No need to apologise for performance of agriculture in 1970s

Press, 12 September 1980, Page 18

No need to apologise for performance of agriculture in 1970s

- On these pages last week some references were made to the fact that the performance of the pastoral industry in the 1970 s may have been much better than had been thought.

At the recent annual convention of the Institute of Agricultural Science in Auckland the retiring president, Mr A. D. H. Joblin, of Christchurch, made a vigorous defence of the' performance of. the agricultural industry in that period. . “We hear a great deal about the development. of energy intensive industries based on electric power and Maui gas, about- the prospects for expansion of,' the timber based industries, of the fishing industry and of export based manufacturing industries',” he said. "With the notable exception of horticulture, we hear remarkably , little about the prospects of expanding our agricultural export capacity vastly beyond the limits of present horizons. “To the extent that we allow this to happen we are doing a great disservice to the country and to the industry that we serve. “In agriculture it has become fashionable to focus attention on problems of farm production costs, market restrictions, transport and product processing. . Industry leaders and agricultural scientists have both been guilty of projecting the wrong image of agriculture; We have allowed the impression to be built up that agriculture has had its day and that it is time to Step aside and let other' industries .pick up the running in developing export trade. Not only is this nonsense, but it is dangerous nonsense, and it is high time that agricultural scientists - and everyone else associated with agriculture stood up and said so — loudly and clearly before it is too late.” Mr Joblin went on to make a. series of com-, parisons to bear out his contention that agriculture, in reality, had not done too badly at all. In

one table he showed that in the six years from 1974 to 1979 while the consumer .prices index about doubled and the relative cost of imports did about likewise, the total value of exports (mainly agricultural) went up by about two times and a half. However the invisible deficit increased four to five times. "What does stand out is the strong showing made by exports relative to both imports and consumer prices,” he commented. “These figures are particularly impressive when related to the rise in oil prices that has taken place over these six years — from $2.47 a barrel at the end of 1973 to $18.65 in mid 1979. In terms of over-all import payments we appear to have weathered the ‘oil storm’ to date, and despite the many gloomy predictions to the contrary, we can continue to do so into the future. “The trend that seems to be more disturbing is that of the ever growing invisible, payments deficit. This has increased by nearly SIOOOM from a

base of $294M, or by 432 per cent, in six years and show's no sign of slowing down. Even the excellent performance of exports has failed to keep up with, this growth in the invisible payments deficit, which as a percentage of export receipts has risen in each of the last six years. If this trend is allowed to continue in 55 years our entire export income would be required to service the invisible payments deficit. "An examination of the causes of this deficit shows that the main factor involved is the cost of overseas travel, which has risen by 249 per cent in dollar terms, or by over 3 per cent of export income, during the last four years. “Somewhat surprisingly, overseas debt interest payments have been relatively constant when expressed as a percentage of export income, and equally surprising this analysis suggests that the deficit on freight and transport costs has not been a major factor in this growing problem of invisible payments deficits.” '

Returning to the matter of farm production, Mr Joblin said “we have fallen into the habit of talking about stagnation in production in our major agricultural industries in the 1970 s and often concluded from this that w'e must look elsewhere for future development. “Certainly this impression is supported by the production figures for milkfat, wool and sheepmeats presented by Ojala this year (comparing the periods 1964 to 1967 and 1975 to 1978 he showed that for these products the average level of production remained fairly constant). But as Taylor both this year and last year has pointed out, this simplistic interpretation ignores two very pertinent facts. “Over the period 1967 to 1977 some 9 per cent of the basic resource of the pastoral industries — pasture grazing — was lost to other enterprises. Further the availability of our other major pastoral resource, a well distributed rainfall, declined in the 1970 s compared with the 19605. Whereas the number of days of agricultural drought averaged 29 in the 1960 s they increased to 37 in the 19705, compared with a long term average of 32. “To this must be added the applied technology gap created by rapidly rising stock numbers in the 1960 s leading straight into the droughts of the 19705. Farmers, scientists and extension ' workers had to

work out management techniques to cope with the effects of higher stocking rates, drought and associated pasture pest problems, greatly increased costs of growing, processing and selling farm produce and still show a gain in profit. "In all too many cases the stock management for intensive, rather than ex* tensive fanning systems, was not understood by the farmers involved and intensification of farming became associated with a decline in profitability. Agricultural scientists and extension workers must take their full share of responsibility for the situation that developed ;. . “But in spite of these problems there were still indications in the 1970 s of the potential for a rapid expansion of agricultural production that was latent within the industry. Beef production increased (in the periods already mentioned) by 80 per cent to reach a greater tonnage than sheep meats . . . Traditional horticultural export ’ production in pip fruits rose by more than 50 per cent and frozen vegetable production more than trebled. The kiwifruit phenomenon was too recent to even get into these comparative figures. “Every major agricultural industry has made a full contribution to the expansion in export income in the last six years. The only form of production that could be considered to have lost ground, relat-

ive to other exports, _is dairying. Although dairy exports have lost about two per cent in these terms, they have still shown an increase in export income of 9 per cent after discounting the effects of inflation. This is a highly creditable achievement in the light of Ojala’s calculation that dairy farmers’ personal incomes had declined in real terms by 30 per cent between 1972-73 and 197879. Horticulture has been doing well, but perhaps not as well as the much less publicised animal industry by-products. “Another way of demonstrating the performance of agricultural exports over the last six years is to relate the earnings of agriculture to import payments. This shows that whereas agriculture was able to pay for 60 per cent of the country’s visa ible imports in 1974-75, its ability to do this had risen to over 90 per cent in 1978-79 ... . In relation to import payments of all types die proportion paid for through agricultural production has risen from 45 per cent to 57 per cent over the six-year period.” And Mr Joblin concludes: “Rather than apologising for the performance of agriculture in the 19705, we should be highlighting its achievements and ensuring that policy makers and farmers alike recognise its potential for the future.” Mr Joblin said that the agricultural industries had every reason to be proud of their contribution to export production in the. 19705.

“The growth in export returns from agriculture in the last six years, in spite of some climatic difficulties, is equivalent to the total 1979 income from non-agricultural exports.” ■