‘Hard options’ vital to meat industry

Press, 4 February 1982, Page 2

‘Hard options’ vital to meat industry

PA Wellington New Zealand’s meat industry might not survive If inflation' and costs are not controlled, particularly in the freezing industry, said the president of Federated Farmers, Mr W. R. Storey, yesterday. “We are marking the industry’s centennial now but if something is not done about inflation and costs there is no chance of a 200th anniversary; we will be scratching to celebrate 125 years.” Mr Storey, speaking at a Guild of Agriculture Journalists’ breakfast in Wellington, said that farmers, could not look to world markets and rising prices for salvation from inflation, the answer had to come from within New Zealand.

Short term, the problem had been tackled by devaluation and the supplementary minimum prices scheme, but continued devaluation could lead New Zealand into a “banana republic” situation

and S.M.P. payouts much beyond the present level would pose political reactions from taxpayers. Early basic changes needed to be made by the Government, said Mr Storey. “The. politicians are’ winning out of soft options. The hard options have got to be taken (to control inflation).”

Farmers wanted the cost of producing and killing livestock controlled. The only way to achieve stability of killing charges at freezing plants was the introduction of sophisticated technology to control labour costs.

Mr Storey described Meat Union proposals for shorter work weeks at the same wages and with increased employment as “unsettling.” “New Zealand’s meat industry processing charges already are the highest in the world. If killing costs continue to rise meat workers will find in the long run that they have no jobs.”

He said that such statements were disbelieved by

freezing workers but the meat industry’s survival was in doubt unless costs were controlled.

- Freezing-plant slaughtering of old ewes now cost $l2 a head with a return to farmers a head of only $5. In addition, 4 per cent of ewe drafts leaving the farm were in the “old” category. Such figures made it uneconomic to send old ewes for killing and some were being slaughtered on-farm and buried.

“The warning is there,” said Mr Storey. “What is happening with old ewes will go up the chain to the stage where it will become pointless to send some lambs and a higher proportion of ewes to the works.”

He said he was not suggesting that would occur with all stock but, “we make the point that if costs are too high, the product will not be sent for killing.

“That situation needs to be spelt out 'to freezing workers.”