Dairy’s $7.8b contribution to NZ GDP

December 19, 2018

A report from the NZ Institute of Economic Research (NZIER) shows the positive contribution dairy makes to New Zealand:

Dairy contributes $7.8 billion to New Zealand’s GDP…

* The dairy sector contributes $7.8 billion (3.5%) to New Zealand’s total GDP.
* This comprises dairy farming ($5.96 billion) and dairy processing ($1.88 billion).

…and remains New Zealand’s largest export sector

* Despite the recent drop in global dairy prices, dairy remains New Zealand’s largest goods export sector, at $13.6 billion in the year to March 2016. Over the past five years, average export revenue has been $14.4 billion.
* It accounts for more than one in four goods export dollars coming into New Zealand (29% in 2016, down from a high of 35% in 2014).
* Dairy export growth has averaged 7.2% per year over the past 26 years.
* The dairy sector exports twice as much as the meat sector, almost four times as much as the wood and wood products sector and nine times as much as the wine sector. It generates almost four times as much export revenue as export education.

Dairy provides jobs and incomes for over 40,000 workers…


* The dairy sector employs over 40,000 workers, with 27,500 on farm and a further 13,000 in dairy processing.
* Dairy employment has grown more than twice as fast as total employment, at an average of 3.7% per year since 2000.
* It has created jobs at a faster rate than the rest of the economy in all but 5 territorial authorities across New Zealand.
* The sector paid $2.4 billion in wages to dairy farming and processing workers in 2016.
* The dairy farming sector has the second highest average wage ($46,640) in the wider farming sector, behind deer farming ($48,320).
* The average dairy processing wage is $72,910, well above all other forms of food product manufacturing. The average food manufacturing wage is $58,200.

…and plays a crucial role in supporting regional economic development

* Dairy provides over 1 in 5 jobs in three territorial authority economies (Waimate, Otorohanga, Southland); and over 1 in 10 in a further eight (Matamata-Piako, South Taranaki, Hauraki, Waipa, South Waikato, Clutha and Kaipara).                       

* The dairy sector accounts for 14.8% of Southland’s economy, 11.5% of the West Coast economy, 10.9% of the Waikato economy, 8.0% of Taranaki’s economy and 6.0% of Northland’s economy.

Dairy’s impacts flow well beyond the farm gate and processing plant

* Dairy farming supports a range of supplying industries: in 2016 farmers spent $711 million on fertilisers and agro chemicals, $393 million on forage crops and bought over $190 million of agricultural equipment.
* Farmers also spent $914 million on agricultural services, $432 million on financial services and $197 million on accounting and tax services.
* The dairy farming sector provides around $400 million of intermediates to the meat processing sector.
* As well as taking farmers’ raw milk, the dairy processing sector also spends significant amounts on packaging ($288 million in 2016), hired equipment ($199 million) and plastics ($174 million).
*  DairyNZ estimates that farmers have spent over $1 billion in recent years on environmental management systems such as effluent systems, riparian plating and retiring sensitive land, or about $90,000 per dairy farm.
* The processing sector has also made substantial capital investments in the past four years, adding over $2 billion to New Zealand’s capital stock.

 

Further global or regional trade liberalisation would enhance the sector’s ability to support the government’s ‘Export Double’ target

* If all global dairy tariffs were eliminated, and New Zealand’s milk production is held constant, the value of New Zealand’s dairy exports would increase by $1.3 billion, generating a $1.03 billion increase in New Zealand’s nominal GDP.

Preventing a retreat to protectionism has considerable value to the New Zealand economy too

* In a separate modelling scenario, if global dairy tariffs increased from their average applied rate to their average bound rate, New Zealand’s dairy exports would fall by $2.3 billion, leading to a $1.66 billion fall in New Zealand’s nominal GDP.
* This provides an indication of the value of historical dairy tariff reductions due to multilateral, plurilateral and bilateral trade negotiations, or the benefits of preventing any backsliding towards trade protectionism.

Those last two points show the value of free trade and the cost of protection.

