All our eggs are in one breakable basket

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diversification_key

It’s an interesting experience to hear New Zealand being lectured by China in the wake of the Fonterra contamination debacle. Not so much because China has a lot to lecture us about but because it gives an outsiders view of our economy.

As well as calling our clean, green image a “festering sore” China’s state- news agency attacked New Zealand’s free-market ideology and as an example gave the leaky homes fiasco where lack of regulation led to homes built which were unfit for purpose.

They put it like this:

“One could argue the country is hostage to a blinkered devotion to laissez-faire market ideology. Many New Zealanders fell victim to this when the construction industry was deregulated two decades ago resulting in damp and leaky homes that quickly became uninhabitable.”

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They could have gone on and pointed to market failure in every aspect of the lives of low and middle income families but the point was made. It appears to China’s leadership that the same free-market adoration and slack regulations that gave New Zealanders leaky homes are exposing babies around the world to potential death from botulism.

The agency went on to criticise John Key’s characterisation of the contamination issue, saying that it was not “mere details” but that New Zealand’s food safety problems were beginning to look “systemic”.

The barely coherent reaction of Fonterra to this latest crisis has certainly given grounds for this view especially after two prior contamination scares in recent years.

The news agency then launched a direct attack on New Zealand’s slavish devotion to free trade saying:

“Too often New Zealand’s government appears to lay siege to perceived trade barriers, battering bluntly away until the doors swing open. And once open, it’s open slather for those who can throw as much produce at the new market as possible.”

That a fair enough assessment. For two decades New Zealand has slavishly sought so-called free trade deals to gain access to overseas markets for our dairy products while sacrificing other sectors of our economy as pawns for exchange.

It should be obvious even at this early stage of this latest dairy crisis that the New Zealand economy is particularly vulnerable because we have all our eggs in one basket – agriculture – with dairy the biggest single section.

In earlier times New Zealand sought a more self-reliant economy with a much broader base in manufacturing and import-substitution industries with highly skilled jobs. Today we have reverted to an agriculture-based economy (72% of our exports) with low-paid, low-quality service sector employment for the majority of citizens.

The one critical lesson from the last four days is the desperate need to widen the base of our economy.

17 COMMENTS

  1. Dead right John. Import substitution such as the car industry and even TV manufacture used to provide thousands of relatively well paid working class jobs. The vehicle CKD packs needed NZ made batteries, tyres, upholstery, wiring and glass. Clothing and textiles mostly off shore now to third world (which kiwis are about to join with Nationals new industrial law letting bosses off from having to even negotiate with workers). Forestry is being run down and always dodged adding value in favour of shipping logs.

    That was then this is now the righties will say, scale, efficiencies blah blah but the challenge is to find 21st century equivalents that get people off minimum wage precarious dangerous work.

    Cheap consumer goods seem meant to some how compensate not having secure well paid employment. Wage rates and conditions even for fast food were literally better in many cases in the mid 80s than now! Dairy is polluting industrial farming, not many more cows can be fitted into NZ unless they are moved inside huge buildings, and once the chinese figure out how to do dairy Fonterra NZ will be largely redundant anyway. Though obviously corporate Fonterra will hang on with their international operations in Latin America Asia and Europe.

    Botulism should be a wake up call to diversify but the bludgers that rule this country are finance capitalists, developers, banksters that shuffle money around appropriating obscene profits rather than doing anything useful while many have no work or catch 4 buses a day to several crap ‘jobs’.

    • That was then this is now the righties will say, scale, efficiencies blah blah

      The more automation we have the less efficiencies of scale apply. It is because of this that we can produce cars and trucks and god knows what ever else as cheaply as anywhere else in the world. The important bit is that we would be able to do it from our own resources. The effect would be to minimise international trade while also making us all better off.

        • Gawd, a North Korea comment from Gosman. How about a Mugabe reference next?
          Can someone make an app for this site that blocks Gosman’s thoughts from appearing, thanks

    • The car industry was hardly import substitution. Getting someone else to disassemble a car and importing the parts so we can reassemble them again (less well often times) was just stupid and didn’t save much (if any) in foreign currency.

      • Incorrect Gosman, the car industry dealt with CKD (completely knocked down) crates of car panels and drivetrains that had to be assembled not reassembled, here with all the parts I mentioned above of NZ manufacture including paint.

        It was always about the socially useful outcome of creating jobs for the people of South Auckland, the Hutt, Thames and Nelson not so much foreign currency. But social usefulness is not on your agenda. You are like SIS spiv Trev Louden forever with your nose pressed against the shop window looking in at the left.

