Primary Industry’s outlook good
Federated Farmers believes the ‘2014 Situation and Outlook for Primary Industries’, released by the Ministry for Primary
Industries, shows a promising future for the New Zealand economy thanks to kiwi farmers.
“This report shows an increase of 16.3 percent in primary sector exports, to $37.7b on the previous year, which
translates to increased farmgate incomes of 22 percent and an increase in off farm spending of 11 percent,” says Bruce
Wills, Federated Farmers National President.
“These statistics remind us of the importance of exports to New Zealand, in particular the impact on farmgate incomes
and spending on farm inputs, which has a direct influence on rural and provincial economies.
“The star performers have been the dairy industry, leading with a 31 percent increase and the forestry industry,
following with a 14.5 percent increase. However, the lower dairy and forestry commodity prices forecast for 2014/15 will
see our exports dropping by 4.8 percent.
“With 2014/15 set to be more of a challenge, we need a business-friendly environment, with policies supportive of
agriculture rather than policies that will harm it. Farmers are set to pay a whopping $2.7 billion in bank interest over
the coming year as interest rates rise, so harmful policies like a carbon tax, resource rentals tax on water, and a
capital gains tax would only further cripple our productivity.
“The good news is that we had a bumper 2013/14 year and exports should resume their upward progress in the outward years
of 2017/18.
“The Reserve Bank’s increase in the OCR comes as no surprise but it does run the risk of underpinning the high exchange
rate and delaying its necessary correction to reflect the lower commodity prices. Farmers will be hoping the Reserve
Bank is right and that the exchange rate will in fact fall, but if it doesn’t then it might be time for a pause in the
OCR. Otherwise we could see a sharper reduction in exports and farmgate incomes,” concluded Mr Wills.
ends