This report doesn’t mention on-farm investment nor does it note the social impact of dairying.

There were four houses on our farm and our two immediate neighbours’ before we converted to dairying. There are now 15 and the 16th will be built early next year.

Some of the people in the houses are young travellers. Others are a bit older with families. All contribute to the economic and social fabric of the district.

The environmental impact of dairying isn’t mentioned in the report either.

There is no doubt intensification has had a detrimental affect on water quality and the vast majority of farmers, with the encouragement from DairyNZ, Federated Farmers, regional councils, and irrigation and dairy companies are now doing everything they can to remedy that.

Water quality didn’t deteriorate overnight and it will take time to improve it.  A few poor performers are still letting everyone down but it is unfair to tar the whole industry with their dirty brush.

The NZIER report shows the positive impact dairy makes and it is that $7.8 billion contribution to GDP that helps pay for the first world services and infrastructure we need.

Environmental concerns can not  be ignored but any action taken to solve problems must take into account the economic and social impact or it will sabotage the government’s wellbeing goals and we will all pay the price of a much lower standard of living.


Paying for poor policies

August 31, 2018

Business confidence has dropped to the lowest point for 10 years:

In the August ANZ Business Outlook Survey headline business confidence dropped a further 5 points to a net 50% of respondents reporting they expect general business conditions to deteriorate in the year ahead.

However, firms’ perceptions of their own prospects are a much better gauge of actual economic outcomes. This series stabilised at a net 4% expecting an improvement, well below the long-term average of +27%. By industry, manufacturers’ expectations dropped 11 points to become the least positive about their own activity (-4%), while retail and services improved somewhat.

Turning to the survey detail:

* A net 5% of firms are expecting to reduce investment, down 6 points. It is rare for this series to be negative.

* Employment intentions fell 8 points to -6%. No sectors are positive.

These two points are most concerning. Businesses reducing investment and with negative employment intentions will have a direct and negative impact on the economy.

* Profit expectations were flat at -17%. Retail and manufacturing are the weakest sectors at -27% (up 1%pt) and -28% (down 12%pts) respectively.

* Firms’ pricing intentions fell 2 points to +27%. They are strongest for construction but also lifted for retail. Inflation expectations were flat at 2.2%.

 * Residential construction intentions eased 3 points to +13%, while encouragingly, commercial construction intentions bounced 13 points to -4%. . . 

The economy is delicately placed. But it seems increasingly inevitable that wariness amongst firms will have real impacts, in the near term at least, as investment and employment decisions are deferred. . .

The outlook isn’t all bad.

But firms have real concerns about industrial relations policy, minimum wage hikes and costs more generally – and particularly about their ability to pass on higher costs and maintain profitability. Troubles in the construction sector appear to be starting to cause stresses in related firms. And exporting firms will be keeping a nervous eye on signs that global growth has peaked. . .

The Taxpayers’ Union says the drop in confidence shows the urgent need for tax reform:

. . .Taxpayers’ Union Economist Joe Ascroft says, “Businesses need more than a working group. They need real changes in policy direction, including tax reform. Business breakfasts with CEOs and Cabinet Ministers simply won’t cut it for the average small business.”

“Company tax rate cuts – accompanied by full capital expensing – would put a rocket under business investment and put an end to the doldrums. If focused at measures to boost productivity, the evidence shows that tax relief would flow through to workers in the form of higher wages.” . .

Tax reform would help and not just for businesses.

The lower dollar helps export returns but increases the cost of imports, including fuel, the price of which is also being boosted by extra taxes:

The Government’s obsession with fuel taxes shows it doesn’t care about the cost of living for ordinary Kiwis, National’s Transport spokesperson Jami-Lee Ross says.

“Now is the time for solutions to the cost of living, not new taxes. National is taking the initiative with a bill lodged today to repeal regional fuel taxes within three months.

“Fuel prices are sitting at record levels across the country and are set to rise further because the Government is proposing three additional rounds of national fuel tax increases totalling an extra 12 cents a litre of fuel in new taxes.

