Sugar Beet

Press, Volume CIII, Issue 30368, 18 February 1964, Page 12

Sugar Beet

The report on the costs of sugar beet production in the European Economic Community provides a yardstick by which the projected New Zealand sugar beet industry may be measured. In the six countries of the Common Market, where the industry is well established, the cost of beet sugar to the consumer varies from 8d to lOd before tax. The proponents of a New Zealand sugar beet industry will need to show that a New Zealand industry would deliver sugar to the consumer cheaper than that. Until this year, sugar has rarely cost the New Zealand consumer 8d per lb before tax; two years ago the price was 6Jd; last year (under the stabilisation scheme) it rose to 9d, and today it is Is 2d, plus a duty of Id per lb. Overseas prices for raw sugar are now falling and a return to earlier levels of retail prices in New Zealand would seem to be only a matter of time.

It is always a difficult exercise to compare the costs of an established, industry in one part of the world with the probable costs of a projected venture 10,000 miles away. Some conclusions, however, can be drawn from the E.E.C. survey and from published reports on New Zealand investigations to date. Higher yields of sugar than those in the fertile Po Valley have been shown in New Zealand trials. The New Zealand industry would be launched with the most efficient equipment available, both for the farm and the factory. New Zealand farmers are among the world’s most

skilful and adaptable and could be expected to master very quickly the best beetgrowing techniques. On the debit side of a New Zealand industry would be the scarcity of labour; the high rewards from less arduous methods of farming, and the large initial capital investment, calling for large depreciation allowances. Finally—arid perhaps most important —is the unanswered question of what alternative crops or animal products would be forgone to produce sugar beet. If some potato acreage were sacrificed to beet, New Zealand would need to import potatoes in most years; if wheat, then we would need to import more wheat; if sheep or cattle, then our export earnings would be reduced. Except in the unlikely event of each beet grower maintaining his present level of production of other products, the new industry would lead to an increase of imports or a reduction of exports. The saving in foreign exchange, which is urged as one of the strongest arguments for a sugar beet industry, might well be negligible. The Government has wisely not committed itself to such a project, and should heed the Banco, di Roma’s warning: “Nobody has ever succeeded in persuading the “ responsible governments “to give up local produc- “ tion even if it comes more “ expensive than the sugar “ offered by the inter- “ national market ”, Certainly, the international market “ reflects a very “ modest part of world production”; but New Zealand represents a very modest part of world consumption.