Here’s hoping Damien O’Connor can strike a trade deal with the UK on terms similar to those secured by the Aussies

We have had the chance to scan the new Australia-United Kingdom Free Trade agreement and – if Trade Minister Damien O’Connor can negotiate similar terms for us – the prospects look hearteningly good for NZ.

Beef and sheep meat tariffs on Australian exports to the UK will be eliminated after 10 years. Sugar tariffs will be removed after eight years, and dairy tariffs after five years.

Short and medium grain milled rice will get immediate duty-free access once the FTA is in place.

During the countdown to tariff-free trade, Australian producers will gain incremental access to the British market.  Beef producers gain immediate access to a duty-free quota of 35,000 tonnes (rising to 110,000 tonnes a  year in a decade).  With sugar exports, producers have immediate access to a duty-free quota of 80,000 tonnes, rising by 20,000 tonnes each year.

Dairy farmers will also have access during the transition period to a duty-free quota for cheese of 24,000 tonnes. This will rise to 48,000 tonnes by year five. Continue reading “Here’s hoping Damien O’Connor can strike a trade deal with the UK on terms similar to those secured by the Aussies”

Let’s wish O’Connor well, as he dines with UK Minister in quest to secure a free trade deal – but Aussies are higher in the queue

Trade minister Damien O’Connor dines with his UK counterpart Liz Truss tomorrow  to begin the heavy-lifting on a NZ-UK free trade agreement.

The early signs are ominous.  Ozzie PM Scott Morrison managed to attend part of the G7 meeting in Cornwell where Australia’s FTA agreement was raised with the UK’s Boris Johnson.

Morrison says he’s waiting for ‘the right deal’ before the UK-Australia free trade agreement (FTA) is finalised, and the UK is eager to launch its post-Brexit economy by securing free trade agreements covering 80% of its trade within the next three years.

The UK Department for International Trade believes a trade deal could secure an additional £900 million ($1.6 billion) in exports to Australia.

In 2019-20, two-way goods and services trade was valued at $36.7 billion, making the UK Australia’s fifth-largest trading partner, according to the Department of Foreign Affairs and Trade.

Morrison hopes to finalise the FTA tomorrow if certain issues can be dealt with.

But elements of the Australian FTA have created alarm within the UK. The National Farmers’ Union publicly begged for tariffs to remain on Australian beef and sheep.

NFU president Minette Batters says a tariff-free trade deal with Australia will jeopardise UK farming and could cause the demise of many, many beef and sheep farms throughout the UK.

There are several challenges for NZ.  It’s just as well, therefore, that O’Connor is accompanied by NZ trade supremo Vangelis Vitaly, a recognised world authority on trade policy.  Continue reading “Let’s wish O’Connor well, as he dines with UK Minister in quest to secure a free trade deal – but Aussies are higher in the queue”

Budget pumps $1.3bn into railways but almost forgets farmers while Fonterra delivers the economy-boosting goods

Farmers    who  believed   Labour  when it  said  it wanted  to  double  agricultural  exports may have experienced  a  sense  of  disillusion as  they  absorbed the  messages  of  Budget 2021.  While  the  government  is  allocating $1.3bn to modernise rail infrastructure and  build locos  and  wagons in Dunedin,  it  could find  only  $62m  for  agriculture.

Someone  has  calculated  that  the country’s 40,000 farm businesses, if they shared the $62m, would each receive $1550 or $29 a week (less than the ongoing minimum benefit increase).

This  comparatively meagre  sum   is  to be  applied as  follows:

  • $37m towards a national integrated farm planning system for farmers and growers.
  • $24m towards agricultural greenhouse gas mitigation research and development.
  • $900,000 to collect vital statistics on agricultural production, such as greenhouse gas emissions.