“In addition, there is an 11.5 cents a litre regional fuel tax in place in Auckland that will be rolled to other regions in a few short years. It adds to this Government’s sorry record of driving up costs for households and businesses and choking economic growth. . .

 

But tax is only part of the problem. The Government has several other poor policies that we’re all paying for:

The message from economists is loud and clear: the Government’s bad economic policies mean New Zealanders will be thousands of dollars a year worse off, says National Party Leader Simon Bridges.

“In the last three months alone NZIER has revised down their GDP growth forecasts which means every man, woman and child will be $1600 a year worse off on average by 2022. That is $6400 for a family of four.

“NZIER are clear that the decline in the economic outlook isn’t just sentiment. Profitability has deteriorated and businesses’ own activity, a measure closely correlated with GDP growth, has weakened. There are real implications for businesses, workers and New Zealanders trying to get ahead.

“The reason GDP growth is now faltering is because this Government has imposed a wide range of policies that are bad for growth. They have imposed more taxes, shut off foreign investment, significantly increased labour and compliance costs, banned oil and gas exploration and wasted billions on low-quality spending.

“And what was the Prime Minister’s solution this morning: another working group. The Government needs to understand that lower growth has real consequences for New Zealand families. Working groups do not drive economic growth, good policies and hardworking New Zealanders do.

“So the goal is simple. We must grow the economy if we want New Zealanders to be better off. A growing economy means more jobs, higher incomes and more revenue to pay for the things we need.

“We need to be pro-growth as that is the only way we can improve our standard of living. National wants New Zealanders to keep more of what they earn. Higher taxes, more regulation, compliance costs and a rising cost of living do nothing to help families get ahead.

 

Added costs and uncertainty are a poisoning business confidence and this week’s announcement of a business council is no antidote.


Rural round-up

March 3, 2018

Hauraki Plains dairy farmer elected to oversee the creation of Auckland educational farm:

A respected Hauraki Plains dairy farmer will lead the board overseeing the development of a new educational farm in Auckland.

Julie Pirie has been elected to chair the five-member Donald Pearson Farm Board.

The 74-hectare dairy farm in South Auckland was gifted to NZ Young Farmers by the late Donald Pearson last year. . . 

Slim pickings: Worker shortage leaves apple farms frantic – Anusha Bradley:

Apple growers in Hawke’s Bay are preparing to work around the clock to cope with what’s being described as an extreme shortage of seasonal workers.

Orchardists said they have less have than half the workers they need, and despite a recruitment campaign, are failing to attract the usual hordes of backpackers they rely on.

Hastings-based Bostock is the largest producer of organic apples in the country.

Bostock human resources manager Vikki Garrett said usually they’d hire about a 100 or so backpackers, but had only managed to recruit 10. . . 

Bug’s impact on horticulture devastating, report says:

An economic report, released today, says if the brown marmorated stink bug (BMSB) establishes in New Zealand it would dramatically impact New Zealand’s gross domestic product (GDP) as well as export revenues from horticulture.

Prepared by the New Zealand Institute of Economic Research (NZIER), Quantifying the economic impacts of a Brown Marmorated Stink Bug incursion in New Zealand, shows GDP falling between $1.8 billion and $3.6 billion by 2038, and horticulture export value falling between $2 billion and $4.2 billion by 2038. . . 

Agriculture exporters meet to discuss issues:

Key stakeholders in the agro-export market today gathered to discuss possible solutions to address pertinent issues faced by exporters in the export pathways.

While officially opening the Agriculture Exporters Symposium at the Tanoa Plaza Hotel this morning, Permanent Secretary for Agriculture, Mr. David Kolitagane said the objective of the workshop was to address constraints in the agro-export pathway as the impact of the contribution of agricultural exporters was integral to economic development.

“The rationale for organizing today’s symposium is to address constraints in the export pathway, collate information and make appropriate and . . .

Farmers left in limbo as Mycoplasma Bovis takes hold:

With just one month to go until a decision will be made, farmers will understandably be left confused and anxious about whether the Government is going to eradicate the crippling cattle disease Mycoplasma Bovis, National’s Primary Industries spokesperson Nathan Guy says.

