Sunday, 13 March 2011

Labour Values Rural New Zealand

Growing up in the 1970’s I spent many holidays on my mate Andrew’s family farm. I learnt to ride a motorbike, fix a fence, feed out and shoot a rifle. I also learnt how to milk the house cow and that meat didn’t come from a supermarket in a plastic packet. Even then most Kiwis didn’t live in the country.

While most Kiwis live in cities and towns, urban growth is dependent upon a thriving agricultural sector. Simply put, without primary producers townies would starve and many would not have jobs. Agriculture remains our largest export earner and as a sector remains one of our largest employers.

Labour values the rural sector as being especially important to New Zealand’s economic future. In the 1930’s Labour introduced a guaranteed minimum price for milk to try to stop the squeezing of dairy farmers by milk buyers. In the 1950’s Labour moved to form the Dairy Board to bring focus to the purchase and marketing of dairy products internationally. These changes and innovations have continued through the ensuing Labour administrations. In the early 2000s for example, the last Labour Government deregulated the dairy industry and pip fruit sector at their request. The underlying theory being that open competition would drive innovation, industry growth and higher grower returns.

There has been much talk recently about improving water quality, product branding and improvements in broadband and other infrastructure such as roading. All these areas are vitally important and will be addressed by Labour. However more is required.

One priority is to improve ways we can push our products into high value markets. We need to utilise the reputation and quality of our products to obtain higher returns in overseas markets and deliver them back to the farm gate. That means further development of 100% Pure NZ brand and stronger Country of Origin labelling.

In November last year Damien O’Connor, Labour’s Agriculture Spokesperson, speaking to Federated Farmers, repeated Labour’s acknowledgement that there needs to be a rebalancing of economic policy.

The Reserve Bank Act will be changed compelling the governor not just to focus on inflation as a target. As Damien said “Rather than just focusing on how it can steer inflation between a narrow target band using the very blunt and limited instrument of official cash rate setting, the Reserve Bank Governor will have to consider the welfare and sustainability of the export sectors with any changes made.”

The goal behind this sea change is to encourage our exporters by reducing the endless interest and exchange rates hikes and dives that cripple the confidence and viability of many in the export sectors.

This makes sense. Long-term investment requires certainty of income. This cannot happen while traders exploit currency fluctuations and we are all left being charged exorbitant interest rates.

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