Liam Dann: Cold facts don't diminish need to look after farmers

Dairy supply constraints in New Zealand typically push global prices up. Photo / Brett Phibbs

Economists and business writers tread a fine line between staying true to the data and the reality of the experience suffered (or enjoyed) by individuals.

There is a risk of coming across cold and robotic.

Take the Mycoplasma bovis outbreak.

I felt a little cold hearted this week pointing out the scale of the cattle cull is not statistically large.

The New Zealand farming industry killed 4.2 million cattle last year, it killed 4.8 million in 2015.

The cull of about 150,000 across two years is well inside normal annual fluctuations.

It won't present any significant issues for the meat processing industry.

We won't see apocalyptic-looking funeral pyres burning across the countryside as was the case in the British Foot and Mouth disease outbreak of 2001.

We might see some impact on total dairy production but, economists point out, supply constraints in New Zealand typically push global prices up – offsetting the loss.

Yet some farmers may lose their entire herds. Some may never recover.

This will be devastating for those concerned and have serious flow-on effects through their communities unless compensation and support are managed extremely well.

At the official press conference on Monday, led by the PM and Minister of Agriculture, Rural Women president Fiona Gower warned of the risks of increased family violence and suicide.

This is serious stuff.

But the macro-economic impact on whole country is marginal. Economists are taking a watching brief but none has revised forecasts for GDP growth, unemployment or Reserve Bank interest rate moves.

They are keeping the issue in context and it is important we all do the same.

I prefaced my news commentary with the line: "Not to diminish the serious impact on individual farmers..."

It was a genuine comment but I fear it sounded glib and it did seem to upset some people.

It's true that the rest of my words were clearly written to diminish something.

My target was the shock and horror coming from breathless townies - in social media, letters to the editor and in some of the news coverage.

It strikes me that most of the farming community and agricultural industry has approached the M. bovis issue in an pretty matter of fact and realistic way.

I'd be a breathless townie too if I hadn't spent three years being perpetually gob-smacked as primary industries editor when I first started at the Herald.

The scale of the New Zealand farming industry is staggering and it is still largely unrecognised or misunderstood by the bulk of New Zealand's increasingly urban population.

It is easy to forget how much our economy relies on it and how vulnerable that makes us.

New Zealand exported about $53 billion worth of stuff to the world last year. About $32b worth of that stuff was food and beverages.

Throw in trees and primary industries account for $40b - or 75 per cent - of what we export.

I'm a big champion of the tech sector because we need to diversify - but we also need to be realistic.

Most of the recessions New Zealand has faced in the past decades have been caused by issues relating to agricultural exports - either drought or sharp falls in international commodity prices.

That's why all governments - including this left leaning, mildly Green coalition - give the industry special treatment that can sometimes seem unfair.

It's also why the reporting of biosecurity issues is an issue of national importance.

Painting an overly negative picture risks making the outcome even worse.

I've seen the Kiwi dollar plunge on false rumours of a Foot and Mouth outbreak.

Agricultural disease remains one of the triggers that global currency traders are most alert to when they think of New Zealand.

It was relief to watch the Kiwi dollar hold steady and even rise a bit as news of M. bovis eradication efforts broke on Monday.

It was evidence that the Government has handled the process well to this point.

But there are broader risks for New Zealand exporters. All our trading partners already live with M. bovis in their cattle herds. But consumers don't necessarily know that.

"New Zealand to cull 150,000 cattle after disease outbreak" doesn't sound like a great advert for our meat and dairy products.

But that's the headline that went out through British, European and Asian news agencies.

Our exporters will be fine at an official level – but officials don't determine consumer behaviour.

Then there is the risk that rural community concerns spill over unnecessarily into local consumer and business confidence.

Dairy prices are back at historically high levels, the terms of trade for all of our export commodities are strong.

There is the opportunity for a rural recovery to drive economic growth in the next couple of years as a cooler property market and capacity constraints slow urban growth.

This would be a positive rebalancing for the New Zealand economy - back towards the productive sector.

Detailed economic outlooks by the NZ Institute of Economic Research and the OECD last week presented upbeat forecasts for New Zealand, with GDP growth holding at three per cent.

If the agricultural sector can lead the way, we'll effectively be entering a fresh cycle of economic growth without having suffered the recessionary meltdown we've become accustomed to.

With that comes the opportunity to make the country better for all New Zealanders.

It seems like a pretty good reason to make sure we look after our farmers.