End of tobacco farming proposed

Press, 3 June 1981, Page 10

End of tobacco farming proposed

PA Wellington Tobacco farming and manufacturing in New Zealand could be eliminated after 1985 at a cost of 2000 jobs for industry workers and hundreds more in ancillary trades if the Government adopts the recommendations of the Industries Development Commission. The crucial proposal in the commission's report is that duty-free, made-up cigarettes and tobacco products should be allowed into the country from 1985. savs the "Evening Post.” The Minister of Trade and Industry (Mr AdamsSchneider) has not made the commission s report public, although it is believed to have been received by him on April 30. The report is classified as confidential and is headed, “Report of the Industries and Development Commission — Review of Tariffs and Import Licensing on Tobacco and Tobacco Products.” It is supplementary to decisions already made by the Government on the tobacco industry. Among these is an inducement for Motueka growers to sell their land to

the Government at $7OOO a hectare. Government concern about the use of prime land for tobacco growing is believed to be linked to the fact that tobacco is not export-orien-tated. The preferred land use at Motueka. according to the report, should be kiwifruit, berry fruit, hops, orchards, and forestry. The commission points out. that Motueka land is suitable for growing a wide variety of horticultural products. It points out that on a hectare basis, kiwifruit in 1980 was worth 548.000 in export revenue. Frozen raspberries earned $14,130 and boysenberries. $21,900. It projects that the 1000 hectares of tobacco being grown today will reduce to 700 by 1985. The commission recommends that the 30 per cent compulsory mixing of New Zealand tobacco with imported blends in cigarettes should be removed from August 30. Other suggested measures are:— • No price control on cigarettes and tobacco after Julv 1.

e No trade and industry price-fixing on tobacco crops after the 1982-83 season. • No Reserve Bank faciilities after the 1985-86 crop. • No quotas for growers, or licensing, after August 31, 1986. • Rebates on duty paid on imported leaf from August 31. 1982. The commission points out that the dut.v rebates have been designed to speed the use in manufacturing of surplus leaf. This would enable crops of 1,500.000 kg each year during the transition period. In 1979-80. 3,193.875 kg of tobacco were grown in the country. "It is assessed that the recommendations, coupled with decisions already announced by the Government, should provide satisfactory arrangements for the transitional period,” the report says. “They would also provide longer-term conditions under which both the growing and manufacture of tobacco will be economically viable, continue to make significant contribution to the economy, and provide satisfactorylevels of job opportunities.”