Arable farmer expands while others ‘dig in’

Press, 17 June 1988, Page 16

Arable farmer expands while others ‘dig in’

By

JOHN HARFORD

Taking the initiative and striving for better efficiencies is a philosophy Robert McDowell has applied to his work with Federated Farmers and to his own farm at Mayfield.

While many farmers are “digging in,” cutting spending and hoping to ride out the recession, Mr McDowell has been expanding his operations. He bought his 437 ha property, Which he now farms in partnership with his wife, Margaret, during the boom in land values in the early 1980 s. The purchase left them with a very high debt loading.

In October last year they took on a nearby 238 ha farm which they will rent for six years. The rental property had been run down and needed a lot of redevelopment. One of the conditions of a “reasonably low rental” for the property was that the McDowells would have to improve the farm.

Although Mr McDowell has now increased the spending, the lower rental of the extra 238 ha means their total debt servicing per hectare is much lower than it had been.

Mr McDowell said farming and economic patterns in the United States usually emerged in New Zealand two or three years later. Family farms in the United States were under pressure while smaller hobby farms and much larger farms were more viable.

“I could see the same thing starting to happen here so I took action to counter it by expanding onto the rental property,” he said.

About one third of his land is planted in arable crops such as wheat, barley, peas, lentils and grass seed. The other two thirds is occupied by 4800 ewes, mainly Coopworths.

A good economy of scale has been achieved with farm machinery by spreading equipment over Mr McDowell’s farm and the 190 ha next door farmed by his brother Alastair. The brothers had farmed both properties in partnership until 1982.

The extra rental property means a lot of extra work for Robert and Margaret McDowell. The couple had planned to spend a lot of money to develop the rental farm in the first year and make money from it in the next five years. “These days if you develop land and can’t make it pay for itself in five or six years then you are down the tubes because of the high interest rates,” he said. But a bad season has put the McDowell’s plans back one year. The rental property was in the path of a hail storm earlier this year which devastated some farms in Mid-Can-terbury. Linseed, barley, and browntop crops were wiped out on the farm.

Mr McDowell estimates he lost $26,000 of income in the storm. A cash crop of browntop had the seed thrashed out by the hail.

“It could have been worse. The storm might have wiped out another crop of barley which we had taken out the day before.”

In spite of the extra

expense and the loss of crops, Mr McDowell says he would be worse off if he did not have the extra rental property. “We have just got to be careful for the next five or six years,” he said. The hardships made it easy for him to sympathise with the plight of farmers who he represents as the chairman of the arable section of Mid-Canterbury Federated FArmers, the junior vice-chairman of the Arable Section Council, and the chairman of the Pulse Growers Committee. Sharing those problems can also be a hinderance. “It can cloud your thinking at times when you become pressed with your own problems.” His involvement in Federated Farmers probably had more to do with Jaycees. The service organisation gave him a grounding in the workings of committees and got him over a reluctance to stand up and talk. He was made chairman of a committee st up to look at building squash courts in Mayfield. Just 15 months later, the courts were open and running debt free. About the same time he attended an annual meeting of the Mayfield branch of Federated Farmers. Almost everyone else there had already served as vicechairman or chairman so Mr McDowell began work as a federation representative. He served two years as the Mayfield branch chairman became

vice-chairman of the MidCanterbury section then junior vice-chairman of the Dominion Arable Section.

He gained a high profile in early 1986 when tipped off that a milling company was planning to import Australian wheat into Canterbury although growers still had milling grade wheat which they had not sold. A protest was organised for the Lyttelton waterfront, where the wheat was to be landed.

“We had so many farmers committed to coming, I was not sure how we were going to handle them all.”

The protest was not needed as the milling company backed down and the wheat was sent to Tauranga instead. Mr McDowell and a few others went north as a token protest. “We felt we had to get the message across.” Although the small wharfside protest did not stop the wheat coming into New Zealand, it did help draw attention to United Wheat growers’ case for counterveiling duties on imported wheat. “Until then, the fight had been in the background with lawyers. The protest put a public face on it and showed people we were disadvantaged. “I suppose I’m prepared to follow up issues that others are not so keen to. I’m more prepared than some to take up new issues and look for challenges,” he said. As the newly elected chairman of the arable section of Mid-Canterbury Federated Farmers, Mr McDowell is hoping to install the need to take

the initiative into farming colleagues. “There are two ways of getting through this recession. One is to hibernate, dig in and not spend. That way the people you deal with have to restructure or go under. But when you come out of hibernation the others do too and they will be just as hungry as before. “If you haven’t got improved efficiencies in services by the end of the recession, you’ve not gained much. “We have got to get back the initiative so that when farming does pick up we have got a lean machine working for us and we can make profits again.” Striving for better services for the arable sector was something Mid-Can-terbury farmers would have to do because they were the highest concentration of arable farmers in New Zealand.

“We can’t rely on others to do it for us. We’ve got the most commitment to it.” Mr McDowell does not think the arable sector will “come right” in the short term. New Zeland’s economic

reforms were taking longer than expected to work, the need for arable farmers to spend earlier than other farmers and receive payments later meant they were most affected by the changes. But switching back to sheep is not the answer.

Arable cropping still brings a greater gross margin then sheep farming, he said. “We have got to put a greater emphasis on getting better efficiencies in our costs and in the people who handle our crops.”