End of Ag subsidies in sight

19/01/2016

The 10th World Trade Organisation Ministerial Conference concluded with an agreement of eliminate agricultural subsidies.

. . . Hailed by WTO Director General Roberto Azevêdo as “the most significant outcome on agriculture” in the history of the WTO, this decision includes a commitment to eliminate subsidies for farm exports.1 Developed countries have made a direct commitment to eliminate export subsidies immediately, with the exception of a few agricultural products; subsidies on some of the most sensitive products, such as processed foods, dairy products, and meat, must be phased out by 2020. Developing countries have been granted until 2023 to remove their subsidies, with Least Developed Countries (LDCs) and net food-importing countries having until 2030 to meet their commitments.

The decision to end agricultural export subsidies is widely supported by research from institutions such as IFPRI’s Markets, Trade and Institutions Division, which contributed several reports to this year’s discussions with the WTO Secretariat and a number of WTO member countries. In a recentFSP blog post based on a forthcoming IFPRI Working Paper, IFPRI researchers David Laborde and Eugenio Diaz-Bonilla explained the potential impacts of the full use of existing export subsidy allowances. During recent years of high global agricultural prices, export subsidies were not needed by countries to sell on the global market; thus, the subsidy levels allowed by the WTO were higher than the level of subsidies actually being used. As prices have started to fall, however, this unused portion of allowable subsidies (sometimes called “the water”) could come into play. Using a CGE model, the authors find that if global agricultural prices continue to fall, the unused portion of export subsidies allowed by the WTO could reach US$11 billion. The full use of this amount, the authors estimated, could displace agricultural production in middle- and low-income countries by about US$12 billion, negatively impacting poverty reduction and food security throughout developing regions. The decision in Nairobi to eliminate agricultural export subsidies represents an important step in the right direction to protect poor populations from these harmful effects. . . 

Subsidies benefit a relatively few, generally inefficient producers at the cost of more efficient producers, consumers and taxpayers.

They reduce choice and increase costs.

They also divorce producers from market signals.

When the milk price dropped, New Zealand farmers cut back production but farmers in countries with subsidies didn’t, adding to the problem of supply outstripping demand.

Losing subsidies can cause short-term pain as New Zealand farmers found in the 1980s when we were dragged into the real world, but the medium to long term gains are worth it.

That we’ve already faced up to market realities is one of the reasons we have more to gain from the Trans Pacific Partnership Agreement (TPPA) than the USA:

New Zealand stands to reap considerably greater benefits from the Trans-Pacific Partnership trade and investment agreement (TPP) than the United States, says a new study of the controversial pact by economists at the World Bank.

However, the biggest long term benefits are likely to be in emerging economies like Vietnam and Malaysia, where a combination of manufacturers shifting production to their more competitive economies and structural economic reforms are expected to deliver more than in countries where many of those transitions have already largely occurred. . . 

The World Bank study estimates an increase in economic output for New Zealand by 2030 from TPP of around 3 percent, compared to less than 1 percent for the US and Australia.

New Zealand would be the fourth largest gainer behind Malaysia, Vietnam and Brunei, roughly equal with gains estimated for Singapore.

New Zealand could expect small increases of around 2 percent in output growth, with slightly greater gains in unskilled than skilled labour-intensive industries. . . 

Those opposing the TPPA are fighting against an agreement that will help developing countries and provide greater gains for unskilled workers here.

At least some of the opponents are ideologically opposed to free trade per se. They also ignore the costs of being outside this large and influential trade tent:

. . . Claims that New Zealand has given up sovereignty appear misinformed at best, highly politically-motivated at worst. 

The TPPA sets the rules for more than a third of the world’s trade. More than that, it will play a large role in defining the world we live in should it be voted through by each of the 12 member states.

And for New Zealand’s part in pushing the deal through, it seems likely we’ll take the auspicious role of hosting the document’s signing by all 12 member nations, next month.

But it seems prudent to ask – of those who have done the economic modelling – what would New Zealand look like if it was left behind? 

The World Bank Report is here.


Rural round-up

21/01/2015

Action needed now to minimise drought losses:

Farmers need to act now if they are to cope with the effects of a predicted drought in Canterbury, Lincoln University experts say.

But they also need to be thinking long-term with more dry-spells looking likely.

Chris Logan, Animal Programmes Manager at Lincoln University, says it seems the region may be in for a hard drought of a kind which has not been seen for some decades. . . .

