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Food prices should be seen in context

16 April 2008
Food prices should be seen in context

"John Key's rhetoric about food price rises does not stand up to scrutiny," Agriculture Minister Jim Anderton says.

"Since Helen Clark and I came into Government in 1999 the food price index has increased by 28% in line with international trends, while inflation has increased by 24.7%. In the same period average wages increased by 33.7% and the minimum wage increased by more than 71%.

In other words, New Zealand households can buy more at the checkout now than they could then.

Between February 2001 and February 2006 fruit and vegetables got cheaper. Meat, poultry and fish prices peaked in June 2002 and then remained at lower prices through until 2006. Only last October did the price of milk, cheese and eggs return to the level they had been five years previously after reaching their lowest point in the second half of 2006 and the last half of 2007."

"Throughout this period many farmers, growers and orchardists were facing increasing costs, including wage increases, but their margins kept being squeezed by retail competition and low world prices. The consumer was the winner throughout this period but it was unsustainable for producers. No prices are starting to reflect the costs of production.

"Food price inflation is a real issue for our poorest households but the solution is not to propose lowering prices for our high quality food producers but to grow incomes faster than the price of groceries, exactly as the Labour-Progressive Government has been doing."

"Is John Key going to tell dairy farmers they are being paid too much for their milk? Is he going to tell sheep farmers that meat prices shouldn't rise to make their production profitable? Or our horticultural producers? I look forward to him telling rural New Zealanders that they should earn less for their production or that the Government should intervene in commodity markets to keep farm gate returns low.

"Increased global commodity prices are actually beneficial for New Zealand overall. The priority is to ensure the benefits are passed to everyone. That way we can make New Zealand both stronger and more caring."

ENDS


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