14th September 2006

Pedersen gives wrong message with race to the bottom

Minister of Agriculture, Jim Anderton, said that he was responding to statements in a speech by Federated Farmer's leader, Charlie Pedersen, more in sorrow than in anger. He said that Mr Pedersen's message of New Zealand producing and providing cheap primary industry goods would spell the end of high living standards for New Zealanders.

"Mr Pedersen talks about "reality not principles". I agree that we all need to 'get real' but what Charlie is proposing is that New Zealand joins developing nations in a race to the bottom," Jim Anderton said.

"The success of the primary sectors is absolutely critical to the success and wellbeing of all New Zealanders, indeed the economic survival of New Zealand. Every iPod, laptop computer or new car we buy is bought, to a large extent, off the back of exports from our primary industries.

"With such a dependence upon imported manufactured goods, we have to make the most of the things we do best, and concentrate our efforts where we have comparative advantages – farming, horticulture, forestry and fishing.

"I challenge Charlie Pedersen to give me examples of where New Zealand can beat low-cost producers of primary industry products. For example, we are no longer the world's lowest cost producer of milk. Argentina and Chile have this distinction. Brazil has recently become self sufficient in milk production. India and China are also building their milk production capacity. Latin American countries are also highly competitive producers of meat.

"New Zealand is a small country, a long way from any of our markets. No other developed country is as isolated or as export dependent on primary production industries. We're facing rising competition from lower cost producers, and technical barriers to trade. Where is Charlie Pedersen's vision and strategy to meet this challenge?

"Mr Pedersen seems to be hanging on to the past when bulk commodities were enough to get us through with a guaranteed UK market, but now we must look to the present internationally competitive reality and New Zealand's long-term future. Science, innovation, smart management and our unique brand in international markets is surely the kind of platform on which we can build our economic future.

"Our economic success will come from the growing global demand for high-value products in high value markets. More affluent and middle-class consumers are rapidly increasing in numbers across Asia and the market for higher-value superior quality goods is growing by the day. This is the opportunity New Zealand's primary producers must grasp. Why on earth would we want to throw all the good work done over decades away on a race to the bottom based on the cheapest prices," Jim Anderton said.

ENDS

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