THE PRESS TUESDAY, SEPT. 27, 1983. Adding value to exports

Press, 27 September 1983, Page 16

THE PRESS TUESDAY, SEPT. 27, 1983. Adding value to exports

Adding to the value of New Zealand’s exports is essential rather than just desirable. The country has sold markedly greater volumes of exports in recent years without a corresponding improvement in the balance of trade. Selling more goods has enabled New Zealand to keep pace with its financial commitments, but little more. Increased volumes of exports have kept the country’s head above water; volume alone cannot cure the country’s economic ills. It has become imperative that New Zealand get better returns from exports. This can be achieved best by adding to the value of the exports before they are sold, usually by further processing in New Zealand. New Zealand’s biggest export industry, the meat industry, has long been declared a suitable candidate for value-added processing, and so it should be. Value can be added to carcase meat relatively easily. The volumes of meat exported are so large that the addition of a cent or two in value to each kilogram can mean millions of dollars in total. In addition, further processing could alleviate unemployment. The Opposition spokesman on agriculture, Mr Colin Moyle, has renewed the debate with the suggestion that a Labour government would provide loan money to build small cutting plants to process export lamb. Mr Moyle envisages plants employing perhaps 250 people, costing about $lO million on today’s prices, and having a throughput of about 2500 lambs a day.

Mutton and beef would be processed in the offseason to make the plants year-round employers. Unfortunately for progress, the meat industry unions have a tradition of meeting innovation with an upturned palm. Anything new or different in the nature of their work or in the equipment that they use can become an excuse to demand more of the employer, either in money or conditions. Experience has shown that the creation of completely new plants — and the creation of completely new jobs — are not free from industrial unrest in support of some additional or special claim from the unions. This unsatisfactory history should not deflect Mr Moyle from his purpose; but he must be aware that it has spelt doom to such enterprise in the past. Mr Moyle’s proposals are attractive, but not altogether new. They would gain more support if Mr Moyle could produce an assurance from the appropriate unions that attempts to add value to meat exports would not be smothered by an avalanche of union demands. The additional processing will not be of any avail if the product is overpriced. Customers overseas will not buy the meat; or they will prefer carcase meat and insist upon doing the further work more cheaply themselves. New Zealand can beat overseas farmers in producing the stock at a competitive price; it must also beat overseas factories at processing.