Better standing on our own feet

27/05/2009

New Zealand farmers’ anger at the USA’s decision to subsidise its dairy exports is well founded.

Federated Farmers dairy section vice-chair John Bluett says:

“It’s a serious concern. The US is going to subsidise 92,000 tonnes of export product. In perspective, New Zealand only produces 105,000 tonnes, so it’s the equivalent of almost subsidising all New Zealand’s production.”

In the Waikato alone it could cost farmers $180 million and it is likely to mean a lower payout next season.

There may be a small benefit to consumers if the subsidies result in lower international commodity prices because that could flow through to lower retail prices here. But any gain will be more than cancelled out by the pain imposed on the wider economy.

However, angry as farmers are, none are calling for a return to subsidies. Hard as it is in the real world at the mercy of markets, it beats the days which Rob describes when farmers’ incomes went up and down at the whim of the government.

There’s another reminder of how bad that is at Phil Clarkes’ Business Blog:

In France, for example, some 81 dairies have been blockaded and dairy farmers have threatened a national “milk strike” if an ongoing “mediation process” fails to deliver a meaningful lift in prices.

In Germany, meanwhile, six women have gone on hunger strike, while around 6000 dairy farmers took to the streets of Berlin to demand a national milk summit.

And this week the protest headed to Brussels, with a claimed 2000 farmers from 10 member states clashing with riot police outside the EU Council building, while farm ministers discussed the market situation.

Taking what the market offers isn’t always easy, but standing on our own feet beats going cap in hands to governments as they do in Europe to find out not only what they’ll earn but also how much they can produce.

Hat Tip: QuoteUnquote


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