Ministry for Primary Industries (MPI) officials appeared before the Primary Productions Select Committee at Parliament this morning to answer questions about how the Government plans to contain the spread, compensate farmers for their losses and ultimately to eradicate it. . . 

Tractors lead agricultural imports:

Tractor imports have remained at high levels in January 2018, continuing the trend for the last year, Stats NZ said today.

The value of imported tractors rose $27 million (191 percent) in January 2018 from January 2017. For the year ended January 2018, values were up 51 percent compared with the January 2017 year.

“Imports of tractors can be an indicator of confidence in the agriculture industry,” international statistics manager Tehseen Islam said. “The last time we imported this many tractors was in 2014 when dairy prices were at their peak.” . . 

Deborah Marris joins Synlait leadership team:

Synlait will welcome Deborah Marris to the Executive Leadership Team in the role of General Counsel and Head of Commercial on Monday 5 March.

“Deborah’s outstanding legal and commercial background makes her the perfect person to join our team. Our rapid growth requires strong leadership in this area and Deborah has the skills, foresight and international experience to support us well,” says John Penno, Managing Director and CEO.

Ms Marris’ role will encompass legal affairs, risk, corporate governance, insurance and commercial matters, including customer and supplier contractual relationships. . . 

NZ King Salmon sees weaker second half on hot summer; 1st-half profit soars 81% – Jonathan Underhill:

(BusinessDesk) – New Zealand King Salmon says the “extraordinarily hot summer” has cut survival rates at its fish farms in the Marlborough Sounds and it expects weaker second-half earnings after profit in the first half soared 81 percent.

Profit rose to $15.7 million in the six months ended Dec. 31 from $8.7 million a year earlier, the company said in a statement. Sales climbed to $87.7 million from $63.6 million. . . 

Seeka annual profit falls 44% on lower kiwifruit volumes, impaired banana business – Paul McBeth:

(BusinessDesk) – Seeka posted a 44 percent decline in annual profit as Australasia’s biggest kiwifruit grower booked a $2 million charge on its banana sourcing unit while managing a decline in kiwifruit volumes.

Net profit fell to $5.8 million, or 34 cents per share in calendar 2017, from $10.4 million, or 62 cents a year earlier, the Te Puke-based company said in a statement. The year-earlier figure was bolstered by a $3.1 million gain on an insurance payment. Revenue fell 2 percent to $186.8 million. . .

Comvita swings to first-half profit, reiterates full-year guidance – Rebecca Howard:

(BusinessDesk) – Comvita, the mānuka honey company, swung to a first-half profit on strong sales growth and a recovery in the “grey” or informal sales channel into China and reiterated its full-year earnings guidance despite bad weather hitting the 2018 honey season.

The Te Puke-based company reported a net profit of $3.7 million, or 8.31 cents per share, in the six months to Dec. 31 versus a loss of $7.1 million, or 17.18 cents, in the prior period. In January the company said net profit would be more than $3 million. Sales reached $83.6 million versus $57.7 million in the prior year. Earnings before interest, tax, depreciation and amortisation were $9.9 million versus an ebitda loss of $2.8 million in the same period a year earlier. . . 


Free trade 2-way street

October 21, 2017

Free trade is vital to New Zealand, Horticulture NZ Mike Chapman says.

New Zealand is a trading nation. We rely on export earnings from free trade for our financial prosperity. But free trade is a two way street – the countries involved open up their borders to allow free movement of goods and services on an equal basis. This includes property ownership.

The pathway to premium export earnings is through innovation and having a point of difference. Access to the latest techniques and innovations is key to New Zealand remaining competitive and market leaders.

The truth here is that to do that, New Zealand needs strong links with the international science community, companies involved in innovation, market leaders and companies with scale and market penetration. Many of those international companies have operations based in New Zealand. Equally, New Zealand also has operations based in their home countries. That involves property ownership. Here, I’m not talking about residential properties.

