Allan Barber sees severe UK meat and dairy issues looming due to Brexit that will hurt New Zealand. He says they should give our new political leaders reasons to be cautious about placing restriction on our ability to trade

Allan Barber sees severe UK meat and dairy issues looming due to Brexit that will hurt New Zealand. He says they should give our new political leaders reasons to be cautious about placing restriction on our ability to trade

By Allan Barber

An Agri Brigade piece in the latest Private Eye, that marvellous example of good old-fashioned investigative journalism, made me acutely aware of the law of unintended consequences that inevitably applies to trade agreements.

With less than 18 months until Brexit, UK negotiators don’t appear to have made any tangible progress towards a workable agreement with their EU counterparts.

In fact each side is talking right past the other: the EU wants to set the amount the UK will pay to exit before discussing important things like trade and the UK doesn’t want to mention it for fear of causing political mayhem at home. And we think we’ve got problems with the coalition discussions which should have reached a conclusion by the time you read this.

Private Eye draws attention to imminent decisions to be made by UK farmers which will be dramatically affected by the lack of transitional arrangements or a trade deal. At least one of these will also have a significant impact on the New Zealand red meat sector. UK sheep farmers are faced right now with deciding whether to keep millions of ewe lambs for breeding or to send them for slaughter; if they keep them for breeding they won’t lamb until spring 2019, just when Britain is leaving the EU, with or without an arrangement.

40% of all UK lamb production is exported to the EU which without a trade agreement will incur a tariff of £2,689 per tonne, roughly equivalent to $125 per lamb by my calculation, and as a result the UK lamb price will collapse. I don’t imagine the price would react very well either, if the ewe lambs are sent for slaughter. This information coincides with the news about the proposed arrangement for the EU and UK to split New Zealand’s sheep meat quota on the basis of the last three years’ percentage to each market.

Not unnaturally B+LNZ and Meat Industry Association are most unhappy with this proposal which contravenes the tariff rate quota’s legal status under WTO rules, because it would remove New Zealand’s flexibility to switch product between all current EU members including the UK. Realistically the worst case scenario would see the UK flooded by cheap domestic lamb which New Zealand exporters would not wish to compete with, but would be unable to send surplus product to the EU above the reduced allocation. The UK quota would remain unused, unless by some freak of fate a trade deal can be reached before the deadline.

Other difficult decisions with similar or even longer implications face British beef and arable farmers whose production won’t be sold until after the March 2019 exit date. A specific example of this problem is the export of organic Kingdom Cheddar cheese to the USA under US-EU trade agreements. It took the Organic Milk Suppliers Cooperative eight years to build up supply from accredited organic farmers and develop the brand, but now says it will cease production of this niche product at the end of December because its 18 month production cycle means it may not be able to sell it after Brexit.

Although British beef, arable and dairy marketing problems may not have a direct impact on New Zealand’s exports, they will inevitably cause disruption of global supply and pricing patterns which will almost certainly end up affecting our markets. For this reason New Zealand’s trade relationships must be carefully nurtured to ensure our exporters enjoy the best possible access to overseas markets.

This is my main concern with the outcome of our general election, because whichever combination ends up in power will be under the influence of NZ First, a party whose attitude to free trade goes back to before 1984. More misgivings arise from Labour’s belief it can renegotiate TPP11 without delaying the whole agreement indefinitely because a change in New Zealand’s commitment will give other signatories the perfect opportunity to introduce their own wish lists to the exercise. Now is not the time to take the pressure off diplomatic efforts to secure the best and widest range of trade agreements.

NZ First’s well publicised objections to foreign investment in our productive value chains also signal the possibility of the establishment of a fortress New Zealand mentality which would sit very uncomfortably with a National led government. I am not averse to looking at the provisions of the Overseas Investment Act to ensure we are not losing ownership or control of strategic assets, but joint ventures or partnerships with carefully chosen overseas businesses bring the best of both worlds: capital and access to an international value chain combined with New Zealand’s innovative and productive capabilities.

Silver Fern Farms, Synlait and T&G Global (formerly Turners & Growers) are three agriculturally based companies with significant overseas shareholders which have brought stability and value to the New Zealand business. It would be a backward step if such constructive relationships were to be banned under the new government. Britain’s difficulties as a consequence of Brexit should give our politicians reason to be cautious about placing any undue restriction on our ability to trade


This article was first published in Farmers Weekly and is here with permission.

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Interesting. The author worries about NZF too much because (a) they do not have much power because of the vote (b) they are biased towards the NZ farming community not against so are bound to listen to reason.

Better than the Nationals who were quite happy to sell the family jewels with a give me the dollar now and forget the future attitude.

Lapun Agree a blind dog could’ve achieved more than this past NatNil govt
Thankfully Labour ,Greens, NF1st will change the paradigm

Interestingly that from an international perspective the NZ economy is seen as a model to emulate.

Remember they had to deal with a GFC, Pike River, Two Canterbury earthquakes with highest damage as a % of GDP ever, Rena and Kaikoura earthquake.

The GFC was so serious the ECB is still printing money under the guise of QE nearly 10 years later.

They were dealt very bad hands over their 9 years - we have to recognise this.

Not perfect but ranked very high internationally.

Haul in lots of immigrants, sell off the family silver, and snip, snip, chop, chop the budgets of essential services, yup great management that, the real heroes are those who have had to stretch ever reducing budgets to snapping point.

Name one essential service with a lesser budget than 9 years ago !

Health and Education have seen very significant increases over this period as have welfare payments.

Less per head of population.
Auckland Hospitals are drowning with recent arrivals who are demanding free this and free that. After 20-30k of free surgery, many don't want to go home as the family are out of the country. Want free board for a few weeks and then a free trip in a taxi on discharge.