 HSBC says global dairy prices should recover:

HSBC’s economists are expecting global dairy prices will start recovering from current lows, largely because of a sharp run-down in Chinese dairy imports.

Paul Bloxham, HSBC’s chief economist in Sydney, said Chinese imports had dropped to seemingly unsustainably low levels.

He said once China begins buying again, prices should at least partly rebound.

Global Perspective Will Help NZ Agribusiness Grow:

An agribusiness symposium with a global focus will help New Zealand businesses continue to develop their production, marketing and logistics skills to grow sales and exports.

That’s the view of agribusiness consultancy, AbacusBio that is underwriting the second Queenstown Agribusiness Symposium in March 2015.

AbacusBio partner, Anna Campbell says after attending the Harvard Agribusiness Executive Seminar in China a few years ago, the company was inspired to organise a comparable event locally so more New Zealand businesses could benefit from the learnings and networking.

The three–day program is facilitated by the Director of Harvard Business School’s Agribusiness Program, Mary Shelman and Professor of Marketing and Associate Dean at UCD Michael Smurfit Graduate Business School, Ireland, Prof. Damien P. McLoughlin, who bring an international perspective, she says. . .

ANZ announces assistance package for farmers affected by Big Dry:

ANZ today announced an assistance package for farmers affected by extreme dry conditions across much of New Zealand’s east coast.

Many areas, including Canterbury, have experienced “severely dry” conditions over the past two months compared with the long-term average, according to Niwa.

“The Big Dry is affecting areas which haven’t experienced extreme conditions like these for many years, so for a lot of farmers this is new territory,” said Graham Turley, ANZ Bank’s Managing Director Commercial & Agri. . .

 

David Jones explains why the red meat sector growth targets are not likely without major reform, and what should be done in 2015 with a sector ‘unable to help itself:

Currently, over 80% of our agricultural produce is shipped offshore each and every year, and over the next decade the sector has big ambitions to double export earnings to $64 billion.

The Red Meat Sector Strategy (RMSS), launched by the Meat Industry Association of New Zealand in May 2011, hopes to achieve growth in the sector of $3.4 billion NZD by 2025, across all parts of the value chain.

The three key influences focused under RMSS are:

• Improving how and what we sell in overseas markets

• Aligning procurement between farmers and processors .

• Adopting best practice production and processing . . .

Economists to discuss challenges of feeding a growing planet . . .

A world perspective on the short and long run impacts of food price changes on poverty will be up for discussion at a major international economics conference in Rotorua next month.

The World Bank’s, Dr Will Martin, will lead the discussion on food price changes and poverty as part of a session on challenges in the agrifoods sector at the 59th Australian Agricultural and Resource Economics Society’s (AARES) annual conference being held in Rotorua from February 10 to 13.

Dr Martin is manager for agricultural and rural development in the World Bank’s Research Group and president-elect of the International Association of Agricultural Economists. His recent research has focused primarily on the impacts of changes in food and trade policies and food prices on poverty and food security in developing countries. His research has also examined the impact of major trade policy reforms-including the Uruguay Round; the Doha Development Agenda; and China’s accession to the World Trade Organisation. . .

 Farmers urged to watch for yellow bristle grass:

 Horizons Regional Council is urging farmers to keep an eye out for yellow bristle grass, an invasive summer weed that spreads rapidly through pasture causing a loss in production.

 Horizons environmental programme coordinator plant security Craig Davey says the grass is already affecting farming in Waikato and is easily transferred from roadside infestations, via stock movement and infested hay.

“Like a lot of weeds, yellow bristle grass is quick to colonise bare ground. Hot, dry conditions, poor machinery hygiene practices and spraying to bare earth can all exacerbate its spread,” Davey says. . .


Rural round-up

13/05/2013

Chinese bounty comes with warning – Nigel Stirling:

China has overtaken Britain as the biggest market by value for New Zealand’s sheep meat industry.

But the historic moment has been overshadowed by fresh food scandals in the country and has prompted senior meat industry figures to question NZ’s increasing reliance on the Chinese market.

New figures from the Meat Industry Association show $204 million of sheep meat was exported from NZ to China in the first three months of this year.

That exceeded the $198m exported to Britain. It was the first time NZ’s traditional number one market had been trumped by China or any other country in a three-month period. . .

World Bank, IFAB pledge $1.9bn to boost agriculture in Nigeria:

The World Bank has said that it would commit one billion dollars to support Nigeria’s agricultural sector in the next five years. Ms Marie-Francoise Marie- Nelly, its Country Director, said this at a workshop on Gender and Agriculture Technical Dialogue in Abuja.