The importance of trade was recently highlighted in a report by the New Zealand Institute of Economic Research (NZIER). Here are a couple key points from their analysis:

– Trade accounts for $85 billion (43%) of New Zealand’s GDP.
– Trade gives each household in New Zealand improved product choice worth $3.9 billion, or $2,300 per household.
– A US study estimates that trade contributes about 30% to the average US household’s purchasing power. In New Zealand this would be far higher, given how trade reliant we are compared to the US.
– More free trade agreements will increase New Zealand’s GDP by $18 billion and create 42,000 skilled and 20,000 low skilled jobs.

Freeing up trade and keeping trade free are vital for New Zealand’s continued prosperity.

Tightening up on any aspect of our free trade may have a ripple effect. As a country, we do not want to slip into economic decline. So Horticulture New Zealand’s plea to New Zealand’s new government is to keep the previous Government’s free trade agenda running. Foreign investment in New Zealand enhances our economic prosperity.

We need to keep the door open for three key reasons:

– New Zealand’s prosperity depends on free trade – we can’t compete if, due to tariffs and other barriers, our goods and services are more expensive than those from other countries. Simply put, our goods and services will not be purchased.
– Many overseas companies that have invested in New Zealand enhance our ability to be market leaders and innovate, provide many jobs, and contribute to our economic prosperity and ability to buy goods from around the world.
– New Zealand’s companies need to invest in overseas countries to enhance our ability to compete for premium prices and keep ahead of innovations – it is a two way street.

We can’t win the fight to open doors for our goods and services if we close our own.

Successive Labour and National governments have agreed on the importance of free trade and worked to advance it.

We’ll all lose if the new government attempts to return to the bad old days of fortress New Zealand.


Rural round-up

August 9, 2017

100-plus rivers and lakes to be improved:

Freshwater improvement projects covering over 100 rivers and lakes across New Zealand are to receive grants of $44 million from the Government, Environment Minister Nick Smith announced today.

“The Government has an ambitious plan to improve water quality in our rivers and lakes that involves stronger direction to councils, tighter regulation and funding to support projects. Today we are announcing grants of $44m for 33 projects which, with Council and other contributions, will see $142m invested in over 100 lakes and rivers.” . . 

Partnership approach on freshwater quality hailed:

A partnership approach to dealing with river and lake water quality offers the best prospect of making sustained progress on problems that were often decades in the making, Federated Farmers says.

The Federation’s water spokesperson Chris Allen hailed the announcement today of an initial $44m in grants from the $100m Freshwater Improvement Fund, particularly as it will leverage a further $98 million of investment by councils, farmers, other land-owners and agencies.

In total, 33 projects covering more than 100 lakes and rivers have won funding, including at Lakes Tarawera, Horowhenua and Wanaka and involving the Manawatu, Wairoa, Waimea and Selwyn Rivers. . . 

Horticulture welcomes funding for water protection project:

Government funding for a nationwide project to better protect waterways, by measuring and managing nitrogen on cropping farms, has been welcomed by Horticulture New Zealand.

Today Environment Minister Dr Nick Smith announced funding of $485,168 from the Freshwater Improvement Fund for a three-year project: Protecting our Groundwater – Measuring and Managing Diffuse Nutrient losses from Cropping Systems. . . 

True value of Coromandel seafood industry realised in report released today:

Moana NZ’s oyster processing plant based just out of Coromandel Town

Coromandel mussel and oyster farmers, along with industry, iwi, businesses and agencies came together today to celebrate the findings of a report which demonstrates the real economic and social value of aquaculture to the Thames-Coromandel and surrounding regions.

Some of the key findings from “The Economic Contribution of Marine Farming in the Thames-Coromandel District,” written by the New Zealand Institute of Economic Research (NZIER) include: . . 

NZ beef export market faces headwinds, AgriHQ says – Tina Morrison:

(BusinessDesk) – Headwinds are building for New Zealand exports of beef, the country’s largest meat export, according to AgriHQ.

