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Trading Turmoil

Greeting Readers

Today's news has that dreadful warning ring being sounded at a time of significant recovery of the NZ rural economy.

All is not well with international farming and farm trade and the flash points are starting to emerge.

The EU's intolerance of the second major livestock disease outbreak in Britain will have significant long term effects on the way the EU manages its cross boarder trade. Particularly in meat where major programs are underway to try to diminish the anguish caused to producers from another region of EU by farmers who are still considered foreigners.

But even more significant has been the strident criticism of the appalling conditions prevailing on the farm where the original F&M outbreak appears to have occurred in Britain.

The UK media has driven home the realisation that demand for low cost food supported by costly subsidies has not created a pleasant rural environment for livestock and livestock farmers.

Where is the fault? Is it the consumer's expectation for cheap food? The farmers demand for subsidy and market manipulation? Or the politicians blind belief that direct rural support was the only tool available to ensure re-election?

The veganism proponents must be gloating over the mess that meat producers have created by drifting into such debilitating production systems that now seem to be falling victim to disease consequences that will be far reaching and costly to rectify. But even more concerning is the sensitising of the consumer to production faults in many livestock farming systems? Can consumption levels for beef and sheep meats recover from such sustained bouts of bad publicity?

US farmers have set out their demands for a doubling of direct subsidies to $NZ55 billion to maintain their industry. Such an action may be within the rules of the WTO but they are certainly not within the spirit of the direction that agricultural world trade was being pushed since the Uruguay round mapped out a plan to reduce first world subsidies of agricultural production

How the US will control the 'leakage' of such a large support program onto world markets is frightening enough. But when positioned against the USDA's recently announced plan to lift US Agricultural sales internationally by 20 percent the effect may be devastating on international prices for the very products that NZ markets internationally.

Finally and ironically the pushy little Aussie plan to 'fight dirty' when confronted by players who appear to be breaking the trade rules can bring a wry smile to those nations who have already experienced the other face of the Aussie character pursuing self interest.

Perhaps the ghost of Walter Nash still resides in the NZ labour caucus and a revisit to the guaranteed price schemes of the 1930's is being planned at this moment! Otherwise is it back to the 90's for farm returns?

Good farming

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