Latest news with #JacquelineRowarth
NZ Herald
5 days ago
- Business
- NZ Herald
Dairy exports vital for NZ economy despite butter price concerns: Dr Jacqueline Rowarth
The same might well apply to your house. Downsizing parents have been known to assist their children into the family home while choosing somewhere less expensive for themselves. But if an outlander said they would give you twice the money of the valuation of your home, would you then accept it in the knowledge your children would ultimately be better off? There could be $1 million extra to spend on whatever you and they need, want or desire – a different house and a car, holiday or whatever. This is the philosophy behind Fonterra's approach to selling products from the dairy industry. A considerable amount of time and energy is spent marketing and positioning to achieve the best price possible for the product. The money keeps people in employment, funds repairs, maintenance and infrastructure development, and also funds research into new products. The bulk of the export income goes to the dairy farmers so that they, too, can employ people and create vibrant businesses, while also funding farm research through their levy contribution to industry good bodies such as DairyNZ and Beef + Lamb NZ. The income streams give everybody more choice, including the Government through tax-take investment. Every dairy dollar created by New Zealand cows and sold offshore generates over seven times the value in New Zealand and increases employment by over eight Full Time Equivalent positions. The $27 billion in export dollars is $5400 for every New Zealander, which multiplied by seven is almost $40,000. That is just for dairy. It is a lot of packs of butter, or cheese, and certainly litres of milk. The Government's concept of doubling the value of exports underpins its desire (and New Zealand's need) for improved health, education and infrastructure, as well as police, environment, and every other group important to New Zealand's functioning as a developed nation. Prices come down when supply exceeds demand, writes Dr Jacqueline Rowarth. If the export income increases, New Zealanders are better off. Despite this, there has been yet another outcry over the price of butter, with statements that it should be cheaper because New Zealand produces so much of it. Prices come down when supply exceeds demand, or if the product is being used as a loss leader by the seller. Vegetables and fruit tend to be cheaper in peak harvest season because supply is plentiful. The Food Price Index shows increases during winter and drought (and in the aftermath of cyclones). There is no glut in dairy products – they are in demand. Loss leaders are a different issue. They are an inducement to customers to enter a store to purchase the product at a price which might be below market cost. The goal is to stimulate sales of other, more profitable goods or services. The store accepts the 'loss' on the chosen product on the basis that it will make more money on sales overall, as customers are led into the shop… Inevitably, this leads to a discussion on supermarkets and whether the current structure allows sufficient choice for New Zealand customers. Supermarkets have borne the brunt of complaints about rising food prices (overlooking the impact of an increase in wages, power, rates and compliance costs, and the fact about 40% of food is imported). An article published last year showed each New Zealand supermarket was generating over 40% more revenue than US supermarkets. But each New Zealand supermarket was also serving more people. The article suggested having more competition between supermarket companies would reduce the revenue (implication - profit - which is not necessarily the case) for each supermarket. What was not apparent was that by serving more people, the New Zealand supermarkets were offering a service for less than that being charged in other countries. From the data, it appeared that in the UK and Australia, the revenue per person was 40% and 23%, respectively, higher than in New Zealand. When comparing prices here with those overseas, the role of GST, which adds 15% to the purchase price, is often overlooked. Further, unlike farmers elsewhere, New Zealand farmers do not receive Government support (taxpayer money). In many cases in the northern hemisphere, the support is what keeps the business solvent while ensuring domestic food security and a managed landscape. Discussing butter prices, Gareth Kiernan, chief forecaster at Infometrics, has explained that the alternatives are subsidies (which have to be paid for with tax) or regulation. There is a cost to both, resulting in inefficiencies. Next time you need butter (or cheese, or milk or any food), thank a farmer for being the bedrock of the economy. The current Government is grateful; we can be, too.
NZ Herald
09-06-2025
- Science
- NZ Herald
Fieldays boost farmer innovation despite science reorganisation: Dr Jacqueline Rowarth
Sheep, also flightless, are decreasing 'thanks' to Emissions Trading Scheme (ETS) settings favouring pine trees, but also reflecting changes in markets. The field days, at least in the case of the National Fieldays held at Mystery Creek in June (except during the Covid disruptions), go from strength to strength, despite the fog that is common in June in Waikato. The point about field days, whether national, local or on-farm, is that they allow farmer-to-farmer exchange of information, as well as farmer-to-researcher, rural professionals, policymakers and interested urban-dwellers. They also allow researchers, rural professionals and policymakers to interact with each other – and the people who have left the big cities to embrace whatever the field days have on offer. Field days are, to quote an advertisement for a popular car, a real charcuterie of activity and people. It is the charcuterie that stimulates innovation – new thinking about a problem, challenge or issue. Farmers might be there to gather information and kick a few tyres of potential replacement tractors, but the value of the conversation is often to the person listening. Scientists, researchers and developers frequently get their ideas from farmers, saying that they've met a problem or explaining how they overcame that problem. This stimulates the scientist to think about how the problem might be solved or how the solution might be tested more widely. And then they do the research. At least, that is how it has worked in the past. The reorganisations in the science sector won't stop the ideas, but how the 'action' will follow has yet to be decided. Dr Shane Reti, the Minister for Science, Innovation and Technology (coincidentally a good description of what can be seen at National Fieldays), and also the Minister for Universities, inherited the reorganisation in the Cabinet reshuffle at the beginning of the year. Dr Jacqueline Rowarth says farmer innovation defines New Zealand. Reti is clear that the reorganisation aligns with the Government's priorities of driving economic growth and will allow the new organisations to be 'in a better position to deliver excellent science'. 'It will also make sure they're adopting more collaborative ways of working with universities and seeking partnerships with private sector investors, sooner,' he says. The focus is on generating money and it is hardly surprising that the new Science Advisory Panel, chaired by the Prime Minister's new chief science advisor, Dr John Roche, has members with a track record of investment, as well as engineering and science. Comments have been made about the apparent predominance of dairy, but it is the track record of achievement behind current roles that should be examined. Further, New Zealand should be reassured that people who have an interest in the greatest revenue-earning sector are involved in the future of investment. The big question remains whether the investment will be enough to stimulate what is needed. The budget-shuffling indicated an emphasis on commercially viable science, but the quantum of investment is still below what has been urged repeatedly by the science sector. Reti has said: 'Clear direction for the science, innovation and technology sector will give the public and private sector confidence to forge ahead with critical research that will help grow our economy.' This suggests that co-investment is expected from companies and from the levy bodies that support the different sectors in primary production. This is not a new plan. 'User-pays' dominated the thinking in the creation of the Crown Research Institutes (CRIs) in 1992. This was when most of the government funding became contestable. Unintended consequences included bidding for safe science (outcome known) and reduced collaboration (explained in Dr Doug Edmeades' paper Is the Commercial Model Appropriate for Science?). To encourage collaboration, the National Science Challenges (NSCs, 2014-2024) 'brought together the country's top scientists to work collaboratively across disciplines, institutions and borders to achieve their objectives'. Getting going, however, took longer than anticipated because of the cross-party negotiations that had to occur before the collaboration could start. Reti's statement on collaboration for the new system is important. The lessons from the CRIs and the NSCs are the foundation for a better future and, knowing the focus is the primary sector, the National Fieldays are a great place to start talking with the farmers. Along with clouds, kiwi, sheep and, more recently, cows, it is farmer innovation that defines New Zealand, allowing the country to have a first-world economy on the basis of agricultural exports. That is an extraordinary achievement. Whether the future continues in the same vein will depend upon how the science reorganisation plays out and the talks that are held with the primary sector. Farmers continue to be the key.