The outlook for beef prices is weakening in the US, the largest market for New Zealand beef, after a United States Department of Agriculture report showed cattle numbers at a nine-year high as farmers rebuild their herds following heavy culling in 2014 and 2015, with most of the increase in beef cows rather than dairy cows. Elsewhere, Japan has temporarily lifted the tariff on frozen beef from New Zealand, rival exporter Australia has increased supplies, and a rise in the New Zealand dollar  . . 

CropLogic’s ASX float underwritten by Australian corporate adviser Hunter Capital  – Paul McBeth:

(BusinessDesk) – CropLogic, the agricultural technology company which counts Powerhouse Ventures as a shareholder, will have its initial public offering underwritten to ensure it crosses the A$5 million threshold.

Sydney-based Hunter Capital Advisors has been acting as a corporate adviser to CropLogic and has committed to ensuring its public listing succeeds, acting as an underwriter for the offer, CropLogic said in a statement yesterday. Christchurch-based CropLogic is offering 40 million shares at 20 Australian cents apiece to raise as much as A$8 million and listing on the ASX. Those funds will pay for market development, research and development, working capital, and to cover the cost of listing, which is a certainty with the underwrite. . . 

The great food disruption: part 3 – Rosie Bosworth:

Milk without the cow, meatless burgers that bleed, chicken and shrimp made from plant matter, and now foie gras without a force-fed goose in sight. A new food revolution enabled by science and biotech is brewing and, if it succeeds, animals will have little to do with the future of food. For some, that future looks rosy, but, as Dr. Rosie Bosworth writes in part three of a series, the implications for New Zealand’s agricultural sector could be less than palatable.

For all its promise, synbio and lab-made food need to overcome a number of challenges and not everyone is convinced it will be the solution to the problems of conventional animal agriculture. This gives New Zealand at least a small window of respite while it assesses a potential road ahead without the farm.

4,500 Years of Crop Protection: – Mark Ross:

Like all agricultural innovations, crop protection products have evolved tremendously since their inception. From natural chemical elements, to plant and metal-based insecticides, to synthetic products, formulations have drastically changed for the better. Today’s products are more sustainable, targeted, efficient and environmentally-friendly than their predecessors.

The first recorded use of an insecticide was about 4,500 years ago by the Sumarians, who used sulphur compounds to control insects and mites attacking their food sources. In the first century B.C., Romans made a compound from crushed olives, burnt sulphur and salt to control ants and weeds in their crops. In 800 A.D., the Chinese used arsenic mixed with water to control insects in their field crops and citrus orchards. Other pesticides, derived from natural sources such as pyrethrum from dried Chrysanthemum flowers and nicotine extract from tobacco plants, evolved over time. . . 

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Farmers do cry over spilt milk.


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.


Rural round-up

February 24, 2017

Isn’t agriculture really just at war with liberals? – Uptown Farms (Kate Lambert):

Last week after a speech, a young college student approached me. Eager to connect, she started with, “Do you ever get completely frustrated with these liberals?”

Her question was intriguing to me. Not because it was unique, the exact opposite. Because it was so common.

Almost without fail, when I get the chance to talk to producers about the desperate need to tell the story of agriculture, someone asks a similar, politically loaded question.

But it’s a fair question, isn’t it? In this politically correct era, surely a blogger can still call a spade a spade?

Because isn’t the reality that our enemies are easily identifiable? Isn’t agriculture really just at war with liberals? . . .

WTO agreement a victory for NZ exporters:

Trade Minister Todd McClay has welcomed the entry into force of the WTO Trade Facilitation Agreement (TFA) saying it is a big win for New Zealand exporters.

“The TFA will benefit all New Zealand exporters and is particularly good for small and medium sized enterprises. The TFA reduces the cost, administration and time burden associated with getting products across borders and into the marketplace,” Mr McClay says.

“New Zealand’s agricultural exporters will also benefit significantly from a provision to hasten the release of perishable goods within the shortest possible time.”

