Regulating stock movements during Mycoplasma bovis outbreak

Mycoplasma bovis (M.bovis) is a bacterial disease commonly found in cows all over the world. First detected in New Zealand in July 2017, it has affected a small number of farms in the South Island and Hawke’s Bay. The Ministry of Primary Industries (MPI) is working hard with farmers to control the disease and, if possible, eradicate it from New Zealand.

M.bovis causes a range of diseases in cows including mastitis that doesn’t respond to treatment, arthritis, pneumonia and late-term miscarriage. Although it affects cows, it poses no risk to food safety or human health. M.bovis is mainly spread through close and prolonged contact between infected animals, through the movement of stock, contaminated equipment and feeding untreated milk to calves. It’s not windborne, it doesn’t spread through streams or rivers and, thankfully, it is a relatively slow-moving disease.

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Over The Fence

Stock movements

Gypsy Day approaching and Mycoplasma bovis

First detected in New Zealand in July 2017, Mycoplasma bovis (M.bovis) has become an issue for our agricultural sector.

Gypsy Day is fast approaching for our dairy farmers which sees increased stock movements around New Zealand. If you are buying cows, we recommend that you have the protection of a written agreement. This agreement can provide warranties and provisions around the rejection of animals.

Such protections are not available, obviously, when moving your own stock to another property you also own or on which you sharemilk. We recommend you check for Restricted Place Notices and Notices of Directions when moving stock/farms.

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Easements – get them right first time

In the Autumn 2015 issue of Rural eSpeaking we pointed out some aspects of rights of way and water easements, and the rights attached to them.

Expanding on this topic, we discuss another feature of easements that is important and, in many cases, is not properly understood – the permanence of an easement and issues that might arise from that over time. Virtually all easements are granted ‘in perpetuity’ which means they last forever.

When granting an easement over your property, or you’re purchasing a property that is subject to easements, you need to consider not only the situation as it is now but also potential issues that might arise over time.

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Having your own terms of sale

Rural businesses are no different from any other producers in the market in the sense that the ultimate fruits of their labours are, at some point, sold to a third party, whether that is to a meat company, a fruit packer or exporter, or a wine or dairy company.

All sales of product are governed by a contract of sale, the terms of which are either set out by statute (see below) or in a supply agreement or a contract to purchase goods or services of some description. Most of these contracts are industry standard-type contracts and, in many cases, the rural producer has little say over what goes in those contracts; most large fruit exporters, winemakers or dairy companies have their standard terms and conditions and won’t negotiate individual contracts with individual suppliers.

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Loan Documents: Read the fine print, there could be some surprises

Whether you like it or not, you will probably need to fund your farming operations with borrowing from one of New Zealand’s main trading banks.

The main terms that borrowers look at when signing loan facility documentation relate to the cost of the borrowing: interest rate, the amount of the repayment sums and the term of the lending. The security required is usually a mortgage over the farm land and, more often than not, a general security agreement which is effectively a mortgage over all of the farming entity’s assets that are not land such as stock, crops, machinery, receivables and so on.

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Farm Management Plans

A new (uncertain) dawn for farmers

One of the hot issues in the recent election campaign was raising the water standards in our rivers and lakes. Regional authorities are the bodies that are charged with implementing the government’s water standards policy.

All regional authorities have implemented, or are in the process of implementing, plan changes that are designed to enable them to achieve the minimum water standards set by government.

Reduce leaching into waterway

One of the aims of these plan changes is to reduce the amount of nitrogen and/or phosphorous leaching from farms into waterways.

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Over the Fence

Health and safety legislation sentencings expected

There are a number of developments in health and safety expected later this year. These include the first sentencings under the new Health and Safety at Work Act 2015 that are due to be released. As well, WorkSafe is expected to launch its Health and Safety Improvement Performance Toolkit. We will continue to monitor this and update you in the next edition of Rural eSpeaking due in summer.

 

Judgements of rural interest

Farmers unsuccessful in their claim against rural contractor

In May this year the High Court released its judgement in the case of A P and A W Hughes Limited v Lyall.[1] In 2014 Allan Lyall was contracted by A P and A W Hughes Limited to harvest a pea and barley crop for silage. When the silage was opened for feeding, which was three months after harvest, it was found to be in poor condition. The farmers attempted to sue the contractor for $300,000 worth of damage to the silage crop seeking compensation for the loss of winter feed.

The High Court found that the contractor used the skills expected of a reasonably competent silage contractor to implement the fall-back option of cut rake and chop that was agreed to by the farmers at the time of harvest. Despite this, soil was still incorporated in the silage by this process resulting in a loss of silage quality. The judge found the silage was poor quality because the crop was over-matured when it was harvested and this was not the contractor’s fault; it was simply the consequence of adopting an option agreed to by the parties to address the circumstances.

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Over The Fence

Further implementation of bobby calf regulations

Last year new regulations for young calves were introduced and took effect from 1 August 2016; we covered this in Rural eSpeaking, Winter/Spring 2016.

On 1 February, a new regulation came into force; bobby calves are to be fed at least once in the 24 hours before slaughter (a reduction from 30 hours).

Further regulations are to take effect this year including:

  • Proposed 1 August 2017: Suitable shelter will have to be provided for young calves before and during transportation, and at points of sale or slaughter, and
  • Proposed 1 August 2017: Loading and unloading facilities will have to be provided and used when young calves are transported for sale and slaughter. The facilities must be designed so that a calf is able to walk on or off the transport.

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Good Husbandry

Give it some thought when buying or selling

Agreements for the sale and purchase of rural land generally contain a ‘good husbandry’ clause. This clause is often inserted into the agreement as a ‘boiler plate’ or standard clause by real estate agents when preparing contracts. We discuss why it’s better to tailor-make this clause to suit each transaction.

The standard clause is often worded along these lines:

From the date of this Agreement until settlement, the Vendor shall continue to farm the property in a good and husband-like manner and in accordance with approved good farming practice in the district and shall neither overstock nor under-stock the property, nor do anything to impoverish the soil nor remove or damage any improvement or fixtures on the property.

However, both a seller and a buyer should give careful thought to the wording of this clause and its implications; it should be tailored to suit the particulars of any given transaction. This is particularly so for transactions where settlement is some time out from when the agreement was signed. It also needs to relate to properties where specific types of farming are being carried out.

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Clean Water Package 2017

What does this mean for farmers?

The government recently announced its Clean Water Package. The release has caused considerable controversy, largely around the proposed target of 90% of rivers and lakes being ‘swimmable’ by 2040 and, in particular, the E.coli guidelines for swimmable rivers being 540 E.coli per 100mls.

The Green Party and Labour Party were vociferous in their criticism of the government’s announcement largely because the amount of E.coli that can be present in swimmable water has doubled.

As well, Forest and Bird advised the Minister for the Environment, Dr Nick Smith and the Minister for Primary Industries, Nathan Guy that it was withdrawing from the Land and Water Forum. Forest and Bird is a very influential pressure group in this arena; it took legal action in relation to the proposed Ruataniwha Dam and that matter is still being litigated.

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