Overall $ budget up, per capita $ budget down, down, down.

Pockets the election is over so you can stop bullshitting. Doctor and nurse numbers are up per capita compared to 2008. NZ population has increased by about 8% since 2008.

"As of 31 March 2017, there were almost 8,200 doctor full-time-equivalents and nearly 23,000 nurse full-time equivalents employed by DHBs – that’s over 2,250 more doctors and over 4,640 more nurses compared to 2008.

In total the number of doctors and nurses working in DHBs across the country has increased by over 6,900 since 2008 – an increase of over 28 per cent.

This includes over 1,220 more senior doctors, an increase of almost 45 per cent, and over 1,210 more senior nurses, an increase of over 45 per cent."

Bit of a partisan myth there. I am well aware people believe it to be true, but it just isn't.

The data is freely available. Look here for a useful summary of the spending levels: https://www.interest.co.nz/news/87913/budget-2017-summary-all-spending-plans

And look here for the population data.

That shows in the years 2014 to 2017 (June years),

- Education spending has risen by +$1.7 bln
- Health spending has risen by +$4.3 bln
- Social Welfare spending is up by +$3.2 bln.

On a per capita basis, that is:

- Education spending has risen by +$203
- Health spending has risen by +$701
- Social Welfare spending is up by +$371

and on a %-per-year per capita basis, that is:

- Education spending has risen by +2.4%
- Health spending has risen by +7.3%
- Social Welfare spending is up by +2.5%

which in each case is higher than the level of inflation.

Health, Education, and Welfare spending rose faster than both population growth, and inflation, over the period 2014 to 2017. By any measue those are "real", per capita rises. Hence why the claim is incorrect. You can argue that this was not enough, but the claim this spending went "down, down, down" is wrong. (I have the data for each of the years, so the claim for each specific year is wrong too.)

Tks David, succinct! Guess the old one about not letting the truth stand in the way of a good story is applicable here, and as you have exposed rather nicely.

Good stuff David. Can you forward to red radio and John Campbell? They are under the impression NZ is now a third world country.

What you have done David is compare an absolute & quantifiable value with an artificially calculated one. Compare those budget increases to the increase in the money supply to be accurate and fair.

Spin it any way you want Scarfie - there were more doctors and nurses under the last government than under that caring, caring, so caring Helen Clark. Absolute and per capita - not “artificial”.

But did the increases account for the masses of migrants brought into NZ by National's slack oversight.

...per capita. NZ population has increased by about ~8% since 2008. Oh for the days when people were leaving in droves to Oz.

"As of 31 March 2017, there were almost 8,200 doctor full-time-equivalents and nearly 23,000 nurse full-time equivalents employed by DHBs – that’s over 2,250 more doctors and over 4,640 more nurses compared to 2008.

In total the number of doctors and nurses working in DHBs across the country has increased by over 6,900 since 2008 – an increase of over 28 per cent.

This includes over 1,220 more senior doctors, an increase of almost 45 per cent, and over 1,210 more senior nurses, an increase of over 45 per cent."

Ah ha! Fake news!

Oh and on the welfare, the whole lot for the few that have managed to receive the whole increase, has been well and truly swallowed up in rising costs, mostly housing.

"Name one essential service with a lesser budget than 9 years ago !"

Ummmm RNZ. Maybe not what you would consider essential but, for me, one of the few tenuous links to sanity I have left.

Looking ever more likely that Brexit won't actually happen now that the madness is being exposed for what it is.

Issues such as this well researched article just highlights the looming disasters everywhere you look.

You just simply cannot undo over 40 years of cumulative agreements which one assumes delivered benefits at the time of signing in a few months.

The EU is destined to fail. A number of other countries within the EU are growing increasingly dissatisfied with Brussels and are becoming increasingly and understandably euro-sceptic. The question is, do you want to be part of it when it collapses or standing safely to one side. It won't be easy, but I think the citizens of the UK have made the right choice, they just need some capable politicians to make it happen.

EU is over producing in Ag, the UK imports a big chunk of its food, it's only able to supply %54 of its food nearly %30 is imported from other EU countries.So why would the EU want to restrict its exports to the UK?

Countries like Poland are starting to produce a lot of food, Poland has %10 ofEU SMP stocks.

https://www.farmersweekly.co.za/crops/field-crops/farming-in-poland-euro...

The EU is a bloated bureaucracy . The PIGS still have massive debt problems, high unemployment and low growth.

Look at Nato's new headquarters

https://www.nato.int/cps/ic/natohq/topics_49287.htm

AndrewAndrew
You think Brexit will be good for UK ? Really that is garbage
Yes the EU is bloated but it’s the results that count and the UK is far and away better off as part of the EU,
The UK with a mere 60 mill pop is puny Watch as it loses its big financial headquarters
I see a large Swiss bank already planning to move
Globalism is Good and Nationalism is for fools and suckers manipulated by straw men Where was leadership after the Brexit vote ? The instigators All wouldn’t lead !

To many people in the UK/EU are not feeling the love.

How did the Swiss create a large bank with only a very puny 8 mill pop and outside the EU?

By being very on to it.
And ensuring the connections are all in place.

And initially being able to provide secret accounts for tax evaders.

By being neutral....

".."neutralist policy" is a foreign policy position wherein a state intends to remain neutral in future wars..."

https://en.wikipedia.org/wiki/Neutral_country

EU doesn't need NZ meat. They are virtually self sufficient & if they ever untangled all the subsidy thingys & got their economics, performance & quality issues sorted, they would be much more than that. NZ does very well with consistent, safe, high quality meat, particularly venison but sad to say, the only parties who really want or need NZ meat on board, are those who can still make money out of it in the trade.