Ruataniwha Dam: The Winners and the Losers

The following is an Op-ed published in Hawkes Bay Today, Wednesday 9th April 2014, in response to a column by Federated Farmers Spokesperson Will Foley promoting the dam

Federated Farmer’s Will Foley highlights three conflicting issues in his defense of the Ruataniwha dam (HBT 3rd April 2014).

Firstly, he claims that farmers are keen to invest in the dam because ownership allows “more control over its governance.” An excellent point. This is a corporate model dam, selling to suppliers who are not its cooperative owners.

A strong corporate supplying to or buying off generally weaker individual farmers is a game that goes only one way. Those who control will use their monopoly power to dictate a price to farmers which is affordable, but only affordable using time-honoured methods of thrusting costs elsewhere – over the fence, or into the future, to society and the environment, by scaling up and using currently cheap energy. New Zealand’s successful models of farm processing and supply infrastructure have been co-ops. When Ireland corporatised its dairy processing, farmers were exploited. The road to serfdom, social and environmental decline. So yes, be inside the tent, and be very wary of powerful interests.

However, Mr Foley is dreaming if he thinks farmers will get control of this dam, even if a few do invest. They face competing demands for their capital. They must invest in on-farm infrastructure – irrigation and probably dairy conversion – resulting in an already high overhead of debt servicing. They can only invest in the dam through yet more debt.

Secondly, Mr Foley points out that a major investor has pulled out because the dam is too risky. What does this mean for the citizens of Hawke’s Bay whose risk is arguably greater than Trust Power’s?

Lastly, Mr Foley asserts that farmers won’t ‘get rich quick’ out of land value rises or increased profitability. The claim there will be no land value rise is laughable. Water rights and infrastructure development will capitalise into land. They always have. As to operating profitability, Mr Foley is probably correct.

All these conflicting issues raise questions: who, then, will benefit? The banks inevitably. They will lend on the dam construction. They will also lend on the purchase and development of farms. The owners of the dam might also win. They can always increase the price of water not in contract, or sell it to someone else who’ll pay; a fracking company perhaps. The corporates will probably be alright. They usually are under the current ideology that is power and money-affirming rather than life-affirming.

There is a mirror question: who then will lose? The answer is family farms as they sell out to corporate farms, the local community and economy as corporates centralise their purchases, the environment, and we citizens who have been sold the half-truths and had their perceptions ‘managed’ by this council.

The risk to farmers cannot be over-emphasised. If you face extreme overheads associated with a fixed contract for water from a powerful monopoly corporate supplier, high debt servicing for farm purchase and any development costs for irrigation and conversion, then that is an anvil waiting for a hammer. The hammer is the long-run real price reduction of commodities. They are currently spiking because of China and quantitative easing. Yet production of milk is expanding in the third world with nice cheap cost structure. We are even helping them do it.

The seductive promotion of this dam should be seen for what it is. Like all good propaganda, they play on our fears and claim inevitability. They pluck the heartstrings of our colonial identity in the interests of corporate promoters, not our people or our land. We are taught this identify at the feet of our fathers, at our agricultural colleges, and through the media. Produce more. Feed the world. Hope and hail every promise of a temporary increase in our financial margins. All will trickle down to the local community with jobs and increased spending. Meanwhile, an anticipating Fonterra is expanding its milk drying capacity in Pahiatua.

We can no longer afford to think this way. High energy input, high production, low value, retail-dominant industrial agriculture is destructive to family farms, local communities, local economies and local environments.

There are alternatives. We can shift from narrow production to diverse value. From industrial supply chains with our land supplying cheap commodities, to controlling supply chains from the farm, through the local economy to the consumer. From treating land as a large-scale factory, to treating land as a system with enormous potential for variety and value, critical to which is the management of rain and water-holding within the farm itself.

The world is full of failed dams sold on empty promises and hope. Hope is as blind as love it seems. The real hope is in not getting stuck in the industrial past.

Chris Perley

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1 Response to Ruataniwha Dam: The Winners and the Losers

  1. TrueHealth says:

    GOOD one, Chris. I particularly like the last line about our best hope being that we don’t get stuck in the industrial past.

    Keeper coming!\



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