David Carter
National Party Agriculture Spokesman
11 March 2005

Loss of edge in cost of milk production alarming

The announcement from AgResearch that New Zealand has lost its competitive edge in the cost of milk production should set off alarm bells, says National's agriculture spokesman, David Carter.

Chief Executive of AgResearch, Dr Andy West, said earlier this week that New Zealand's production costs were almost twice that of Chile and Argentina.

"For a country that has prided itself on agriculture being the backbone of the economy, this is a worrying situation for New Zealand," says Mr Carter.

"With the re-regulation of ACC, increased petrol taxes and changes to the Holidays Act, all of which substantially increase costs, it is little wonder New Zealand's milk production costs are no longer competitive.

"Over the past five years, Labour has hammered the rural sector from all angles, with stupid ideas such as the 'fart tax'.

"Dairying is vitally important to the New Zealand economy and accounts for more than half of our farm exports.

"The repercussions not only for the industry, but the economy as a whole, could be serious.

"I would urge Labour to consider the cost structure it imposes on the primary production sector, or else a hard landing for our economy is a distinct possibility," says Mr Carter.

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