Hon Jim Anderton

Opposition spokesman on Agriculture
Progressive Party leader
MP for Wigram

20 January 2009 Media Statement

European Union protectionism to be deplored

The European Union’s moves to re-introduce dairy export subsidies make it even more necessary to successfully complete the Doha world trade round, Opposition agriculture spokesman Jim Anderton said today.

He said this should be the Government’s highest priority, because export subsidies had such a pernicious effect, not only on New Zealand’s trade, but on the wellbeing of poor developing nations globally as well. They could only be tackled at the World Trade Organisation level, not at a bilateral trade level.

“The European Union spends a huge amount on aid, but the benefits of more open trade would be more significant than that aid for developing nations. It would also help tackle the causes of poverty.”

Jim Anderton said subsidies of either exports or production caused distortions that boosted over-production, and lowered prices. They also directed money to large agricultural corporates, rather than farming families, and damaged the viability of farming businesses, and.

“When 50% of a farmer’s income comes from Government subsidies, 50% of his or her effort is likely to go into “earning” those subsidies. The effort goes into filling in forms, meeting government-imposed bureaucratic criteria, keeping on top of the rules. That leaves only 50% of the effort for farming.

“In New Zealand when government subsidisation was removed, we found that farmers reverted to putting 100% effort into their farming activities. 100% devoted to what farmers do best - farming. The percentage contribution of agriculture to our economy increased significantly.

“No wonder New Zealand is an efficient agricultural producer. No wonder innovation thrives in the sector. Farmers are milking cows, instead of milking subsidies.”

ENDS

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