THE PRESS TUESDAY, JULY 15, 1980. Fuming tobacco farmers

Press, 15 July 1980, Page 16

THE PRESS TUESDAY, JULY 15, 1980. Fuming tobacco farmers

Tobacco growers, and the community of Motueka which depends on tobacco for some of its prosperity, need more information before they can be sure that the Government's plans for the industry will be as damaging as is being claimed. Tobacco growers are a relatively rare breed among New Zealand’s primary producers. They plant their crops each winter to meet a known demand in the next autumn. They are offered a guaranteed minimum average price. They are protected from foreign imports by a requirement- that New Zealand tobacco products must contain at least 30 per cent of locally grown leaf, and by import licensing which restricts manufactured tobacco imports to about 5 per cent of total sales in New Zealand.

The Government has proposed to phase out controls and protection over five years, leaving tobacco companies free to buy leaf as cheaply as possible where they can. Those growers who can compete with imported leaf will presumably stay in business. Those who cannot compete will be encouraged and assisted, in a manner not yet clear, to switch to other crops. It is not to be lightly assumed that many growers are inefficient.

So far it is not clear whether the Government’s plans include opening the way to unlimited imports of manufactured tobacco products. Such a measure would be in line with the Government’s avowed intentions of reducing controls on private enterprise, and of giving more opportunity to market forces. If significantly more imports were allowed from countries with lower labour costs than New Zealand’s, the restructuring of the tobacco industry would be felt in other communities as well as Motueka.

. For those New Zealanders who persist in smoking, in spite of the attempts by the Health Department and the medical fraternity to discourage the habit, the removal of licensing arid regulation from tobacco growing would probably bring cheaper tobacco and cigarettes, although the difference might be hardly noticed when inflation and taxation mean frequent increases in price. In itself, that is hardly justification for disrupting an industry which

provides valuable seasonal employment and saves the country millions of dollars a year in foreign exchange. The changes proposed might be justified, however, if the Government and its specialist advisers in the Agriculture Department, the D.5.1.R., and in the Department of Trade and Industry can show that some of the land used for growing tobacco could be used more profitably to grow other crops. Even then, to justify abandoning tobacco as a crop on some of the land used for it now. it would have to be clear that the alternative crops would earn more in export sales than New Zealand would lose by having to pay to import more of its tobacco. A further qualification needs to be made. Alternative crops suggested include a variety of fruits, vegetables, berries and flowers. Some of these take time to become established and there would have to be generous help for growers to make the change. Tobacco growing requires investment in plant and machinery, such as kilns and mechanised picking machines. A fair formula would have to be worked out for former growers who found expensive investments became virtually worthless.

Above all, there would be little point in encouraging a change to other crops if the result was a glut in such products as kiwifruit and boysenberries for which New Zealand is working to find adequate export markets. To damage producers of other crops as part of a programme to dismantle part of the tobacco industry would be harmful and stupid. The Government will need to satisfy tobacco growers, and the rest of the community, on all these points before it can expect even modest enthusiasm for its proposals. The theory that controls and protection should be abolished, as far as possible, to make New Zealand agriculture and industry competitive on world markets, is enormously attractive. New Zealand must also be consistent when arguing internationally against agricultural protectionism. The plans so far announced for the tobacco industry demonstrate how awkward to implement, and how far reaching in their implications, such proposals can be.