Exports leap 'if farm costs cut’

Press, 26 August 1980, Page 22

Exports leap 'if farm costs cut’

PA Wellington New Zealand farmers will be earning $4 billion in exports in just a few years and be well on the way to $5 billion if the present rate of growth in agriculture is sustained, according to the DirectorGeneral of Agriculture (Mr M. L. Cameron). In the annual report of the Ministry of Agriculture and Fisheries tabled in Parliament he said that the immediate outlook was for a continued reasonable demand for New Zealand’s main export products, in spitec of uncertainty over the E.E.C. and the prevalence of protectionist philosophies. But Mr Cameron cautions that New Zealand must reduce the rate of increase on costs to get produce to overseas markets. He says the real gains for New Zealand farming over the next decade lie not in increased on-farm efficiency, but in cutting the costs of marketing between the farm gate and the consumer. “If we cannot reduce the rate of increase in processing, storing,. and transporting our products, the residue left for the farmer will become insufficient to support our intensive production systems.” Mr Cameron says it will be more critical to discover ways to cut costs than to increase production. “A climate which encourages and rewards successful innovative investment will be crucial,” he says. The report says that farmer confidence has been renewed by two years of good pasture growth and favourable prices. Current incentive and underpinning policies have also played a significant part in setting the livestock industries “back on a growth path.” The report says the up-

shot is that the 1979-80 season appears set to break all-time records in both milk and wool production.

Sheep numbers stand at a record 66.5 million and this increase, in contrast to recent years, has not been at the expense of cattle numbers, which are expected to stabilise. The report suggests that farming production could be raised about 50 per cent on the basis of current technology and known management techniques. It says that to attain such a goal would require, above all else, bringing under-utilised land into greater production through persuading the farming majority to adopt management systems at present used only by the most efficient. But, Mr Cameron says many farmers are not striving for the highest possible productivity. He suggests that as a hedge against inflation, some

well established farmers are investing in more land rather than re-investing in on-farm development. Productivity on the aggregated holdings is in many cases declining and capital in the form of duplicated sheds, yards, and dwellings is underused. Nor does re-investment occur as other landowners await opportunities for subdivision and sale of their properties to small holders and horticulture investors. Other sources of farmer, dissatisfaction acting against growth are the cost-price squeeze, industrial trouble, and perceived sectional gains in living standards in urban areas. Lack of farm labour and the lack of opportunity some farmers give their sons to obtain managerial skills through outside experience are further factors mitigating against incr eased productivity, according to Mr Cameron.