followed by administrative and support services (down 5.9 per cent). "Houston, New Zealand has a multi-factor productivity problem".

If the solution to unemployment or wages was to ban technology then, yes, we could return to manual typesetting for our newspapers as well as sub-editing and printing them locally. While we are at it, we could also get rid of smartphones and computers, but we'd be the poorer for it.

The thing about productivity is that it is doing more, better, but from fewer inputs. Another thing the editorial's comparison misses is that farming has different cost structures. Trying to compare farm operating costs with that of a supermarket is like comparing an apple to a watermelon. If we reverse the logic of the editorial, I could reasonably write, "The average New Zealand dairy farm with a turnover greater than $950,000 a year, spends 19.9 per cent of it on animal feed. Outside of agriculture, it is close to zero. It's a comparison that has been used to support the argument that non-farms are under-investing in animal feed. But you better believe people will be armed with explanations of why it is folly to take those figures at face value."

Robotic milking is now established on many dairy farms and robotics is seen as a potential breakthrough for the processing of meat. Precision agriculture is seeing the marriage of GPS and tractors for the effective application of nutrients. Today's tractors can drive themselves between waypoints, reducing driver fatigue and freeing the operator to focus on more important tasks.

Raglan's Droidworx picked up the Most Viable Business award at the 2013 Fieldays for its miniature unmanned air vehicles. These can be fitted with cameras, sensors or even spray tanks for selective spraying. Evolved versions could play a big role in surveying pasture quality and quantity, monitoring stock, locating poachers and perhaps applying fertiliser. Driverless tractors and even robotic electric fence movers are not far away.

Another problem with using raw numbers is that they can mislead. If you compare New Zealand to, say, India, the world's second-largest dairy producer, it has a staggering 75 million dairy farms versus our minuscule 12,000 herds. Then again, Indian dairy farms average only 1.5 milking cows or buffalo each.

With all the issues we face, like Plan Change 13 with its questionable underpinnings, a successor industry during the next decade to soak up power going to Tiwai Pt, the drift to Auckland, minerals exploration in the Great South Basin and how we can best harness our almost endless supply of lignite, can I suggest there is more productive material than imprecisely comparing the wage bills of different industries.

Russell MacPherson is the president of Federated Farmers Southland

The Southland Times