A rising tide of protectionism could hit NZ dairy sector hard: NZIER –  Rebecca Howard:

(BusinessDesk) – New Zealand’s economy would be hard hit if there is a retreat to protectionism in the global dairy sector, a report from the New Zealand Institute of Economic Research has found.

“In the current global trading system, the tide of protectionism is rising. Brexit and the initial trade policy proclamations by Donald Trump both point to a challenging environment for further trade liberalisation, at least in the short term,” said NZIER in the report for the Dairy Companies Association of New Zealand. Against this backdrop there is an increasing risk that tariffs could be lifted rather than reduced, it added. . . 

Bobby calf death rate halved over a year – but still room for improvement – Gerald Piddock:

Bobby calf deaths more than halved after a big improvement in their transportation welfare last spring.

A new report from the Ministry for Primary Industries showed the mortality rate went from 0.25 per cent in 2015 to 0.12 per cent last year.

Last year 2255 calves were reported dead or condemned during the time they were collected for transport to their slaughter from 1,935,054 calves processed.

Young NZers chase endless shearing season – Alexa Cook:

The declining number of sheep in New Zealand and changes in weather patterns are driving more shearers to chase work around the globe.

The national sheep flock is now about 27 million, a big drop from the 70m or so sheep that the country had in 1982.

Jacob Moore from Marton is part of a group of about 60 young shearers who follow the summer seasons for work.

Mr Moore said for shearers who were at the top of their game and established locally, there was full-time work and contractors tended to hold on to them for many seasons.

Wool market strengthens:

NZ Wool Services CEO John Dawson reports 4600 bales on offer this week saw an 87 percent clearance with mostly positive results, with lambs wool increasing considerably.

The weighted currency indicator is down 0.34 percent having a small but positive impact.

More growers are continuing to hold back wool, further reducing volume which is restricting supply in some categories.

Mr Dawson advises compared to the last South Island selection on 16 February; . . 

A2 CEO, chair sell down holdings following strong first-half earnings – Sophie Boot:

(BusinessDesk) – A2 Milk Co’s chief executive and chair have sold down their stakes in the milk marketing firm, less than a week after reporting first-half profit more than tripled as demand for its A2 Platinum infant formula surged in its key Australia, New Zealand and China businesses.

Chair David Hearn sold 1 million shares for about $2.5 million, or $2.48 a share, on Friday, while chief executive Geoffrey Babidge sold 900,000 shares for $2.2 million, or an average price of $2.49, yesterday. Hearn gained the shares by exercising 1 million of his 5 million options, for which he paid $630,000, with the sale to facilitate a property transaction in the UK to move his personal residence, according to documents published to the NZX. . . 

Maize crops ‘worst in 30 years’ – Alexa Cook:

Farmers in drought-hit Northland battling with a shortage of stock feed are also experiencing the worst maize harvest in 30 years. . 

Northland Regional Council is warning farmers to be careful with feed reserves and not get too excited about the recent rain.

The council said the drought meant some farmers had already used up their extra supplementary feed, which was being saved for the autumn and winter months.

Northland dairy farmer Even Sneath said it had been a terrible season for growing crops. . . 

Busy summer for MPI biosecurity staff:

Faced with record numbers of international visitors this summer, Ministry for Primary Industries biosecurity staff have intercepted risk goods ranging from the bizarre to the potentially devastating for New Zealand’s economy and environment.

Some of the unusual airport interceptions so far this summer include:

• A chilly bin of live spanner crabs from Thailand presented to officers at Wellington Airport.

• Fruit fly larvae in mangos found at Auckland Airport inside a suitcase from Malaysia jammed full of plant produce and other food. . . 

New Zealanders Offered Sweet Investment:

New Zealanders are being invited to invest money for honey in a revolutionary hive sharing initiative launching today.

Whanganui-based Canaan Honey has launched a PledgeMe crowdsourcing campaign for investors looking to get a sweet return: a lifetime supply of honey.

A launch party last night saw the season’s first harvest of honey with a 3kg bonus honey offered to the first 10 signups.

Hive Share lets backers around New Zealand become beehive owners, without the fuss of having to look after the hive. . . 


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