        • If you want people employed in socially useful jobs then employ them as social workers. Reassembling cars that other places do much better and more efficiently than NZ is a waste of resources not socially useful.

  2. Ok . And just what else would you suggest we widen our economic base with exactly ?

    We have an agrarian economy because we have an agrarian country . The only real issue with that is that it’s infested with corruption so deeply entrenched that we’re all mislead into thinking that the entire ‘festering sore’ is a bonus that we should just keep picking at .

    Wake the fuck up ! The Chinese media have more insight into our country than you do .

    We have an almost unimaginably valuable / essential economic engine room in the New Zealand agricultural hinterlands and the best our deviant politicians can do with it is fuck it up by parasitizing it to it’s knees then handing that blood money on to useless fucking Auckland with it’s plump , over stuffed , arrogant , swindling denizens to flee to their Swiss mansions with . Jesus John Minto ! You can’t be so lacking in imagination surely ?

    Further more , the reason that cowsploitation is so fashionable is because it’s an efficient way to ‘ industrialize ‘ agricultural land by using minimal person power . Cows , God bless them , are simple beasts that require not much more than water , grass and a myriad of chemicals poured over them , injected into them and shoved up them so as we can cram them onto tiny cold , muddy paddocks to keep milk flowing out of them to be tankered away . Then that milk goes through a process that not only fucks it up but clearly poisons it . Oh the irony ! It’s also a brilliant opportunity for the greedy , otherwise unemployable to add value to that ‘ product ‘ thus let the gouging begin . Cheeses ? Anyone on a low income want nice New Zealand cheese ? All you have to do is try to decide whether you should pay your electricity bill or eat . In a land smothered in edible things and edible animals ?

    By contrast , sheep require a great deal of hands-on effort to remove their fabulous fluff . ( And I should point out that the evil , stunted Dictator david carter pulled funding for Ag research’s wool division at Lincoln Uni just when wool was becoming popular again . And what about the wool board stockpiling wool for their city banker mates ! ? ) Grain harvesting also , as does fruit , market gardening , forestry , viticulture etc and all those pastimes require builders , plumbers , mechanics etc .
    There’s no argument that NZ is an agrarian economy and until the day humans no longer need to eat or clothe themselves , it’ll remain so . What needs to happen and fucking quick smart is for a wave of decentralization to get people back into the country from which they were lured with false promises and pretty , sparkly things by the very same masters they’re tortured by now .

    Peer into the Abyss that is New Zealands Great institutionalized Lie and see what horrors peer back if you think you’re so tough John Minto ?

    Oh , and by the way … that process of decentralizing will never actually happen . No one will ever look into the Great Lie . No journalist will dare peer into the abyss . Our farmers are too brainwashed , exhausted and depleted . Their young , daring , creative protégées with dangerous imaginations have fled to the cities so no fresh ideas or passion will bubble up out of the cow piss that is now our waterways . Farmers will continue to be courted by liars who pretend to be their friends while they work away their lives and die in fear . ( Dramatic you may be thinking . Well , think again . )

    We Kiwis have this fabulous country to call our own and we just keep fucking it up , whoring it out or harvesting it’s organs while deliberately stabbing at the very heart that keeps it’s blood pumping .

    In the immortal words of the Dalai Lama … WTF ?

    • We have an agrarian economy because we have an agrarian country .

      Nope, we have an agrarian economy because of the shortsightedness of our politicians and business leaders.

      We have an almost unimaginably valuable / essential economic engine room in the New Zealand agricultural hinterlands and the best our deviant politicians can do with it is fuck it up by parasitizing it to it’s knees then handing that blood money on to useless fucking Auckland with it’s plump , over stuffed , arrogant , swindling denizens to flee to their Swiss mansions with .

      Ah, someone who has NFI what cities are for. Cities are the industrial hubs that keep farms going. Also, as far as the blood money goes, Auckland has been subsidising the rest of the country for decades.

      Further more , the reason that cowsploitation is so fashionable is because it’s an efficient way to ‘ industrialize ‘ agricultural land by using minimal person power . Cows , God bless them , are simple beasts that require not much more than water , grass and a myriad of chemicals poured over them , injected into them and shoved up them so as we can cram them onto tiny cold , muddy paddocks to keep milk flowing out of them to be tankered away .

      Wow, your ignorance is truly amazing. Each tonne of cow produced requires several tonnes of resources – resources that we could possibly have better uses for. And that’s just to grow the bloody things. Those myriad of chemicals poured over them could be used to produce life saving drugs for instance.

      There’s no argument that NZ is an agrarian economy and until the day humans no longer need to eat or clothe themselves , it’ll remain so .

