How New Zealand Earns an Income

How New Zealand Earns an Income

Whether we like it or not and whether we agree with it or not, it is an incontrovertible fact;

Agriculture in NZ earns the majority of our income!!!

New Zealand produces enough food to feed about 40 million people but given our population is just 5 million most of this production is exported around the globe.

 Some examples of such NZ exports are: 95 percent of the dairy it produces ($15.82billion); 87 percent of the beef ($3.7 billion); 94 percent of the sheep ($3.89 billion); 90 percent of the kiwifruit ($2.68 billion); 90 percent of the seafood ($1.6 billion); 85 percent of the onions ($0.15 billion); 86 percent of the apples ($0.91 billion); 85 percent of the wine ($2.01 billion) and 46 percent of the honey ($ 0.51 billion).

The export production from these items alone, resulted in an agricultural income for New Zealand in 2020 of: $31.27 Billion

We recently saw the report from the Climate Commission that was released for consultation and one of the recommendations from the Commission’s plan was to:

Cull dairy, sheep and beef numbers by 15% by 2030.

This recommendation amounts to a reduction of: 3,924,000 Sheep, 540,000 Beef cattle and 975,000 Dairy cattle based on the current numbers for 2020.

This level of reductions will reduce the amount of agricultural methane emitted into the atmosphere in New Zealand but the net effect globally is more than likely to result in an increase in the release of methane from stock.

The production from New Zealand Farms is currently mostly exported and this level of reduction in numbers will affect the level of exports which will in fact mean that other countries will produce the extra instead of New Zealand farmers.

New Zealand Farmers are renowned worldwide as the most environmentally efficient agricultural producers so therefore the extra production from other countries will be produced by less environmentally sound methods which will in effect mean that there will be an overall global increase in emissions rather than a decrease (even though New Zealand will see a decrease in its emission levels).

The other perverse outcome from this recommendation is the economic effect of this.

Many farmers are presently struggling to remain economic and this level of reduction will actually result in many farmers leaving the industry with an economic effect that may be out of all proportion to the required objective.

This recommendation will also jeopardise the security of food supply within New Zealand and many of our trading partner nations even though the Paris Accord specifically excluded impacts on food production.