OnPoint by Keith Ng


Bandwagon Hobos

Trumping the Herald's "28% price rise", Jeanette Fitzsimons has taken whinge-mongering to new heights with her claim that there has been 60% rise in the price of milk (and that Fonterra and the supermarkets are to blame).

It's not true. It's really, really not true.

According to StatsNZ's Food Price Index, the average price of 2 litres of milk in April 2008 was $3.22. The price in April 07 was $2.62. That gets us to 28% -- let's chalk that other 32% up to rounding error, eh? But how about we look over the slightly longer term?

2008: $3.22
2007: $2.62
2006: $3.15
2005: $3.12
2004: $2.96

Even ignoring the fact that Fitzsimons pulled the 60% figure out of her compost heap, her claim is still fundamentally bullshit. If we choose *any* point of comparison other than 2007, the current price of milk is completely and utterly un-goddamn-remarkable.

Second, even if food affordability is an issue, targeting dairy is nothing short of irrelevant.

Milk, cheese and eggs make up 1.2% of household expenditure, according to the 2007 Household Economic Survey. That's $11.60 per week. Even if Fonterra capped dairy prices at 2007 levels, how much are households expected to save? $1.20? $1.80?

More to the point, is it really Fonterra's responsibility to keep milk cheap for New Zealanders? Fitzsimons is essentially saying: "Please sell your dairy to New Zealand consumers at a *guaranteed* lower profit."

You don't need a fake PhD from the London School of Economics to realise that this is kinda stupid. It would, frankly, be slightly more reasonable to ask them to just give milk away. At least they would gain some public goodwill, and they'd be able to target who to give it to (schools, for example) rather than subsidise milk for rich and poor alike.

Third, underpinnings this dimwitted venture is the similarly dodgy promise:

[To] reject the free trade and globalisation dogma and develop a long-term food security strategy to ensure access to affordable food staples for Kiwi families."

Sue Kedgley elaborates in this excerpt from her speech at the Farmers Market Conference:

We are in danger of becoming a cash crop nation -- producing dairy and to a lesser extent meat for export -- while other sectors are being eroded by cheap imports. We import 2.8 million tonnes of food each year -- bananas from Ecuador, garlic from China, wheat from Australia -- and our imports are growing every year.

"In the 1980's before we removed subsidies, New Zealand was self sufficient in wheat. But now we import 75% of the wheat we eat, which makes us vulnerable to skyrocketing wheat prices."

Which, I assume, means that she wants New Zealand farming to diversify -- away from the areas where it's strongest, and into areas where it's not. Now, I'm no botanist, but I imagine that bananas would be one of the latter.

It may be helpful at this point to review the fundamental tenets of the "free trade and globalisation dogma". Let Dr Homer explain:

[Homer searches under the couch for a peanut]
Homer: Ah-ha! [Looks, then says remorsefully] Aw, twenty dollars? I wanted a peanut!
Homer's brain: Twenty dollars can buy many peanuts!
Homer: Explain how.
Homer's brain: Money can be exchanged for good and services.
Homer: Woo-hoo!

By specialising in and exporting dairy products, New Zealand can produce more at a lower price. The profits from the trade flow through the rest of the economy, boosting government revenues, too. That money can be exchanged for goods and services internationally, including other foods that -- because of specialisation -- are produced more cheaply than they otherwise would be. Result: Woo-hoo.

Don't get me wrong, as a Horseman of the Apocalypse, I appreciate a little contingency planning around food security. I sure as hell wouldn't want to be stuck in a country whose primary exports are My Little Ponies and Abdominizers when a global food crisis comes around. But clearly, the kinds of pressures on the world food supply are making dairy more valuable, too.

Not only is it what New Zealand is good at, it's also a valuable insurance against world food prices. To cutting down dairy production in favour of wheat etc. is like pouring water down the drain so you have empty vessels to catch rain with.


This goes far, far beyond disappointing. Not only has the Greens managed to be wrong and stupid, but they've also managed to marry pre-Rod Donald naivety with Winston-like populism.

Surely, they didn't expect asking Fonterra to stop making money to achieve anything. It's the kind of stunt that Winston pulls -- making outrageous claims, safe in the knowledge that there will be no repercussions because it's too ridiculous to be taken seriously. They had other -- legitimate -- issues with the dairy industry, and concerns regarding poverty and food, so they thought they'd have a go and jump on the whinge-wagon, throwing their issues in with "everything is too expensive". That's selling themselves awfully short for a tiny crumb of populist glory.

But even while trying to be populist, they still manage to look like the boogeyman from the ideological fringes.

They are right that Labour has been all talk about climate change, and that National won't be any better. The only place where leadership on climate change can come from is the Greens. But they need to accept the simple fact that most of the people who support action on climate change are not out to destroy capitalism or globalisation.

We thought you did.

This is not about cynical political rebranding, it's about building a real consensus. The Greens can't earn the trust of a broader voter base until you give up the radical part of themselves. Every time you push a radical left agenda, you're pushing supporters of climate change action further away.

Why would you do that? Why now, at a crucial point when climate change is going mainstream? Why over food prices, which is a media beat-up from start to finish? Why?

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