After the lockdown, the economy’s recovery will be dependent on dairy farms and their milk

The planet is  in a state of   flux,   economies are tumbling into  recession, no-one (not even Donald Trump) can predict  when the agony will  end.

Suddenly, the streets  are  empty:  life  as  we have  known  it is  now  very  different. The  nation  is  in   lockdown.

As  the  London  “Economist” put it:

“The struggle  to  save  lives  and the  economy  is  likely to present  agonising choices…As  that  sends economies  reeling, desperate  governments are trying to tide over  companies and  by handing out millions of  dollars in  aid and loan guarantees. Nobody can be sure how these rescues  will work”.

Parliament, in  one of its  last  legislative  actions  before  it too went into lockdown,  passed  an  imprest  supply  bill   which,  as   Finance  Minister  Grant Robertson noted,  was not  “ordinary”.

“At $40bn of  operating expenditure and $12bn of capital, this is a large authority to spend. But the scale of the spending is the price that we have to pay. 

“It’s the price of making sure our public health system can operate and support New Zealanders.   It’s the price of people keeping their jobs and keeping their homes. It’s the price of cushioning the blow to businesses and of keeping them afloat, and it’s the price of making sure that the core of an economy exists that we can build on to recover in the way that New Zealanders want us to do”.

The  latest funding  tranche  comes on  top  of  more than $20bn of initiatives to cushion the blow of COVID-19 on Kiwis’ health, jobs, businesses, and the economy.

Robertson  sought  to  reassure   his listeners that  the government is providing  the  resources   the health services  need.

From the initial first addition of $500m to support the public health response to the COVID-19 outbreak,

“ … we are already seeing the impact of those resources in building up our public health units, in the arrival of emergency testing centres, in the initial intensive care capacity that we’ve grown, in the provision of equipment for hospitals, and in the support for GPs and primary care, along with significant additional video conferencing and telehealth consultations and the significant increase in capacity for Healthline”.

Robertson   warns, though,  that all of the support for hospitals and community providers to deal with the surge of patients and support for advice for people caring at home—all of it—is only the beginning when it comes to what  needs to  be done  to support the health service.

And when  he talks of  ensuring  “the core  of an economy”   continues to  exist,   he is   underlining    the  kind of  mountain the  country  will have to climb   once the  Covid-19  pandemic  ends.

Some  authorities  think  NZ  will return to  normal  quickly  and  easily   if  the  government   succeeds   with  its  lockdown.  Others  think before it is over   unemployment  could have climbed  to  15%  or more of  the workforce.

Many  of  the  businesses  in the tourism and  hospitality industries  may  not survive.

Even  while  the  crisis  deepens   there   are  industries   which  are proving   how  vital  they  are  as pillars  of  the economy.

This week  trade  data for February  showed  a  4.5%   ($212m) increase  in the total value of  goods  exported  in February  compared with the same month last year.  Dairy  products, particularly  milk powder,  at  $4.9bn,  led the  increase.   Statistics  NZ  also  said  that in  the week ending last  Wednesday  exports  rose 3.7%   while  imports fell 11%.

So   when  the   time   comes — and let’s  hope it is soon — for the   government to  start  planning  how the  economy   can recover,   it  should be   working hard   to ensure  the  dairy  industry,  along with other  key  pillars of the  primary  sector,  gets  every encouragement to  increase   production.

The  volume  of criticism  dairy farmers  had to  absorb  because  of the methane  emissions of their herds  and  the dirtying of  rivers  and streams  (when   the dirtiest  waterways   are those  in  cities and   towns, or close to  them)  reached    absurd  levels and  affected  industry  morale.

Regional Economic Development Minister Shane  Jones (and good on him)  has called   for the freshwater  reforms proposed  by   Environment  Minister  David Parker to be  deferred.  He  says  it is  not  the time to  “hobble”    export-earning industries.

Proposals went out for consultation last year, returning in October and are currently before ministers for discussion.

Jones says with tourism effectively decommissioned by COVID-19, it  is not time to impose further regulation on NZ’s other major export earner.

Jones    would   score more points  in the regions  if he went into bat for a  resurrection  of  the  irrigation  schemes  canned   by  the   coalition government early in its term at the  insistence of the  Greens.

Those   irrigation  schemes  are  needed  more than  ever  if  the climate change  warriors  are  correct   in contending droughts will become  more  prevalent.

Their construction  will  provide   valuable  employment in  rural  regions  hard   hit   by the COVID-19  pandemic.

What   New Zealanders  will  have to  absorb   in the period the country  is  locked down  is  that  their standard  of  living  will be  permanently depressed  unless   those  vital  export   industries — dairy, meat, horticulture, fishing — are    given  every  encouragement  and  stimulus   to  expand   production  in the years to  come.

Dairy farmers   are  not the  enemy,  as  climate  change warriors  make  out.  They  could  be  our  saviour  in the years  to come.

Perhaps  the Finance  Minister, when he  does the   hard yards in planning  the   recovery  of the economy, will get to grips  with this basic  lesson from the crisis.