International News

WELLINGTON, (APP/AFP): New Zealand’s finance minister said
Wednesday the country’s multi-billion-dollar dairy industry faced a “serious or extreme” scenario as prices tumble, but downplayed the impact on the broader economy and refused help for farmers.
The South Pacific nation is the world’s largest dairy exporter but
falling prices have hit the sector as rivals, particularly in the European Union, ramp up production.
Finance Minister Bill English said New Zealand dairy needed to return
to the efficient practices that had originally made it a world leader.
“Either way, whether we call it serious or extreme, this is an
industry that’s going to be under pressure,” he told Radio New
Zealand.
“It’s (got) to rediscover it’s comparative advantages, which are costs of
product, ability to solve problems (and) adaptability.”
English’s remarks come after Auckland-based Fonterra — the world’s
largest dairy cooperative — announced it was slashing the amount it pays farmers.
Fonterra said its farmgate price for the 2015/16 season would be
NZ$3.90 per kilogram of milk solids, less than half the NZ$8.65 it paid at the height of the dairy boom just two years ago.
New Zealand shipped NZ$11.5 billion (US$7.8 billion) of dairy in
2015, accounting for 17 percent of total national exports.
But English said the economy was still growing at 2.0-3.0 percent and
could weather a hit from its major export earner.
“The bigger issue here, alongside the distress for the industry, is
going to be the impact on the broader economy,” he said.
“The indications are it will have some impact, but it won’t have as
big an impact on the broader economy as it does on the industry itself.”