THE PRESS TUESDAY, OCTOBER 23, 1984. Better to unite than fight

Press, 23 October 1984, Page 12

THE PRESS TUESDAY, OCTOBER 23, 1984. Better to unite than fight

Overtures from the national organisation of farmers in Australia proposing greater cooperation between Australia and New Zealand in the marketing of agricultural produce in third countries deserve serious consideration. Almost at the same time that the president of the Australian National Farmers’ Federation, Mr lan McLachlan, was advocating a joint effort by the two countries to market agricultural surpluses, New Zealand’s Minister of Overseas Trade, Mr Moore, was defending the New Zealand Meat Board’s decision to render down 40,000 tonnes of export lamb and mutton into tallow and meal because markets cannot be found for it. In the present circumstances of world agricultural surpluses and mounting agricultural protectionism, the concept of trans-Tasman co-operation should receive prompt investigation to identify any obstacles and to devise ways around them. The logical starting point for a co-operative effort would be in sheepmeat exports. Australia and New Zealand are the two biggest exporters of sheepmeat in the world. Between them they account for most of the lamb and mutton traded on world markets. Competition between Australian suppliers and the New Zealand Meat Board, which controls all exports of carcase and primal cut lamb, has become intense, particularly in Japan. In some respects the Australians have stolen a march on New Zealand with their promotion in Japan of grainfed lamb and smoked lamb, both of which have a different smell from New Zealand’s grass-fed product and are more readily acceptable in Japan. The Australian initiatives can be countered, but the trade then becomes something of a see-saw battle that costs both countries. New Zealand and Australian lamb exporters are openly waging a price war in Japan. The pointlessness of this led to talks in Sydney earlier this month between representatives of the industries on each side of the Tasman. The meeting was to be a prelude to hammering out a joint marketing plan for Japan. The result of that meeting has not been made public. Presumably any progress towards a joint plan will be slow. The fact that the meeting was held, coupled with the subsequent feelers from the Australian farmers’ organisation, is evidence enough of a willingness to put an end to needless pricecutting and duplication of effort. Although price-cutting might help one or other country to gain a sale in Japan, it is to the detriment of both countries in the long run. Great efforts have been made to promote lamb as a top-of-the-market food and a quality product; this work is undone overnight if competition to gain a sale means virtually dumping tonnes of lamb in Japan at bargain prices. Japan is something of a special case, however. Even if the marketing efforts of Australia and New Zealand could be put on a rational footing there, this would be only a part of the answer. The development of a highquality, high-price market in Japan demands the best product, preferably chilled and not frozen. Thousands of tonnes of sheepmeat languish in freezers in Australia and New Zealand, and virtually none of it is suitable for the Japanese trade. Unless this is to be reduced

to meat and bone meal, or to tallow, other markets must be found, markets where good quality is a sufficient recommendation and not only the very best will do. In these markets, Australia and New Zealand are likely to face competition from the European Economic Community which has stockpiles of its own, created at great expense under the subsidies of the E.E.C.’s common agricultural policy. 1 The options are few. The meat cannot be held in storage indefinitely. Over time its quality drops; there comes a point where the cost of storage erodes any profit that might be had from even the best prices; and the pressure on storage space must be eased to make room for the new season’s kill. The indications so far are that this season’s kill will be a record and storage space will be at a premium. The surpluses cannot be dumped on overseas markets without bringing down the price New Zealand gets for its other sales and without inviting retaliation from competitors. The result could be a vicious trade war and the risks are too great. Selling the surpluses cheaply on the domestic market is not a solution. A little of the surplus product is being sold this way at present, particularly through retail chains. The stockpile is too large to get rid of this way, however, without completely disrupting the local market. Even offering the meat as aid is not a solution. Many of the countries in need of the protein that the meat- could provide have no tradition of eating sheepmeat; as a food it would not find favour readily. An even bigger problem is that most countries to which it would be sent as aid do not have the storage of distribution systems necessary to cope with a highly-perishable frozen product in the high temperatures common to most Third World countries. The meat would rot on the wharves before it could be delivered to the hungry. New ways of processing meat — canning and freezedrying for instance — might not only make sheepmeats an acceptable product for many Third World countries, but create a new market. An added attraction of this course is that the extra processing of the meat before it is exported would create extra jobs here and in Australia, The research, product development, and promotion that would be necessary to launch such products would be an ideal focus for transTasman co-operation. In the spirit of the closer economic relations agreement, representatives of the various parts of the meat industry in Australia and New Zealand are beginning to talk to each other about working together for their mutual advantage. The president of New Zealand Federated Farmers, Mr Peter Elworthy, will have the opportunity to enlarge upon this theme next month. He has been invited to open the national conference of the Australian Farmers’ Federation on November 20. Before the closer economic relations agreement could be signed, the co-operation of farmers on both sides of the Tasman was required, particularly in respect of dairy production. The co-operation was forthcoming. If farmers can be persuaded now of the need for co-operation in sheepmeat exports, the other sectors of the industry will not be far behind.