Farmers Blame High Dollar For Falling Confidence

15 October 2012

Farmers Blame High Dollar For Falling Confidence

The high dollar is causing farmers to lose confidence as the National Government refuses to respond to other countries’ polices that are driving our exchange rate up, Greens Co-leader Dr Russel Norman said today.

Rabobank’s Rural Confidence Survey release today shows that 44% of farmers expect conditions to worsen in the coming year. Half of farmers who expect conditions to worsen blame the high dollar and falling commodity prices.

The ANZ Commodity Price Index shows that, despite the World Price Index for New Zealand commodity exports increasing by 12% in the past four years, the New Zealand Dollar price has fallen by 11% because of the rising exchange rate.

“The high dollar is hurting farmers, just as it is hurting manufacturing and tourism. The Government must act,” said Dr Norman.

“Over the last four years, farmers’ returns from exports have fallen. Rising international prices have been wiped out by the over-valued dollar.

“Despite international prices for our commodity exports increasing by 12% in the past four years, returns to farmers in New Zealand Dollars have fallen by 11% because of the high exchange rate.

“Our trading partners are using modern monetary policy to lower their currencies and drive ours up to protect their economies. The result is that our exports earn less and our local businesses get undercut by imports. It is indefensible for National to stand by and do nothing.

"The Greens have proposed a suite of measures to put downward pressure on the New Zealand dollar that includes lowering interest rates, introducing new tools to stop housing bubbles, and quantitative easing.

"Together, these policies would save jobs, give our farmers, manufacturers, and tourism operators a fighting chance, reduce the amount we borrow from overseas, and get New Zealand's natural disaster safety net back in place," said Dr Norman.

Additional Information:
ANZ Commodity Price Index
The Green Party proposal for lowering the high Kiwi dollar

ENDS

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