High but­ter prices and farmer flow on

South Waikato News - - Rural Delivery - AN­DREW MCGIVEN

I have seen a lot of angst lately around the price of but­ter in New Zealand su­per­mar­kets. Peo­ple are writ­ing let­ters to the ed­i­tor to com­plain and protest about the record prices charged, with many as­sert­ing that be­cause it is made in New Zealand they should be sub­sidised to re­duce the cost. While I don’t visit su­per­mar­kets very of­ten, and when I do it’s a very quick de­tour, I think the cost of food in gen­eral is expensive. But I also think that this new pric­ing is go­ing to be the new nor­mal. With our food pro­duc­ers now be­ing sub­jected to ad­di­tional com­pli­ance costs around the en­vi­ron­ment, an­i­mal wel­fare and labour re­quire­ments, the costs of pro­duc­ing th­ese es­sen­tial food cat­e­gory items has in­creased sub­stan­tially.

New Zealand is no longer a pro­ducer of cheap food and I think the price pre­mium that the ev­ery­day con­sumers pay for th­ese prod­ucts needs to be re­flec­tive of the hard work, re­search and de­vel­op­ment and com­pli­ance prac­tices that farm­ers and pro­duc­ers are now im­ple­ment­ing. Farm­ers are re­quired to meet th­ese stan­dards to guar­an­tee ex­port mar­ket ac­cess to cer­tain coun­tries and con­tinue to earn the lion’s share of the na­tion’s over­seas earn­ings.

Kiwi con­sumers need to un­der­stand that they will also have to pay sim­i­lar pre­mi­ums. Farms and pro­ces­sors are busi­nesses and it doesn’t make eco­nomic sense to sell prod­ucts here at a lower price.

The de­bate will rage about why it can some­times be cheaper to buy the likes of French but­ter or South Amer­i­can beef in New Zealand.

That may be the case, but please un­der­stand that th­ese coun­tries sub­stan­tially sub­sidise their agri­cul­tural in­dus­tries and there is no guar­an­tee as to what their pro­duc­tion stan­dards are. New Zealand’s food safety and se­cu­rity record is sec­ond to none in a global con­text. If you reckon the farm­ers are cream­ing it, think again.

The av­er­age dairy farmer is still re­ceiv­ing about 30 cents per litre of milk sup­plied to the pro­ces­sor, and I am guess­ing this sub­stan­tially-lower-than-re­tail price will be much the same across the pri­mary in­dus­tries.

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