$8m govt “co-investment” puts meat traders on the gravy train – does this mean we stop beefing about farm subsidies?
This country likes to boast of having the lowest level of agricultural subsidies in the OECD – less than one percent of producers’ income. Our agriculture is a highly-productive, market-oriented sector, with minimal government intervention, we bray. Tariffs on agricultural products are among the lowest worldwide.
There would have been no surprise, therefore, that when the world’s trade ministers headed to a WTO meeting in Abu Dhabi earlier this year, the Dairy Companies Association of New Zealand was calling for an immediate capping of agricultural subsidies and urgency in reducing them to prevent and correct production and trade distortion.
DCANZ executive director Kimberly Crewther said New Zealand Trade Minister Todd McClay must make sure this message was loud and clear,
She referenced recent modelling which confirmed how seriously subsidies distorted trade, investment and where products were produced.
Of particular concern was the upwards trend for agricultural subsidies and payments among OECD member countries which already had spent over $800 billion every year.
Beef and Lamb New Zealand seemed to agree.
In October 2023, B+LNZ’s CEO Sam McIvor and UK/EU Regional Manager Alex Gowen visited the WTO as part of a wider trip to Europe. The purpose of this visit was to support the New Zealand Government by demonstrating that our farmers are also passionate proponents of trade liberalisation – reducing tariffs on our exports and the amount of trade distorting subsidies that our competitors get.
A B+LNZ paper dealing with trade subsidies and NZ agriculture, posted online in February, said:
As a major exporter of agricultural products, New Zealand has a keen interest in eliminating trade barriers and ensuring a level playing field for its farmers in the international market. While many countries subsidise their farmers, the New Zealand Government does not. This reliance on market forces to drive production has resulted in our agricultural sector being nimble and extremely efficient. Our farmers are able to quickly respond to consumer demand and maximise profits, rather than being reliant on continually producing the same thing to receive their subsidies.
Point of Order therefore was surprised to learn that the Luxon Government is joining the next phase of the ‘Taste Pure Nature’ campaign that aims to position New Zealand beef and lamb as the highest-quality red meats of choice for Chinese consumers. It is chipping in $8 million.
The news was announced by Agriculture and Trade Minister Todd McClay – proudly, let it be said – at a signing ceremony in China,.
“Today I am announcing that we will co-invest $8 million to boost New Zealand beef and lamb exports to the Chinese market.
A much bigger lump of money is involved in the government’s signing – along with three Kurahaupō Iwi – an agreement to resolve the post-Treaty settlement issue of contaminated land at RNZAF Base Woodbourne.
This will cost taxpayers $25.2million.
Ngāti Apa ki te Rā Tō Trust, Rangitāne o Wairau Settlement Trust, and Te Rūnanga o Ngāti Kuia each received $8.4 million after contaminated soil at Base Woodbourne near Blenheim prevented the three Iwi from purchasing a substantial part of the site as originally intended in their Treaty settlement redress.
The spending commitments are included in the latest batch of media statements posted on the government’s official website.
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At the signing ceremony in China, Todd McClay said:
“Today I am announcing that we will co-invest $8 million to boost New Zealand beef and lamb exports to the Chinese market.”
New Zealand is currently the second largest source of international lamb for Chinese consumers behind Australia, and the sixth largest supplier of beef.
“Together with the sector we have set a joint target of making New Zealand lamb the number one preference with Chinese consumers replacing Australia as the largest lamb exporter to China,” Mr McClay says.
The ‘Taste Pure Nature’ campaign is a partnership between the Government and the red meat sector that will strengthen our red meat brand in China, differentiating it from our competitors, and driving better returns for kiwi farmers and processors.”
As of June this year, 29 per cent of our total red meat exports went to China valued at $2.86 billion, including $1.27 billion in beef and $1.05 billion in sheep meat.
“China’s growing middle class of over 500 million consumers want fast, efficient, ready to eat high-quality safe food. New Zealand’s red meat story is compelling, and one we need to shout from the rooftops,” Mr McClay says.
Notwithstanding its position on subsidies, Beef + Lamb New Zealand has gone along with the deal.
As McClay said:
“Led by the Meat Industry Association (MIA), with support from Beef + Lamb New Zealand (B+LNZ), the campaign will highlight the superior nutritional qualities and attributes of our grass-fed, free-range New Zealand red meat.”
Red meat exports are a big part of meeting the Government’s ambitious target of doubling the value of New Zealand’s exports in the next ten years, McClay says.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
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