Also the International Fund for Agricultural Development (IFAD) said that it would support the Federal Government’s Agricultural Transformation Agenda (ATA) with new programmes that would cost $88.5 million. President of IFAD, Dr Kanayo Nwanze, said this in Abuja when he led a delegation on a visit to Dr Akinwumi Adesina, the Minister of Agriculture and Rural Development. . .

 Taking aim at NZ beef Goliaths – Tim Fulton:

Red Oak Angus owner Ric Orr has added heat to the bull sale season by putting up an alternative to the “massive engine” of estimated breeding values (EBVs).

The North Canterbury breeder and finisher has enlisted top livestock evaluator Ken Moore, who is resigned to his initial findings being shot down in flames by supporters of the Australian-designed Breedplan.

Orr accepts his views will rub roughly against some farming titans, including the leadership of the New Zealand Angus Association.

Moore, meanwhile, describes his work for Orr so far as a “quick and dirty” response to breeders who are unimpressed, or just plain bamboozled, by the results they get from the widely used Breedplan system. . .

Angry farmers walk out of aid meeting with Minister – Debbie James:

Welsh farmers whose businesses have been jeopardised by the freak March blizzards walked out of a heated meeting with Wales’ farm minister after demanding his resignation.

Alun Davies faced hundreds of angry farmers at a meeting in north Wales, one of the regions worst hit by snow and strong winds.

Many of the farmers are struggling financially after thousands of their sheep and cattle were buried in snow but the Welsh government has remained steadfast in its refusal to directly compensate them for their losses. . .

Forget the pub test, apply the farm test, farmers tell Coalition :

The National Farmers’ Federation (NFF) has welcomed a move towards greater flexibility in workplace arrangements under the Coalition’s industrial relations policy, but says it does not go far enough on support for small businesses, including farms.

NFF President Duncan Fraser said it was good to see the Coalition releasing its policy well ahead of the election, but farmers would like to see greater detail and a commitment to action prior to 2016.

“People are agriculture’s most important resource – both on and off the farm. As a sector, we have identified that we need to build our workforce, develop our skills and expertise, and allow for greater flexibility to compete with the high wages offered by other sectors,” Mr Fraser said. . .

Reduced EU demand for lamb – Patsy Hunter:

UK sheep prices may be on the up in the UK due to reduced supplies, but it appears the opposite holds true on the Continent, where the economic problems being experienced by many countries in southern Europe are having a significant effect on the trading patterns of sheep and sheep meat.

With reduced demand for lamb and sheep meat in the Mediterranean, due to the poor economic climate, sheep meat imports in these countries fell considerably in 2012.

At the same time exports generally rose as the domestic market could not absorb home production levels. This occurred despite sheep meat production falling in these countries, meaning there was less for the home market to take in the first place.

In Spain, domestic sheep meat production fell 6% year on year in 2012, having totalled 122,800 tonnes. . .

Who deserves this support? – Gordon Davidson:

IF THE Scottish Government is wondering how best to spend the £6million it has found for emergency weather aid, Jim Simmons, of the New Entrants Group, has an easy answer – give it to the 1200 Scottish farmers currently farming without an SFP cash cushion.

Mr Simmons this week rounded on the ‘established farmers’ claim that the weather had left them ‘facing the biggest crisis since foot and mouth’, saying that their winter problems did not match those of the unsupported.

“Have these farmers not received their historically-based payments annually over the last eight years, the most recent being last December?” asked Mr Simmons.

“Are they not due another lump sum in six or seven months time? If these farmers are in this ‘crisis’, then what is the state of the genuine new entrant business in Scotland who has started in the last 10 years and has had little or no SFP payment up to now? . .


Food security differs from food security

03/10/2012

Is New Zealand concentrating on food safety when there’s more to be gained by concentrating on food security?

 “I was stunned to learn what we know as Food Security is defined by the World Bank as Food Safety.  It may sound like semantics but it carries a huge implication for our agricultural producers and exporters,” says Letitia Isa, a student of Massey University Executive MBA programme.

“This simple but fundamental misapprehension may see New Zealand jumping ever higher but illusionary hurdles.  Instead of higher standards boosting returns, they may in fact be eroding them for almost no financial gain.

“When the World Bank says Food Safety they are not talking stainless steel, the National Animal Identification and Tracing Scheme or the Emissions Trading Scheme.  What the World Bank means is how New Zealand can contribute to the feeding nine billion people by 2050.

“That carries with it a powerful but different policy message.

