Tuesday, 14 July 2020 09:14

Primary export plan a map to nowhere?

Written by  Sudesh Kissun
Cameron Bagrie. Cameron Bagrie.

The Government's new plan to boost primary sector export earnings is bold but needs bigger numbers, says economist Cameron Bagrie.

He says the Fit for a Better World Action Plan launched last week by Prime Minister Jacinda Ardern will actually see primary sector exports fall from around 16% of gross domestic product (GDP) to 14%.

He says lifting primary exports by $10 billion per annum to bring in a cumulative $44b of earnings in a decade sounds big but it’s a growth rate of around 1.5% per year.

“Primary exports have averaged around 6% growth since 1990...the primary sector won’t be leading any recovery at 1.5%,” he told Rural News.

Bagrie points out that the baseline is for primary exports to grow at 1.9% without a roadmap.

With the roadmap announced by Ardern last week, the aim is to get it up to 3.4% per year.

Bagrie notes that the additional 1.5% growth adds $10 billion. A 3.4% growth rate adds a “bit over half” historical primary export experience and would see primary exports shrink as a share of GDP.

Agriculture Minister Damien O’Connor said the sector’s ability to record 4.5% growth to about $48 billion of exports in the past year despite Covid-19, highlighted demand for our top-quality products. 

He points out that the $10 billion in additional revenue each year from 2030 generated is on top of other growth that takes place. The cumulative total of additional export revenue over the next decade could reach $44 billion.

O’Connor says it is important to understand that the average 6% growth is based on decades of volume growth through intensification and claims it’s widely acknowledged that model is no longer sustainable.

“Our Roadmap would see projected growth rise to 3.4%, to $10 billion annually in 2030 – that’s higher than the 1.9% growth anticipated without the roadmap,” he told Rural News.

“We have estimated that growth conservatively based on uncertainty caused by COVID-19. Boosting primary sector exports will help grow jobs.”

O’Connor says there is a limit on growth fuelled by more production.

More like this

P*ss weak!

OPINION: Your old mate reckons if you ever needed proof of just how little influence Agriculture Minister Damien O’Connor has, just look at his inability to get a dispensation for much needed overseas machinery operators for agricultural contractors for this season.

Hort exports top $6.2 billion

Horticulture exports hit a record breaking $6.2 billion in the year ending June 2019 – up $720 million over the previous year.

Featured

 

Fonterra back in the black

Fonterra chief executive Miles Hurrell says 2019/20 was a good year for the co-op, with profit up, debt down and a strong milk price.

Strategy to reduce heifer mastitis

First calvers are more prone to mastitis than older cows. According to DairyNZ, farmers must choose a strategy that best suits their herd, farm team, and budget.

National

Helping grow farming’s future

John Jackson’s ability for future and critical thinking saw him deeply involved in the development of an agribusiness programme that…

Nothing sustainable without profit

Chair of Dairy Environment Leaders programme Melissa Slattery believes that sustainable farming is highly important to young farmers.

Machinery & Products

JD updates header line-up

John Deere has updated its entire header line-up for combines to include the new HDR Rigid Cutterbar Drapers, RDF HydraFlex…

Hybrid harvesters launched

New Holland has entered the world of hybrid headers, launching a new machine that blends its conventional threshing drum and…

» Latest Print Issues Online

The Hound

Burn!

OPINION: This old mutt had to have a giggle at the dig Feds recently made at the Green Party in the…

Why?

OPINION: Your canine crusader was aghast to read that the prices of zucchini and cucumbers rose more than 30% in…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter