Political meddling won’t help meat industry

Labour’s primary sector policy is likely to include meddling with the meat industry:

A capital gains tax on farmland, stringent environmental practices and a revamp of the meat sector are up for consideration as the Labour Party makes a play for the rural vote.

Their policy position is still in development but the party’s primary industries spokesman, Damien O’Connor, was in Hamilton yesterday to gauge reaction on proposals in two days of meetings with sector groups and party faithful in Waikato and Coromandel.

He said farmers would be opposed to a capital gains tax at first but it was necessary to halt “rampant” price increases and to keep land productive.

“People buying farmland should do so on the basis of its productive-return capacity, not on some expectation of a capital gain that effectively makes it more difficult for the next farmer to make a living,” he said. . .

Productive return should govern prices but how will imposing a CGT which increases the price influence that?

It hasn’t worked anywhere else.

In Argentina, for example, it reduces farm sales and increases absentee ownership.

The meat industry was in deep trouble, he said, and needed to be transformed to offer more security to farm workers, businesses and freezing workers. “At the moment there is so much uncertainty, a shrinking base of the number of sheep.. .

The meat industry does have problems but they’re not insurmountable and they won’t be solved by political meddling.

It’s not Labour’s industry, it’s is a collection of private businesses and co-operatives and it’s up to them to sort it out.

Primary Industry Minister Nathan Guy has the right approach:

. . . The best way to put a sector into a downward spiral is to consistently talk doom and gloom. It is not true that the meat industry is on the way out. This industry is capable of truly leading the world in its innovative and profitable approach to selling high quality meat.

I will continue to back this sector and I will continue to acknowledge the great success stories. We need to hear even more pride and passion from everyone involved. . .

My role as Minister is to listen to, to act on behalf of, and to support, this sector.

So I now publicly reiterate statements that I have made in a variety of forums. If a significant portion of the sector, and this means across the whole sector come together with a solution of how they want to better the industry, my door is open. I will listen and I will do what I can to support the sector.

Any substantial change needs to come with a very clear and very broad level of support. I am not prepared to interfere in the structure of a sector without the support of that sector. The Government doesn’t own the industry – you do.

I doubt that anyone in this room wants the heavy hand of government dreaming up bureaucratic solutions that haven’t come from the ground up. . .

The heavy hand of government is what Labour is threatening.

That and the CGT are two very good reasons why they’ll be struggling for the rural vote again.

3 Responses to Political meddling won’t help meat industry

  1. Mr E says:

    Halt land price increases – so that anyone can buy a farm?
    There is formula for a productive sector!

    Currently productivity and product prices drive land prices. Diminsh that relationship to any degree and we simply end up with less productive sector.

  2. Roger Barton says:

    Dare I say it…Damien is well out of touch. IT is not the “freezing industry” anymore. It is a meat industry with a customer/consumer focus. Having invested hard earned money into a venture in the US in the late 1980s I puke when I hear people describe it in dinosaur language. ” We are from the Govt and here to help” is the scariest phrase I know!

  3. JC says:

    I readily admit to bias here. I grew up on Sunday roast beef, however I married a girl from way out back and grew to love roast hogget. But hogget is gone now except for homekill and we’ve basically moved on as the lamb got greyer, pinker and mushier. Almost certainly we could roast lamb better but we can’t be bothered because of other options.

    Lamb loin chops on the BBQ still look good and women enjoy picking them up and worrying at them but a $40 leg of grey lamb isn’t that appealing.

    I don’t really know or even understand too much here, but personally I think there’s a limit to how much sheep meat the international market can hold at premium prices.


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