Economist's Claims Nonsense

25 August 2000 PR102/2000

ECONOMIST'S CLAIMS NONSENSE

Charlie Pedersen, Chairman of Dairy Farmers of New Zealand, has called the idea that dairy farmers are stealing money from the economy as bizarre.

Mr Pedersen was commenting on a claim by an Infometrics economist Gareth Morgan that dairy farmers are stealing money from the economy to sustain a lifestyle for future generations.

"We do not take anything from the economy other than what we hold back to invest in our own industry. To an economist this might be called opportunity cost but to a practical farmer it is called common sense," Mr Pedersen said.

"New Zealand farmers are unsubsidised, commercially driven, and all revenue is from freely traded goods. We have no guaranteed markets buying our products."

"New Zealand dairy farmers are the most efficient in the world. This is because we have efficiencies and ingenuity funded by farmers themselves," he claimed

"The plain facts are that it is farmers' money to invest as they see fit and dairy farmers have been doing a very good job of managing their own businesses and industry up to this point."

Generations of dairy farmers have built the New Zealand dairy industry into the largest and most successful business in New Zealand today. "The 14,500 dairy farmers, whose business acumen that Dr Morgan disparages, now contribute 20% of New Zealand's export revenue and provide thousands of off-farm jobs within New Zealand."

"Furthermore, dollars spent by farmers has a huge multiplier effect beyond the farm gate. Rural communities get a major boost from this investment."

"What other industry can claim today that it is totally New Zealand owned and that all profits, the vast majority acquired overseas, are returned to New Zealand."

"New Zealand dairy farmers have a proven track record of seeking sage advice to assist with both on-farm and off-farm decisions. I doubt that many will be flocking to Dr Morgan's door for advice."

ENDS For further information: Charlie Pedersen 025-463-480 Kevin Petersen 04-473-7269 (wk)

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