Trading TurmoilTuesday, Feb 27, 2001
Today's news has that dreadful warning ring being sounded at a time of significant recovery of the NZ
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