Critics may  conclude   the small outlay for agriculture reflects Agriculture Minister Damien  O’Connor’s influence in Cabinet.  Others  may  see it as  evidence  of the traditional antipathy of Labour MPs  towards  farmers. Continue reading “Budget pumps $1.3bn into railways but almost forgets farmers while Fonterra delivers the economy-boosting goods”

O’Connor opts for a ban on exports of live beasts (rather than tighter regulations) to demonstrate our high animal-welfare standards

Commodities are leading the global economic recovery. International demand for grains, dairy and forestry products is extremely strong – driven primarily by increased demand from China, ANZ Bank  economists say in their latest NZ Agri Focus.

Dairy markets shot up in March, driven by strong buying from China, among challenging conditions to deliver product to market. Since then prices have stabilised near current levels, encouragingly, despite more product being added to the GlobalDairyTrade sales channel.

The recent strength in global markets, combined with a slight softening in the NZ dollar. has been supportive of farmgate milk prices.

“We are forecasting $7.70/kg MS for this season and $7.30/kg MS for next season,”  the  report  says.

If cumulatively it has been a remarkably good  season  for the  dairy  industry, results  have   been more  varied for  the processing companies and  for  individual  farmers.

Synlait and A2 Milk, for example, have not found the going easy,  given  the  impact  of  Covid-19  on the  daigou  trade  with  China.

But Fonterra – as the  principal  player – has  got  back its  mojo    as  industry  leader, with its  finances  in  much  better  shape  under  CEO Miles  Hurrell’s  leadership   than  under  the  previous  regime. Continue reading “O’Connor opts for a ban on exports of live beasts (rather than tighter regulations) to demonstrate our high animal-welfare standards”

Good news for horticulture: govt is ploughing $8m into research to develop leaf protein concentrate

Damien  O’Connor, the  minister  who earlier this year distinguished himself   by  telling  the Australian  government to  show  more “respect” in its  dealings  with  China, has  at  last won a  battle in  Cabinet. He  got  his  colleagues,  some of  whom are always reluctant to do  anything to help the country’s primary industries and  farmers, to  agree  to  support a new programme to lead New Zealand’s plant protein sector development.

The government is partnering with Lincoln-based  Leaft Foods on a $20m research and development programme that could put NZ on the map as a leading leaf protein concentrate producer.

Through its Sustainable Food & Fibre Futures fund, the Ministry for Primary Industries is contributing $8m to the five-year programme to develop technology that extracts edible protein from NZ grown green leafy crops.

Leaft Foods’ technology will be used to produce high-quality protein in the form of gels or powders that can be used in a range of foods in the fast-growing global market for plant proteins. Continue reading “Good news for horticulture: govt is ploughing $8m into research to develop leaf protein concentrate”

Biosecurity Minister shows signs of a foot-in-mouth affliction – it doesn’t require culling but will he be put out to pasture?

According to his critics, Damien O’Connor may well have contracted a nasty dose of foot-in-mouth disease.

Whether his personal struggle with the condition is good or bad for a bloke who happens to be our Minister of Biosecurity is arguable.  The portfolio requires the Minister and his ministry to ensure against foot-and-mouth disease sneaking into the country (among a formidable list of threatening pests and diseases).

Foot-and-mouth is much more virulent than foot-in-mouth and an outbreak on our farms would be calamitous for the economy.

Foot-in-mouth, on the other hand, is common among politicians and tends to be more damaging to the afflicted politician and his/her party than to the national economy.

Accordingly, when it is detected, the authorities do not declare an emergency and immediately put down the politician and cull every other beast within a certain distance, as would happen with livestock, although a polls-sensitive PM might be tempted to demote the culprit and put him or her out to pasture on the back benches.

Mind you, a politician might be accused by Opposition politicians or media commentators of having foot-in-mouth disease when others think the accused politician’s remarks were eminently sensible.

Damien O’Connor found himself embroiled in a trans-Tasman brouhaha when he suggested Australia could improve its relationship with China by following this country’s lead and showing more respect to the Asian powerhouse. Continue reading “Biosecurity Minister shows signs of a foot-in-mouth affliction – it doesn’t require culling but will he be put out to pasture?”

