Rising dollar offsets gains in marketplace

Press, 9 October 1987, Page 29

Rising dollar offsets gains in marketplace

The strengthening value of the Kiwi dollar was eating away at any gains in the international marketplace for New Zealand produce, claims the Dominion President of Federated Fanners, Mr Brian Chamberlin. He told a meeting of farmers at Irwell this week that there were signs of an improvement in the world markets for dairy products, beef and grain. But this good news was offset by the tragedy of the rising value of the New Zealand dollar which meant fanners would not get any benefit from an upswing in the international market. Mr Chamberlin returned recently from a trip to Europe where he helped argue New Zealand’s case for access to the European market and to make sure negotiations on the General Agreement on Tariffs and Trade (G.A.T.T.) stayed on stream. He said he was confident the G.A.T.T. negotiations would be successful, although they would take a long time, and would result in an improvement in world trade. This would be good for exporting countries such as New Zealand. In the short term, improvements have been

made in dairying and the beef situation was improving, with European farmers claiming they would not be self sufficient in a few years. A lot of cropping land had been set aside in the United States and much of Europe was looking at a poor harvest, with some areas predicting it would be the worst for many years.

However, unless there were substantial changes to New Zealand’s economic situation, farmers would not benefit from the improvements in the international market. Federated Farmers had put forward policies which would get on top of inflation and the Government had put some of these into place, said Mr Chamberlin. However, there were many more steps suggested by the federation which the Government had not implemented. “Some people have mistakenly lined up our policies with those of the present Government’s, but in fact there are substantial differences between what the federation suggested and what the Government has done,” said Mr Chamberlin. “The Government had done some of the easy things, but has not moved at all, or only very slowly,

on the harder aspects.” The Government had failed to bring inflation under control and must have another look at its policies, he said. Farmers could not compete on an international basis with the current level of interest rates and inflation. He suggested the Government should reduce its spending and free the labour market which was still one of the most controlled markets in the Western world, in spite of some changes. The Government had moved very slowly in reducing protection for secondary industry which should have been stripped of some protection when the Government had devalued. Mr Chamberlin said he believed the federation’s economic policy was the correct one, although the Dominion Council would

be taking a hard look at its policies in November. In the light of the economic circumstances, the federation might have to make some modifications, he suggested. In answer to a question about farming’s future by the mid 19905, Mr Chamberlin said New Zealand’s farming industry had the potential to be the most efficient producer in the world. But this depended largely on the management of the economy as the industry also had the potential to go broke. There was a lot of work to be done in the marketing sector as well as the transport and labour sectors if New Zealand farmers were to claim their rightful share of the market returns. Mr Chamberlin was on his first visit to North

Canterbury as Dominion President. Earlier he had visited the Amuri district followed by a meeting with farmers near Rangiora.