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Dairy matters

8 December 2010

Dairy matters

The Fonterra/DairyNZ report Dairy’s role in sustaining New Zealand - the sector’s contribution to the economy, should be placed on the desks of every employee at Treasury and the Ministry of Economic Development (MED).

“Since 1985 New Zealand agriculture has been hamstrung by the ‘sunset industry’ lie and this report goes a long way to countering it,” says Lachlan McKenzie, Federated Farmers Dairy chairperson.

“I know there will be some who will say 2.8 percent of Gross Domestic Product (GDP) doesn’t sound like much. But that’s actually 15 percent of New Zealand’s total GDP, created by those who make stuff and over a quarter of New Zealand’s physical exports.

“Exports are a bit like a snow ball. It may be small to begin with but as it rolls downhill, like through the domestic economy, it grows larger in size. And if you don’t export goods or services, you don’t have an economy.

“But I’m staggered to learn that our industry is such a large employer. We provide more jobs for New Zealanders than either the finance or accommodation sectors.

“I would really like to see this on the desks of all employees at Treasury, at the MED and in all of our councils.

“It’s very easy to headline a payout like $6.80 per kilogram of milksolids (kg/MS), but $5.10 of it pays directly for core farm expenses like fertiliser and even rates, not to mention interest and rent.

“Farmers are also paying some $0.25 kg/MS in taxation and that’s a pretty big chunk.

“It means the average dairy farming family lives off just $0.70 kg/MS, while $0.75 kg/MS, is all that is left, to repay debt or to make capital investment.

“I think this helps dispel the notion of dairy farmers being ‘fat cats’. Policy makers cannot snap their fingers and expect all their wishes to be delivered because we only have finite resources.

“Yet given the positive economic contribution we make nationally and locally, it would be nice if Government recognised this importance by advancing water storage as national infrastructure.

“It would also be nice if Government backed our value adding growth by giving one million rural Kiwis, the same broadband speeds as our city cousins look set to enjoy.

“It’s time to put the ‘back’ into backbone, because the report also shows that all New Zealanders are farmers - it’s only a question of degree,” Mr McKenzie concluded.


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