Shane Jones on who is really responsible for dairy farming's woes

Regional Economic Development Minister, Shane Jones. Photo / George Novak

New Zealand dairy farming is going through a "reset" and the Government is not the one responsible for it, says Shane Jones.

"The Aussie banks, they're obviously flexing their muscles. ANZ's sitting on a pile of drama with a lot of their borrowings according to the Reserve Bank. So you can't just blame Ministers in terms of the reset," the Regional Economic Development Minister told The Country's Jamie Mackay.

Public opinion, climate change and environmental awareness are also adding pressure, resulting in the "deep problems of meeting the costs of transitioning to a type of agriculture that has a better social licence".

Jones was quick to point out that the Coalition Government was not anti-farming, a perception he said came about from "a lot of exaggeration and mischief making" from the National Party.

He also believed that farmers should look closer to home when it came to letting the side down.

"I want to work with the farmers, but a lot of the farmers, they have high quality leaders who deliver silvery speeches, but they've got laggards in their owns ranks as well."

Jones dismissed Mackay's suggestion that the Government risked not being able to "pay the bills" if it continued to put pressure on the dairy industry.

"I don't want to impose excessive costs on the dairy industry, but look at the money they waste themselves. Why have they not demanded heads of a platter when they've blown the economic equivalent of $2 billion over the last 18 years in their own Fonterra company?

"Tidy up your own house before you start lecturing me."

Debt was another area where farmers had themselves to blame, said Jones.

"It's the farmers themselves who have borrowed the $47b worth of debt against the dairy farmers - 35 per cent of that debt is on farms that need a $6.20 payout.

"The Government didn't do that. That debt has grown by 340-odd per cent."

Mackay said he was concerned there would be similar debt problems if Jones continued to encourage investment in planting trees, to the detriment of rural areas such as Wairoa.

Listen to the full interview below:

While Jones said he empathised with Wairoa, there were still options for farmers to incorporate forestry into their farming operations.

"We've got $120 million for the cockies to actually keep owning their farms and plant a few more trees on the more precipitous parts of the farms themselves.

"I don't understand why they're not stepping up to the plate and making use of that," said Jones, who admitted he couldn't stop Wairoa farmers from selling their properties for the highest price.

Recently the Government announced proposed legislation to protect horticultural land.

Mackay asked if Jones would consider a similar set-up for pastoral farms.

"We're going to need to look at a way how we can maintain a farm/forestry model ... I want the cockies to be able to exercise their property rights and continue to make these decisions themselves."

Although an influx of investors getting into forestry for carbon purposes and "dislocating rural communities" could pose a challenge for the farming sector, said Jones, he still had faith in trees.

"I do not believe that the billion trees strategy is undermining the viability of farming from Wairarapa to Wairoa."

By Jamie Mackay and Jane Ferguson