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Pasture Renewal a $3.8 billion Economic Windfall

27 March 2012

NEW ZEALAND - With an increased focus on innovation, another way to generate greater export returns is to do things a lot smarter. Federated Farmers believes pasture renewal epitomises doing the basics better and with new seed types, could easily generate billions of dollars more in exports.

“With fertiliser use increasing for the first time since the 2008/09, Federated Farmers believes the time is right to focus on the engine room of the economy; our farm pastures,” says Bruce Wills, Federated Farmers President, speaking from the launch of the Pasture Renewable Charitable Trust’s (PRCT) Berl Economics written analysis of pasture’s value.

“Instead of using fertiliser to squeeze more production out of tired pasture, fertiliser use is more effective if applied to renewed pasture. Farmers plan for fertiliser but it’s no panacea if your pasture is getting beyond its use-by date.

“What’s more, renewed pasture helps to retain and maximise fertiliser where it’s being targeted. There’s an important financial and environmental dimension here as under utilised fertiliser potentially becomes a run-off issue.

“That’s the clear message I took away from the PRCT launch of a report about the value of pasture to the economy. It’s a message we need to communicate wider.

“A greater culture of pasture renewal in the sheep and beef sector could, within 12-years, increase farmgate value by upwards of 30 per cent; from a current figure of $4.6 billion to upwards of $6 billion.

“The message is similar for dairy. Planned pasture renewal within eight years could lift farm gate value by 24 per cent, from a current $11.6 billion to upwards of $14.4 billion.

“In other words doing the basics better, through pasture renewal, is one means to increase our farm gate revenues by upwards of $3.8 billion dollars over the medium term.

“Three years ago, when the first report was done by the PRCT, many farmers were in survival mode. Today, we have a much more receptive on-farm investment climate as increased fertiliser application rates show.

“As sheep and beef pasture renewal is running at only two per cent and 6.6 per cent for dairy, I guess we also need the banks to understand the critical role pasture renewal plays in reducing financial and environmental risk.

“Federated Farmers congratulates the Pasture Renewable Charitable Trust and Berl Economics for their excellent work. Federated Farmers is committed to spreading the message,” Mr Wills concluded.

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