Today is something of a grey day in Auckland having rained all night, and today is Anzac Day. I watched the National Remembrance Ceremony via television from Wellington. As we remember, I remember particularly Grandad Carter, my mum’s dad, a survivor of Gallipoli. He must have seen terrible things but never talked about them.
Grandad came to New Zealand when he was 17 years of age with 17 shillings in his pocket. He did farm work and later with some dogs became something of an agricultural contractor. After the war Grandad did not carry on with farming, however many settlers in New Zealand did farm and of course many returned soldiers were given parcels of land to begin a farming career.
Agriculture became the foundation of our economy and remains so although from time to time, tourism does earn us a bit more. We have led the world and perhaps the greatest example of forward thinking and innovation is evidenced in our dairy industry. Many small milk processing plants were set up in rural communities becoming the centre often of that community around which the post office, school and other services were established.
In the cycle of life, various of the factories combined into bigger more productive collectives and the smaller rural factories closed down, either left to rot or perhaps become reincarnated in a much later life as homes, other businesses or community centres with small museums and galleries.
As those collectives grew, Fonterra was created to make New Zealand a major competitive force in the international economy. Some people seem to think it is a large, faceless overseas corporation (bear in mind many urban kids believe milk comes in plastic bottle from the supermarket). Unlike the other seven processors of milk here of which many have some off-shore ownership, Fonterra is a co-operative of 10,500 New Zealand dairy farmers.
In an odd mix of socialism and free market expectations of an earlier Government, legislation was introduced to allow the formation of Fonterra in 2001 to promote competition at the farm gate giving farmers the ability to choose who they supplied. The legislation also required Fonterra to sell half of its domestic business and then supply those competitors with 250 million litres of milk each year.
Whilst the expectation may have been that the competitors Fonterra were forced to sell milk to would supply the domestic market, surprise, surprise, most decided to target the more lucrative export markets. In the New Zealand Farmers Weekly, columnist Alan Emmerson began his Opinion, “The recent fiasco about the price of milk is, in a word, ridiculous. Ridiculous because presumably we live in a free market and, as politicians have told us for decades, ‘the market decides’. It seems the market only decides when it is politically expedient to do so.”
I think the ultimate irony in this silly matter was a page in the NZ Herald on March 16. The feature was headed ‘Stop kowtowing to unfair prices.’ Yet immediately below that another article headed, ‘Broader measures needed to kick-start economy.’ And how do we propose to do that? Interfere in the ability of New Zealand’s dairy industry to earn $10.4billion in exports! Without milk our economy would be struggling. As prices increase there is more money coming into New Zealand. The NZ Institute of Economic Research has calculated that for every $1 increase in dairy payout it is worth $270 in the pocket of each and every New Zealander.
And let’s not forget that whilst once upon a time NZ’s productivity rated highly amongst OECD countries now we don’t even rate on that productivity radar. Interesting however, that agriculture was one of the most productive industries in the country from 2006 to 2009 according to Statistics NZ. Labour productivity alone (the amount of goods and services produced per worker) increased over the three years.
Which, in a roundabout way, brings me back to Anzac Day. There have been calls for the day to be a holiday. I heard one commentator on the radio say we work hard and given the occasion it would be appropriate to declare the day a public holiday. Without doubt we do work hard. Apparently New Zealanders work the longest hours on average than those in just about every other country in the OECD.
We work the longest hours, we are the least productive, and we need to stimulate the economy. Is the answer another paid non productive holiday, and political interference in the operation of one of the most productive industries and significant contributors to our economy?
As a post script, we attended the Royal Easter Show which includes both the largest wine and art shows in the country. The Grand Champion Syrah was the Villa Maria Reserve Syrah 2009. Nautilus was the Champion Sparkling.
