Rural round-up

September 5, 2017

NOSLaM meeting: 

Randall Aspinall, from Mt Aspiring Station, will speak at a North Otago Sustainable Land Management Group meeting at Five Forks on Thursday.

He will discuss the challenges of being a high country farmer in the Wanaka area and share lessons that had been learned.

NOSLaM was revived several years ago by a group of farmers who were keen to improve water quality and promote good pastoral management practices. . .

Water scheme grew from ground up – Hamish MacLean,

In the 1950s, rural water schemes sprang up in North Otago but the 1989 local government reform, and then progressively stringent legislation aimed to improve drinking-water standards, started to take the control of water schemes away from the farmers who used them.

This winter, after a three-year trial, a community-led non-profit company signed a five-year agreement with the Waitaki District Council to manage four rural water schemes from the grass-roots, Hamish MacLean reports.

Corriedale Water Management Ltd was formed when the Waitaki District Council rewrote its water bylaw four years ago.

A “fundamental” philosophical difference separated the way its users wanted to operate and the way council-owned water schemes were expected to work, chairman Bill Malcolm, of Airedale, said. . .

Does OAD lift productivity?:

In their quest to increase six-week in-calf rates, a growing number of farmers are looking at once-a-day (OAD) milking as a way to improve herd reproductive performance. How effective is this strategy?

The success of taking this approach depends on how long cows are milked OAD before mating. It’s important to note that the benefits of whole-season (or full lactation) OAD on herd reproduction don’t necessarily translate to the use of short-term OAD milking around mating. . . 

Vivid flavones from a vivid country – Joelle Thomson:

Wine writer Jamie Goode says simplicity is key in communicating New Zealand wine to global markets.

The British blogger visited New Zealand to speak at the country’s second Organic and Biodynamic Winegrowing Conference in Marlborough in June this year. His message was emphatic.

“You will maintain an edge in international markets by sticking to a simple clear marketing message going forward in the same way as you have done in the past with Sauvignon Blanc from Marlborough. It’s consistent, reliable and there are no nasty surprises. . .

ExportNZ has released its manifesto for the 2017 election:

ExportNZ Executive Director Catherine Beard says exporting is critical for the economy and voters should choose a Government that supports trade.

“The single biggest policy issue is whether there is support for TPP-11 and other key potential trade deals. These have the best practical ability to grow jobs and incomes,” Catherine Beard said.
Exporters wanted to see a Government keeping the pressure off the New Zealand dollar by balancing the budget and keeping interest rates low through a focused target on inflation. . .

Export vital for New Zealand’s prosperity:

Support for TPP11 and the wider trade agenda by the incoming government is crucial for New Zealand now and in the future, says the EMA.

The need to speed up the growth of exporting was one of the key recommendations in the EMA 2017 Election Manifesto.

“As a nation we rely heaving on trade for jobs and growth. With a population the size of ours, we need a vibrant exporting sector for New Zealand’s prosperity, says Kim Campbell, CEO, EMA. . .


Get in behind trade

July 10, 2017

Export New Zealand is challenging all political parties to get in behind trade:

ExportNZ says all political parties should be supporting international trade.

ExportNZ today released a report analysing the benefits to all New Zealanders from freely traded exports and imports. The Benefits of Trade shows that New Zealand’s export sector directly and indirectly accounts for nearly three quarters of a million jobs, and that exports bring in 43 percent of New Zealand’s GDP.

“This is a massive chunk of our economy. Without exports we would literally be a third world economy,” said ExportNZ Executive Director Catherine Beard.

“New Zealand exporters – manufacturers, primary producers and technology and services exporters – earn the foreign exchange that pays for all the good things we enjoy. Without a vibrant export sector, we would not be able to afford the infrastructure, health, education and welfare services that are the mark of a first world nation.

Exports enable us to pay our way in the world.

We can’t afford imports unless we successfully export.

It’s not just luxury goods but basic requirements for first world living standards including health supplies, machinery and the food we can’t grow ourselves that we need to buy from other countries.

The money to buy those goods come from our exports and the freer we are to trade the better off we all are.

“We have a brilliant export sector keeping our economy afloat, and we should all be supporting it.”

Catherine Beard said with the approach of the 2017 Election, it was important to hear from all political parties on how they would support trade and free trade agreements with other nations.

“It’s time for all political parties that want a higher standard of living for Kiwis to get in behind New Zealand being a participant in high quality free trade agreements wherever in the world we can get them.

Catherine Beard says in a world of increasing protectionism it is important for all political parties to be united behind an ambitious free trade agenda, because the benefits to New Zealand are overwhelmingly positive.

“The data indicates that in a world where free trade was the norm, New Zealand’s GDP would be $18 billion higher, with an additional 62,000 jobs.”

