Federated Farmers backs call to slice agricultural subsidies

 January 24, 2020

Cutting agricultural subsidies that distort trade and production is a vital step in tackling world hunger and climate change challenges, Federated Farmers says.

“We’re right behind the messages on further reform of WTO rules on subsidies that the Cairns Group of major exporting countries put to world leaders in Davos this week,” Feds President Katie Milne said 

“New Zealand farmers are positive proof that reducing domestic subsidies drives innovation and food production efficiency, and ultimately delivers for the consumer in terms of quality, choice and prices, as well as for the environment.  Our meat and milk have one of the lowest carbon footprints per kilogram of product in the world.”

And like other consumers, New Zealand farmers have benefited from the lower prices, better quality and wider choice that flows from the reduced barriers at our borders for imported goods 

“That’s been important for ongoing gains in agricultural productivity and for the ability of our farmers to produce more with the same or fewer inputs – which is also good for the environment, Katie said.

The Cairns Group proposals would cap and at least halve all forms of trade and production-distorting agricultural subsidies by 2030.  These subsidy entitlements more than doubled to USD $772 billion between 2001-2016 and without reining in  could reach USD $2 trillion by 2030.

The standard of living enjoyed by many New Zealanders would simply not be possible without the wealth generated by our primary industries, whose high value food and fibre products are highly sought after internationally, Katie said.

According to the Ministry for Primary Industries, exports from the primary sector (agriculture, horticulture, forestry and fishing) were worth $46.3 billion - 78% of total goods exports and 55% of total exports and goods and services.

“New Zealand farmers manage to dominate the makeup of the nation’s export profile while competing against international producers who receive large amounts of domestic support.

“It’s quite clear that international agricultural subsidies distort global trade, stifle innovation and if used as a long-term blunt policy instrument, harm the wellbeing of consumers,” Katie said.