New Zealand has a well deserved reputation for food safety but the premise that we are jumping unnecessary hurdles isn’t new.

Ever-stricter requirements for food safety have been used as non-tariff barriers for years.

When my farmer was in London in 1982 he visited the Smithfield market and was appalled by the low standard of hygiene there when the EU was requiring such high standards in our freezing works which provided a lot of the meat.

“New Zealand can feed some 24 million people according to the University of Waikato’s Professor of Agribusiness, Jacqueline Rowarth.  The United Nation’s Food and Agriculture Organisation says developed countries need to increase output by 70 percent to do their bit.

“It might sound provocative, but we need to seriously weigh the cost-benefits of adopting polices that do not generate tangible revenue at the farm gate, or increase production. While European supermarkets seem to be a de facto political and policy benchmark, are ever higher compliance costs worth it?

“It may sound counter intuitive, but perhaps quantity does have a quality all of its own.   A simple metric maybe if a policy adds a dollar of cost, does it produce well over a dollar of added revenue at the farm gate?

“Moreover, are our other policy settings, particularly around Genetically Modified Organisms, retarding New Zealand’s ability to do its fair global share?

“Certainly, the way the World Bank defines Food Safety needs to become central to New Zealand policy formation.  If not, we risk unprecedented global disorder that New Zealand could not escape,” Ms Isa concluded.

It would be stupid to jeopardise our reputation for food safety, especially in the higher-paying markets which are more likely to be concerned about quality than quantity.

However, if we can also increase the quantity of food we produce and still ensure it is safe to eat without the unnecessarily high hurdles some markets require we might be able to do our bit to help the world’s hungry while simplifying compliance, reducing the costs of production and increasing returns.


RSE works for workers, employers and as aid

22/12/2010

The Recognised Seasonal Employer scheme is working well.

Reports from the World Bank and Department of Labour confirm multiple benefits.

The scheme permits horticulturists and viticulturists to employ workers from Pacific Islands  and a few parts of Asia, during the harvest.

This solves the problem of worker shortages for employers and gives work to people from poor countries to the benefit of both.

The World Bank report shows this is having a positive development role for the Pacific. Workers earn far more than they could at home and take most of their earnings back to save or use to pay for their children’s education or for consumer goods.

It concludes:

Recognised Seasonal Employer programme has indeed had largely positive development impacts. It has increased income and consumption of households, allowed households to purchase more durable goods, increased the subjective standard of living, and had additional benefits at the community level. It also increased child schooling in Tonga.

This should rank it among the most effective development policies evaluated to date. The policy was designed as a best practice example based on lessons elsewhere, and now should serve as a model for other countries to follow.

The DoL report found workers from Kiribati and Tuvalu got little if any benefit, although this was partly explained by the small number of workers from there.

But workers from Vanuatu, Tonga and Samoa benefited financially from the RSE policy.

The most frequent uses of savings by workers were to pay school fees and buy school uniforms; renovate or build new homes; purchase land and cattle; support other relatives; pay for family events; purchase vehicles, boats, equipment, and electronic goods; and repay bank and other loans.

Some workers used their savings to start or expand business ventures and other activities to generate income (for example, cattle farming, a taxi business, a store, and a vehicle-hire business).  

While financial rewards were the most important benefit, workers also valued their newly acquired skills, especially time management skills, English language skills, and an improved work ethic. Some workers discussed how the skills they had learnt in the vineyard or orchard could be transferred to their farms at home or to business ventures they were considering. Return workers said they were better at managing and saving their money.

Not all workers were in New Zealand long enough to enable them to save sufficient after paying their airfares and living costs. There are also problems from the prolonged absence of parents and spouses.

The majority of RSE employers reported immediate benefits from the scheme including a reliable, enthusiastic and productive workforce, reduced recruitment and training costs, increased confidence to expand and invest, and reduced stress.

Employers identified factors that contributed to the productivity levels of RSE workers: Pacific workers coped well with the physically demanding manual work involved in harvesting crops in very hot, cold, or windy conditions; and were  more willing to work long hours, weekends, and night shifts than New Zealand workers.

A consistent theme that emerged from employer interviews was the improved quality of produce due to having skilled workers to pick and pack crops while they were in optimum condition. Other results were improvements to the supply chain as a result of a reliable workforce, and improved performance of New Zealand workers due to the demonstration effects of RSE workers.

The report concludes the policy has achieved what it set out to do.

