People have asked me what those interested in regional economic growth and investment think of Government’s policies
related to water quality and reducing ruminant greenhouse gas emissions. Crudely and entirely my own words, the question
is should landowners support a DairyNZ apparent appeasement approach or Groundswell’s more outright rejection of the
imposition of unworkable regulation or in the case of Government, regulatory dictates along with policies on climate, to
tax food production. (ETS)
The fundamental problem as I see it stems from the conflict between worthy but costly public interests and where those
costs should rightfully sit.
NZ (more accurately politicians on our behalf) has signed up to a range of environmental goals including climate change,
biodiversity enhancement and water quality improvement. The international and domestic constituencies for those public
interest outcomes can and have rightly or wrongly, pointed to evidence of environmental decline in support of change.
The fact that the changes being demanded offers international commercial and domestic recreational benefits is not often
commented on but is evidenced by the increasing use of environment-related trade restrictions and urban NGO support for
regulation of rural communities.
In an international context NZ is a small country dependent on trade for its standard of living. We have to accept the
reality that trade and other international agreements are not always fair and often manipulated.
Those countries and markets applying high environmental standards on NZ exports remain attractive because they are also
higher value. The decision for NZ is whether the costs being imposed are worth the price received. That complex
algorithm is made more so by the fact that little is static in global politics and therefore a risk in limiting our
options to those without environmental standards and a fixation on price. NZ was dependent on the UK market till that
was shut by their entry to the EU. NZ is now highly dependent on China, a dependence that recent world events have
brought into sharp focus. In a cyclical and ever changing market it’s possible to get ‘top price’ sometimes and
impossible to sustain top price all the time.
In blunt terms, the cost of meeting customers’ expectations (environmental as well as all others) should sit with
producers. It is for producers to decide whether to supply and at what price. However in todays fractured World, the
ability to efficiently produce food is an increasing priority. Applying taxes to limit production appears
counterproductive.
While we are all ‘policy takers’, with political management we don’t need to take all policies. Yes, climate change
policies are important but how many would forgo all investment in health and education to achieve them. Yes, enhanced
biodiversity is important, but how much would an urban-funded environmental group be able to raise from their membership
to pay for it? A $25 subscription to fund an Environment Court appeal that imposes biodiversity costs on someone else is
a much more saleable proposition than continually raising funds to buy the same amount of biodiversity ‘protection’ in
perpetuity.
So who is right, DairyNZ or Groundswell or the Government? For me, the answer is, deciding what we as producers and
exporters are going to have to do to meet market requirements while maintaining the ability (profitability) to do so.
Use that as a benchmark to determine what is unreasonable or excessive or driven by minority political interests.
Exporters have a role in identifying the reasonable international benchmarks that NZ producers need to achieve to
maintain access to a reasonable spread of higher value markets. They are logically motivated to limit those benchmarks
to a level that producers can actually afford to meet by the fact that they need something to sell. This is similar to
New Zealand as a whole who need export income to enable the purchase of the many imported goods we continue to pay
homage to.
Thus our Sector Representatives along with Groundswell have a role in confronting the minority within the majority that
lack the broad understanding of NZ’s place in the world or are only motivated by self-interest. They need to approach
their role with the confidence that most people will understand ‘the reasonable’ position is the affordable one. The
leadership should aim for mainstream political understanding of where the fair and reasonable balance rests and make
balanced policies a platform for political success!