Key points on the benefit of trade:

 The tradable sector directly and indirectly accounts for $85 billion (43%) of New Zealand’s real
GDP and almost three-quarters of a million jobs.
 Trade helps Kiwi households buy higher quantities of goods and services with their wages, and
lets them access a wider variety of products.
 The gains to New Zealand households from improved product choice from trade alone come
to $3.9 billion, or around $2,300 per household, based on estimates from the literature.
 One US study estimates that trade contributes about 30% of an average US household’s
purchasing power. In New Zealand this share would be far higher, given how trade-reliant we
are compared to the US.
 When tariffs were removed in the late 1980s in New Zealand, import prices dropped sharply,
boosting Kiwi households’ purchasing power by 2%.
 Further multilateral trade liberalisation would deliver huge benefits to New Zealand: the OECD
estimates that New Zealand’s real GDP would increase by $18 billion over the long run if G20
tariffs and non-tariff barriers were halved. This scenario would also create over 42,000 skilled
jobs and 20,000 low-skilled jobs.
 ‘Trade policy’ is now about much more than reducing border tariffs on trade in goods:
services, investment, global value chains, non-tariff measures, people movements and the
flow of technology are hugely important.
 Global services trade liberalisation has been estimated to potentially lift New Zealand’s per
capita GDP by over $1,000 by 2020.
 A comprehensive Trade Facilitation Agreement which reduces red tape associated with trade
could reduce trade costs by 14.5% globally and boost global GDP by between US$345 billion
and US$555 billion per year.
 The reduction of non-tariff measures could deliver significant gains for New Zealand. The cost
to New Zealand exporters of these measures in the APEC region has been estimated at $8.4
billion.
 Around 70% of the economic benefits accruing to New Zealand from the TPP are estimated to
come from a reduction in non-tariff barriers.
 There are some valid concerns about how the benefits from globalisation are shared, but its
positive impacts are undeniable: the World Bank states “The number of people living in
extreme poverty around the world has fallen by around one billion since 1990. Without the
growing participation of developing countries in international trade, and sustained efforts to
lower barriers to the integration of markets, it is hard to see how this reduction could have
been achieved”.
 Addressing New Zealanders’ concerns about globalisation and the future of regional economic
integration in will require more detailed research into the benefits and trade-offs involved in
‘new’ trade issues, and continued reminders about the costs to households of more
isolationist policy settings.

Anyone old enough to remember what life was like in New Zealand before the trade liberalisation of the 1980s and 90s won’t want to go back there.

Domestic goods were usually more expensive and of inferior quality to imports.

Imported goods were in short supply and usually had inflated prices owing to tariffs.

People didn’t travel as easily or often as they do now and when they did they returned laden down with goods which were not available or far more expensive here.

Any policies which limit trading opportunities for exporters or hamper the ready access to imports will hurt us all, and the people who will be hardest hit will be the poor.

With freer trade we all benefit and can even sell avocados to Mexico.


Paying our way again

December 20, 2013

New Zealand’s GDP increased 1.4% in the September quarter on the back of dairying.

The strong increase in dairy production was the main contributor to a 17.0 percent rise in agriculture, which makes up about 5 percent of the New Zealand economy.

“Dairy farming has really bounced back from the drought this year,” acting national accounts manager Steffi Schuster said. “The increase in agriculture is the largest in more than 25 years, as good weather boosted production well above the weak June quarter.”

Dairy product manufacturing also increased this quarter, which contributed to a 1.5 percent rise in total manufacturing. While manufacturing production was up, exports of dairy products fell this quarter, leading to a build-up of inventories. The $770 million increase in total inventories this quarter is the largest build-up since the series began.

Increases in agriculture and manufacturing production were partly offset by declines in:

  • Construction (down 1.0 percent), as falls in infrastructure and commercial construction outweighed an increase in housing construction. Investment in housing was up 8.5 percent from the previous quarter.
  • Business services (down 0.8 percent), with most sub-industries down, except for architectural and engineering services.

Economic activity for the year ended September 2013 was up 2.6 percent.

The expenditure measure of GDP was up 1.1 percent in the September 2013 quarter. The main movements were:

  • Investment in fixed assets (up 3.1 percent), driven by increased imports of plant, machinery, and equipment. This was also reflected in a 4.5 percent rise in imports of goods and services.
  • Build-ups in manufacturing and distribution inventories, as supply of goods exceeded demand this quarter.
  • Volume of spending by New Zealand households (up 0.4 percent), mainly due to increased spending on durables like furniture and motor vehicles.

A lot of the increased dairy production is going to China which in November passed Australia as our New Zealand’s top goods export destination on an annual basis.

“China is now our top export destination on an annual basis, just under two years after it became our top annual imports partner in December 2011,” industry and labour statistics manager Louise Holmes-Oliver said.

In November 2013, goods exports were valued at $4.5 billion, up $647 million (17 percent) from November 2012. Exports to China hit record levels in October 2013 and November 2013. Exports to China were valued at $1.2 billion.

Dairy contributed the most (63 percent) to the total exports to China, valued at $774 million, in November 2013. This is the highest value of dairy exports to China for any month. Total dairy exports were valued at $1.7 billion – also the highest for any month.

The value of imported goods was $4.3 billion – down $124 million (2.8 percent) from November 2012. A fall in intermediate goods, due to crude oil, affected this movement. Consumption goods also fell, while capital goods rose.

The trade balance for November 2013 was a surplus of $183 million (4.1 percent of exports). This is the first trade surplus for a November month since 1991. This follows a trade deficit in October 2013, which was the lowest deficit for an October month since the mid-1990s. . .

The lowest trade deficit for October since the mid 1990s and the first trade surplus for November since 1991 signals an encouraging trend back to paying our way again.

We can’t produce all we need and we can’t consume all we produce.

Sustainable growth depends on producing and selling goods and services of greater value than those we need, or want, to buy.

We haven’t been doing that for far too long.

This news from Statistics New Zealand and a survey from Export New Zealand showing a lift in exporter confidence, in spite of the high dollar, indicate a welcome change to that.


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