Egg restrictions unscrambled

Press, 27 March 1986, Page 21

Egg restrictions unscrambled

Egg price and marketing controls will be abolished from April 1 when the poultry industry is partially deregulated. The new regulations were drawn up after the Industries Developmment Commission report on the egg industry last October.

The Government will also review the composition of the Poultry Board, which has administered the egg industry and licensed egg marketing agents in specific areas. Import controls on eggs and egg products will be removed, but quarantine controls are unchanged. The entitlement system governing the number of chickens farmed nationally will remain, but will be reviewed in 1988.

The old system limits farmers to a maximum of 20,000 birds each, but the new system will allow entitlements to be sold freely. There will be no limits on the maximum number of birds any producer can farm.

The Poultry Board believes eggs will cost more, and supply shortages could result from the new regulations. The changes will not help consumers, the board’s general manager, Mr Glenn Kermode, said.

If the cost of transporting eggs to rural areas is too high, those areas will not have them available, he said.

Even some metropolitan areas will be affected, for example Wellington, with low egg production, but a large population. “It is likely that in areas short of eggs there will be significant price increases. The price will certainly differ from region to region,” he said.

But claims that the partial deregulation of the egg industry will mean higher prices have been disputed by Mr John Askwith, the deputy director of the Economics Division of the Ministry of Agriculture and Fisheries.

Only time would tell if such assertions were correct, but several points should be noted, he said. "For years there has been a surplus of eggs produced in New Zealand. Thfir has been sold at a loss overseas and the New Zealand consumer has picked up the tab.

“At the same time, many parts of the country have been provided with eggs through the administrative system operated by the Poultry Board, which for the most part equalised prices through-

out New Zealand. Wellington is one place where eggs have had to be transferred in from elsewhere,” Mr Askwith said. “It is a question of whether operators in the marketplace will be more responsive to supply consumer demand for eggs when and where they are required, and whether that system can operate as efficiently as the board believed its system has.” There may well be great variation in prices both regionally and seasonally, Mr Askwith believes, as well as an increase in the range of products available to consumers.

Manufacturers and bakers using eggs as ingredients could find their requirements are cheaper, he said.

“It should also be pointed out that under the system which has operated in the past, the least efficient fanners have received the same price as the most efficient,” Mr Askwith said. “The former will not survive in a more competitive environment, where, for example, the cost of feed grains and labour cannot automatically be passed on through a fixed price to the consumer.”