Meat marketing policies attacked

Press, 9 October 1982, Page 3

Meat marketing policies attacked

PA Auckland Subsidies paid to meat farmers came under strong attack yesterday from meat'exporters alarmed at the state of the industry. The exporters’ concern follows up a Meat Board’s decision to buy all export lamb and fnutton because of a downturn in the world market.

The corporate adviser of R. and W. Hellaby, Ltd. Mr Owen Cook, said the company had no choice but to support the Meat Board's move.

“As far as we are concerned, there is really little other option because it is impossible to set an export schedule and that, is brought about because the Meat Board will not recognise the

prices obtained in the market." he said.

“The.board will not recognise the price of the product in the United Kingdom and the United States or elsewhere. It sets a price here that does not relate to the market price." Mr Cook said supplementary minimum payments and the board s minimum price were , detrimental to the future of the industry in New

Zealand. “Farmers are being overpaid in terms of what their product is worth on the overseas market. We are saying that the Americans are creating a butter mountain by paying subsidies but we are doing the same with lamb.” Mr Cook said. “There are 29.000 tonnes of lamb in the United Kingdom in store and that is 10,000 tonnes more than we would normally have in store. British buyers know that and they are not prepared to pay more.”

Mr Cook said that when the export system was working properly there were no S.M.P.s or minimum prices and New Zealand was more geared to the international market.

“We were trading lambs at market value and the farmers were being paid accordingly, but, for political reasons the ’ Government stopped that and paid the farmer S.M.P.s and the Meat Board stepped in and paid minimum prices.” Subsidies, Mr Cook said, had been keeping pace with New Zealand’s high inflation rate while prices received overseas were matching lower inflation rates there.

As a result the New Zealand industry was overpricing itself.

The managing director of Thomas Borthwick and Sons (Australasia). Ltd. Mr Peter Norman, suggested yesterday that S.M.P.s should be replaced by payments per head of stock to farmers to “take subsidies out of the market place.” “These would not distort the marketing structure. At the moment, the farmer is insulated against the market, whatever his product is worth."

Mr Peter Johnson, general manager of W. and R. Fletcher (N.Z.). Ltd, said. “We must be concerned that production is dictated by a price that does not relate to the market place.” He said the arguments against subsidies to meat farmers were similar to those against the E.E.C.’s Common Agricultural Policy — “expensive” protection for farmers at the taxpayers’ expense. But Mr Johnson predicted that if the subsidies were dropped overnight it would have a "horrible effect” on New Zealand's living standards.