Employers in the horticulture and viticulture industries have access to a reliable and stable seasonal workforce. The labour supply crises of previous years have been avoided and employers can now plan and manage their businesses with confidence.

As the policy enters its third year, there are indications many employers are now also benefiting from skilled labour as workers return for subsequent seasons. Significant productivity gains were reported in the second season, together with improvements in harvest quality.

Alongside the employer ‘wins’, Pacific workers and three Pacific states have benefited financially from participating in the RSE Policy. Skill development has also been identified as a positive outcome for workers.

Aid usually means taking money or skills to other countries. The RSE scheme allows people from the Pacific to come here where they help our horticulturists and viticulturists and in doing so help themselves.


NZ 3rd in doing business survey – govt keen to do better

06/11/2010

New Zealand has kept its third place in the World Bank’s doing business survey.

The overall ranking came from nine categories. We were first for starting a business and protecting investors, second for getting credit, third for registering property, ninth for enforcing contracts but only 16th for closing a business, 26th for paying taxes and 28th for trading across borders.

The overall ranking makes New Zealand one of the best countries in which to do business but a media release from Finance Miisiter Bill English and Minister for Regulatory Reform Rodney Hide says the government is keen to do better.

“This report confirms our reputation as a quality investment and business destination, and a country that promotes business confidence,” Mr English says.

“Across most of the nine indicators New Zealand compares very well internationally, which reflects the quality of our regulatory frameworks and the Government’s economic policies.

“However we believe there is still room for improvement. That is why we are continuing reviews of major regulation, which are aimed at cutting red tape and creating an environment where business can thrive,” Mr English says.

Mr Hide said the World Bank report highlighted the fact that onerous or poor regulation deterred investment and stifled growth.

“This Government is committed to increasing productivity by removing superfluous regulation that grew unchecked though much of the past decade,” Mr Hide says.

“Creating better regulatory conditions lifts business confidence, which in turn flows through to investment and jobs.

“Having a simple and transparent regulatory environment also helps attract international investment and we need to ensure New Zealand remains globally competitive,” Mr Hide says.

If Mr Hide put on his other hat as Minister for Local Government he would find plenty of scope for reform.

Regional, city and district councils have a plethora of regulations and red tape which appear to be designed to make doing business harder with no apparent benefit for anyone but the bureaucrats who make and enforce the rules.

Just one example: a couple set up a homestay in the country and sought permission to put up a sign. This was granted but only if it was erected at or a short distance from their gate.

The gate was immediately after a sharpish corner. The applicants pointed out that putting the sign a few metres further from  he gate, still on their property, would mean drivers would see it before they got to the corner rather than while rounding it which would be safer.

The council official agreed with their reasoning but said the rules didn’t allow for signs that far from the gate.

Owen McShane has more examples:

Farmers and all those other “cultural industrialists” are being bombarded with extra costs from all directions. Dairy farmers may well be our most successful export industry but tall poppies present a more attractive target for the ticket clippers. 

Most of these costs are generated by territorial local authorities, often in response to panic campaigns from ecological ideologues, underpinned by junk science. 

Regional Council farm inspectors – with no training, but carrying long books of rules – have directed a farmer to concrete line his silage pits, at a cost of about $70,000, even though there is no evidence that the pits are causing a problem. 

Farmers are fined thousands of dollars for machine failures that discharge some effluent to ground, even when the courts agree there has been no damage to the environment. 

When a winemaker friend started winemaking 10 years ago he needed a single licence, costing $150 a year to make and sell his wine.

By 2009 he needed a raft of licences, costing thousands of dollars, many of which require him to attend courses, such as how to deal with violent drunks. He has never had an issue with drunks in 20 years. 

He now needs a Food Safety Plan, a Hazard Analysis and Critical Control Point Plan, and a stream of ever-changing resource consents. All of these require auditing and monitoring.

He finally quit the industry.

What is most worrying is that because these costs are imposed and incurred literally at “the grass-roots,” central government seems to be largely unaware of their scope, their range and their fiscal impact. . .

The previous government gave local bodies more powers, at least some of which have resulted in more red tape and higher costs for businesses and individuals.

This needs to be addressed if we’re to maintain or improve our ranking for ease of doing business.

Our ranking for doing business was matched by a third place in the United Nation’s Human Development Report.

That looks at social factors including health, education and living standards.