O’Connor phones to mollify the Aussies after trumpeting the pay-off from mollifying Beijing

Trade  Minister Damien  O’Connor  trumpeted  this week that the  New Zealand  and  Chinese  governments had signed  an upgrade to  the free trade agreement  between the  two countries.

We suspect he will be more coy about his contribution to the New Zealand–Australia relationship because his trumpeting – loud enough to cross the Tasman – included advice to Canberra to “show respect” and act more diplomatically towards China.   

The Aussies have been riled by those remarks, according to the Sydney Morning Herald:

Senior Australian government officials are infuriated at Mr O’Connor’s comments, which they see as a continuing pattern of New Zealand not joining other allies in standing up to China’s growing assertiveness in recent months.

China’s relations with Canberra remain frozen as a consequence of the Morrison government’s call for a Covid-19 inquiry and a series of punitive trade actions has been taken against Australian export sectors. Continue reading “O’Connor phones to mollify the Aussies after trumpeting the pay-off from mollifying Beijing”

O’Connor’s trade challenges: persuading Biden to join CPTPP will be high on the agenda

Damien O’Connor, the new trade and export growth minister, has a large agenda but officials who know him are pleased at his appointment because he has an easy affability, unlike David Parker who sometimes could be brittle and opinionated.

O’Connor also has a capacity for hard work. Priorities are free trade agreements with Britain and the European Union. 

Probably the biggest challenge will be working with PM Jacinda Ardern to encourage the United States to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP.) The government places this at a higher priority than seeking a free trade agreement with Washington DC. 

They will also try to have the US re-engage with the World Trade Organisation (WTO) as soon as possible.  Continue reading “O’Connor’s trade challenges: persuading Biden to join CPTPP will be high on the agenda”

Dairy prices lift the gloom for farmers but their future meanwhile is being plotted by Beehive planners with a vision

Fonterra’s  boss  might have been  ultra-cautious   but  out on  the country’s dairy farms there  was a  subdued  cheer  at the  news  that the wholemilk powder price had leapt  14%  at  the  latest  GDT  auction..

The  GDT  index  rose  8.3%,  the biggest  rise   since  November  2016,  and the fourth   successive gain.   Fonterra’s  CEO   Miles  Hurrell  says  it’s  “really  surprising—no-one  saw a number of  this  magnitude”.

It dispels  some of the   gloom generated  by the  Covid-19 pandemic.  And it generates  the  hope  that  Fonterra pitched  its  forecast  for  the season too  low,  in  the  broad range  from $5.40kg/MS  to $US6.90.

Hurrell  suggested   suppliers    should not  get “too excited” by the WMP  result. Fonterra had put out excess product for immediate shipment, which resulted in “a bit of a flurry in that first event” ..

“[This] suggests to me that some of our customers out there had caught themselves short – had seen Covid having an impact on their business – but things had bounced back faster than what they’d realised I think”. Continue reading “Dairy prices lift the gloom for farmers but their future meanwhile is being plotted by Beehive planners with a vision”

Agriculture Minister is missing in (in)action while climate change warriors harry NZ’s dairy industry

The  world stands  on  the  brink of a  food crisis worse  than  any seen  in the last  50 years, the  UN has  warned  as  it  urged  governments to  act swiftly to avoid  disaster.

So what  is the  Ardern  government  doing about  it?   Shouldn’t   it  be working  to  ramp  up  food production?  After  all,  NZ   prides  itself  on being  among  the world’s  leaders  in producing  high-quality  food.

Instead,  Climate  Change  Minister  James  Shaw is celebrating  being  “ ambitious” in tackling  what he calls the climate crisis with,  he   says,

“ … necessary rule changes that will incentivise NZ’s biggest polluters to invest in the transition to a clean, climate-friendly economy”.

This  includes putting a price  on  farming  emissions.   Shaw  reckons it’s great that this puts NZ further ahead on climate action than many other parts of the world. Continue reading “Agriculture Minister is missing in (in)action while climate change warriors harry NZ’s dairy industry”