Diversification Of Farming Reviewed

Press, Volume XCVIII, Issue 28906, 28 May 1959, Page 20

Diversification Of Farming Reviewed

Consideration of diversification of farming in New Zealand stemmed from the fact that demand and economy in many countries were not now the deciding influence on supply in domestic farming, the Director-General of Agriculture (Mr P. W. Smallfield) told some 400 South Island farmers attending the ninth Lincoln College farmers’ conference yesterday.

“Agricultural protectionism and subsidised farming in many countries have drifted into the stage where farmers are paid to produce what they want to produce and not the products demanded, or at least produce at too high a price for demand to be effective in clearing supplies,” he said.

‘‘Hence the anomaly of surpluses and dumping on the one hand, and restricted - trade and protected markets On the other. It is against this background that we must consider the future pattern of our farming. “While we applaud efforts to free trade in agricultural products, to rationalise subsidisation and disposal of surpluses, we must realise that protection of domestic 'agriculture will remain the policy of industrial countries for many years to come. “However,* even a slight mitigation of unfair practices would be of immense benefit to the market-

ing of our traditional products, and some mitigation will, I think, occur.

“We have, therefore, to consider not only whether diversification of production will help to provide outlets for increased production, but also whether diversification is .economically possible. We cannot afford to sell our produce at a loss. “We should now. I think, look at New Zealand farming as it is and in what ways it is likely to change in response to changes in demand. We must not delude ourselves that we can do anything but follow sustained demand within the limits imposed by our economy." Mr Smallfield said. Rigid Pattern New Zealand had a fairly rigid pattern of production imposed by pastoral' farming, and additional factors made it difficult to adjust production to short-term market demands. Our main market in the United Kingdom was 12,000 miles away; major changes -in livestock production necessitated changes in breeding stock, which could only occur over a period of years; and New Zealand could not afford to make major changes to meet short-term market demands, he said.

Discussing the implications of diversification, Mr Smallfleld said that it had to be remembered that New Zealand was not like the United Kingdom and most other industrial countries where there was a virtually unlimited market at guaranteed or subsidised prices for almost any commodity the farmer produced. “If diversification is to have any real meaning for New Zealand, it must be in terms of shifting resources from one export product to another. This could take one of the following forms:

“Diversion of resources in dairying to sheep farming, or vice versa. “Diversion of resources in dairy-

ing to beef or veal production “Diversion of fat-lamb raising to beef production “Increasing the carrying capacity of sheep farms, but absorption of the increased carrying capacity in the form of beef cattle rather than sheep

“In all this discussion of diversification there are many uncertain factors. We are uncertain about demand and supply; we do not know whether trade restrictions on primary products will be eased or increased; but most important of all we cannot forecast exactly the trends in 'our grassfarming methods. “Our best course is to adhere to low-cost grass-farming methods, make our system as flexible aS possible within the limits in grassfarming but avoid hasty changes in response to short-term demand,” Mr Smallfield said.