December 27 in history

27/12/2009

On December 27:

537  The Hagia Sophia was completed.

Hagia Sophia

1571 Johannes Kepler, German astronomer, was born.

1773  George Cayley, English scientist, inventor, and politician, was born.

1822 Louis Pasteur, French scientist, was born.

1831 Charles Darwin embarked on his journey aboard the HMS Beagle.

Charles Darwin
Three quarter length studio photo showing Darwin's characteristic large forehead and bushy eyebrows with deep set eyes, pug nose and mouth set in a determined look. He is bald on top, with dark hair and long side whiskers but no beard or moustache. His jacket is dark, with very wide lapels, and his trousers are a light check pattern. His shirt has an upright wing collar, and his cravat is tucked into his waistcoat which is a light fine checked=

 1836 The worst ever avalanche in England occured at Lewes, Sussex, killing 8 people.

1845  Ether anesthetic was used for childbirth for the first time by Dr. Crawford Williamson Long in Jefferson, Georgia.


 

1901 Marlene Dietrich, German actress and singer, was born.

1915 William Masters, American gynecologist, was born.

1918 The Great Poland Uprising against the Germans began.

 Soldiers of the Greater Polish Army

1922  Japanese aircraft carrier Hōshō became the first purpose built aircraft carrier to be commissioned in the world.

Japanese aircraft carrier Hōshō

1932  Radio City Music Hall opened in New York City.

Radio City Music Hall Factbook.jpgFront facade of the Radio City Music Hall

1941 Michael Pinder, British musician (Moody Blues), was born.

1943 Joan Manuel Serrat, Spanish musician, was born.

1945  The World Bank was created with the signing of an agreement by 28 nations.

1948 Gérard Depardieu, French actor, was born.

1949 Indonesian National Revolution: The Netherlands officially recognised Indonesian independence.

1968 Apollo Program: Apollo 8 splashed down in the Pacific Ocean, ending the first orbital manned mission to the Moon.

1951 Ernesto Zedillo, President of Mexico, was born.

1955 Brad Murphey, Australian racing driver, was born.

1978 Spain became a democracy after 40 years of dictatorship.

1979  Soviet Union invaded Afghanistan.

1987 Rewi Alley, friend of China, died of heart failure and cerebral thrombosis at his Beijing residence.

 2001  The People’s Republic of China was granted permanent normal trade relations with the United States.

2004 Radiation from an explosion on the magnetar SGR 1806-20 reached Earth – the brightest extrasolar event known to have been witnessed on the planet.

SGR 1806-20 108685main SRB1806 20rev2.jpg This is where SGR 1806-20 would appear in the sky if it were visible to human eyes.

  • 2007 – Former Pakistani Prime Minister Benazir Bhutto was assassinated by a suicide bomber.
  • Sourced from NZ History Online & Wikipedia.


    Food crisis might bring free trade

    04/06/2008

    The growing world shortage of food might achieve what years of diplomacy and lobbying haven’t: a reduction in, perhaps even the elimination of, tariffs on food.

     

    UN Secretary General Ban Ki-moon has called for an immediate suspension or elimination of price controls and other trade restrictions in an effort to bring down soaring world food prices.

     

    Adam Smith  links to a Financial Times article by World Bank head Robert Zoellick who makes a similar call. His 10 point plan includes a need to boost agricultural supply and research spending; increase investment in agribusiness; and remove subsidies and tariffs on food and bio fuels.

     

    New Zealand farmers were dragged into the real world when Roger Douglas removed subsidies on farm produce in 1984. We didn’t like it at the time but that was partly because tariffs remained on imports and the labour market was highly regulated so costs stayed up while prices dropped; and we were also battling high interest rates, high inflation, a high dollar and drought.

     

    However, while a few farmers were forced to sell most hung in and eventually adapted to the new order and are more secure because of it. Those downstream weren’t so fortunate. Thousands of jobs were lost on farms, in stock firms, shearing gangs, freezing works, and other businesses which serviced or supplied us or processed what we grew. The lesson from this was clear: the subsidies hadn’t helped producers or consumers, it had just feather-bedded those who take their cut between the farm gate and the kitchen table.

      

    A good season for cropping and dairy farmers makes it easy for them to spurn calls for a return to subsidies but even though they’ve had a horror season I’ve yet to hear a single sheep or beef farmer wanting to go back to the bad old days of when politicians controlled our income. 

    Many of our trading partners have yet to understand the harm that subsidies do and New Zealand farmers, processors and the wider economy pay the price for that. This lesson is lost on some in New Zealand including the Greens and NZ First; and as David Farrar  points out it is ironic that free trade advocates are with the UN and Oxfam on this issues while the Greens are siding with the US in supporting tariffs and biofuels.


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