Dairy drop exposes bankruptcy of National's economic strategy

Fonterra’s cut to the dairy pay-out today shows National needs new ideas for the economy other than reliance on increasing commodity dairy production, which pollutes our waterways more and threatens New Zealand’s clean, green brand, the Green Party said today.

“National’s idea of growing our prosperity is to produce ever greater volumes of milk powder, but we need get away from polluting commodities and spend more on innovation so we have a smarter, greener economy,” Green Party Co-leader Dr Russel Norman said today.

“During the election, National showed it was bereft of new ideas for the economy. When asked in election debates for one new idea about how to take the economy forward, both Finance Minister Bill English and Prime Minister John Key answered with silence.”

Fonterra today it announced it was cutting its pay-out for this season from $6.00/kg of milk solids to $5.30, which is sharply down from the $8.40 paid last season.

“We should be worried by op-ed comments in today’s Dominion Post by two prominent Norwegian fishers who said that they have travelled the length of the country and had mounting concern about the drop in the quality of New Zealand’s water,” Dr Norman said.

“To us who live in a Western European country where environmental issues are now taken seriously, the low quality of water quality in New Zealand is appalling,” wrote Geir Sogn-Grundvag a senior researcher at the Norwegian Institute of Food, Fisheries and Aquaculture Research.

“In our opinion, the Government is on the road to effectively ruin both the rivers and consequently the viability of the ‘100 % Pure’ brand,” they said.

Dr Norman said we need to switch from a strategy of producing more volume to one of adding higher value, less polluting products.

“National is planning to cut real spending on R&D by 10.2 percent over the next three years according to its draft National Statement of Science Investment,” Dr Norman said.

“Manufactured exports have dropped nearly 20 percent in real terms under National’s watch − and they have fallen from 18.3 percent of total exports to 13.7 percent.

“What National needs to do is spend more on R&D, not less,” Dr Norman said.