Inflation threat seen

Press, 13 May 1981, Page 12

Inflation threat seen

Tinsaru reporter Inflation poses a threat to the comparative advantage New Zealand has enjoyed over its international competitors p the production of meat and wool, according to Mr N. W- Taylor, director of the Meast and Boards’ economise service. Mr Tajylor told the annual conference of the Catchment Authorities’ Association at Timaru <that inflation had to be of glaive concern to planners an|d policy makers generally. ; “We : are experiencing inflation in the farming industry at a rate much greater than the rest of the r New Zealand! economy,” he said. The .rate of inflation a

month .was greater than was experienced tier year in the early 19605, Mr Taylor said. However, there was scope for integrated land use in the hill and higi country, be it forestry, electricity, tourism,' recreation, vr other forms of agriculture. Careful k planning was necessary, and prudent stocking rates and management systems had to be the order of the’ day, Mr Taylor said. There was certainly a need to explore alternatives to the present land-use systems, but it was necessary to tread warily before committing resources on a significant scale. ' “There is a great danger in chasing fashions, when the

real potential still lies mainly with traditional agriculture,” Mr Taylor said. Examining the role of agriculture in the New Zealand economy, Mr Taylor said that in 1979-80 the agricultural sector generated 72 per cent of New Zealand’s export earnings. It was imperative, therefore, that agriculture did not falter in the meantime. In the recent “Agrow” campaign, estimates of future export earnings, from agriculture were calculated, based on either a 30 per cent or 50 per cent rise in output over the decade to 1990. It was estimated that' there were about 130,000 people working on farms, and about

70,000 engaged in primary processing industries. At a growth rate of only 1.5 per cent per annum in total employment, some 32,000 additional jobs would be provided over the decade. This aspect of an expanding agricultural sector was of vital importance to New Zealand at a time when unemployment was high, Mr Taylor said. These jobs in agriculture would be provided at a direct capital cost of between $75,000 and $150,000 per job, compared with $1.3/ million per job for the 2000 additional jobs provided directly by the capital-inten-sive energy projects proposed for this decade, he

Total sheep and beef stock units were estimated to reach 90.9 million, by June this year, the highest yet recorded, 4.8 per cent higher than a year earlier. With improved seasons in the last two years, the lambing percentage had risen from 90.4 per cent in 1978 to an estimated 100 per cent in 1980, the highest recorded since 1961. / With both improved wool clips and lambing percentages, combined with the higher stock numbers, there had been a spectacular increase in the output of sheep, meats and wool.

Both wool and lamb production were now at record levels, and production this year would be more than 20 per cent above levels of only three years ago, Mr Taylor said.