      The bit you seem to miss is that we only need to produce enough agriculture to feed and cloth ourselves. Anything above and beyond that is a waste of resources.

      What needs to happen and fucking quick smart is for a wave of decentralization to get people back into the country from which they were lured with false promises and pretty , sparkly things by the very same masters they’re tortured by now .

      You fail to realise why people out of the country. It’s relatively simple – primarily there aren’t enough jobs and not everyone wants to be a farmer.

      Peer into the Abyss that is New Zealands Great institutionalized Lie…

      I have done – it’s you who haven’t.

  3. The gist of Countryboy’s almost incoherent rant is correct. New Zealand could only have a “self-reliant economy with a much broader base in manufacturing and import-substitution industries with highly skilled jobs” if it was highly subsidised – and cheaper mass-produced competing imported products were blocked or heavily tariffed.

    What we do have is a prime, perfectly-situated country for high quality food production in a world that is crying out for high-quality food – and a crying need for innovative, specialist, highly-skilled industries to support it. Dairy, meat, fruit, seafood, wine, wool, timber – we could all live high on the hog with the world beating a path to our door to buy this stuff, if we stopped treating these industries like something vaguely demeaning to us – like something that should be left to the peasants in the dung of the countryside while the real important productive work is done building cars and TV in factories – or at least in make-work schemes to employ the people who crowd into the cities rather than move out into the small towns that tap into the countryside’s resources.

    “Clean Green New Zealand” and “100% Pure” sells to the world not only that the Government makes the kind of environmentally sensitive laws and regulations every Government makes, and then like them ignores where they don’t make economic sense, but that “We the People” actually believe and invest in them, and drags the Government in our wake to actually whip the laggards and shirkers into line.

    What Fonterra – along with the varoa bee-mite, PSA in Kiwifruit, dirty rivers and streams, mining in the conservation estate, fracking and off-shore oil-drilling, wall-to-wall mussel farms in the Marlborough Sounds, Golden Bay etc. – demonstrates is that We the People don’t have a Government committed to the image we want and need to project in support both of our chosen way of life and our livelihood.

    • New Zealand could only have a “self-reliant economy with a much broader base in manufacturing and import-substitution industries with highly skilled jobs” if it was highly subsidised – and cheaper mass-produced competing imported products were blocked or heavily tariffed.

      BS

      We can produce the same products here as what can be produced overseas for the same price if we stop looking at things through the distortion of the financial markets*. Automation does that for us. The more automation we have the more we can divert people from being farmers and into R&D, industrialisation and Arts and craft. Even now farming only takes up 6% to 7% of our working population.

      * Yes, IMO, it is the financial markets and the rich peoples desire to become ever richer through no work of their own that distorts the economy making it appear that producing things here in NZ costs more than producing it in China or other less developed nations.

  4. In earlier times New Zealand sought a more self-reliant economy with a much broader base in manufacturing and import-substitution industries with highly skilled jobs. Today we have reverted to an agriculture-based economy (72% of our exports) with low-paid, low-quality service sector employment for the majority of citizens.

    As I’ve said before, the difference between growing the economy and developing the economy. Since the 1980s we’ve concentrated on growing the economy and have sacrificed developing the economy and all to make a few people immeasurably richer while the rest of us got poorer.

    The result, besides the increased poverty, is that our economy and thus our society is more vulnerable than ever before.

  5. @ Draco T Bastard . Nice try but it’s back to the drawing board for you I’m afraid .

    Are you sure you want to insinuate that Auckland is keeping New Zealand agriculture afloat ? Seriously ? Are you being serious ?

    And as for your other comments re this particular comment of mine ; oh dear me .

    @ Tiresias . Of course my comment was an almost incoherent rant . What do you expect ? A literary masterpiece to please your erudite self ? I’m truly sorry if I offended your highly educated , highly intelligent self with my clumsy musings . I beg forgiveness of you . Please , please forgive me ? No , seriously , I’m truly , deeply sorry . And for your comfort I’d like to caution you that I will keep writing incoherent rantings so if you see my name above comments in the future please do not read them because you will be further outraged at my incoherent rantings all over again , they will be as incoherent and ranting as the one you’re poor self stumbled upon here . Again , please let me apologize to you .

  6. @ John Minto . Hey , thanks man for publishing my comment . Seriously , I was sure you wouldn’t .

  7. “The news agency then launched a direct attack on New Zealand’s slavish devotion to free trade saying:

    “Too often New Zealand’s government appears to lay siege to perceived trade barriers, battering bluntly away until the doors swing open. And once open, it’s open slather for those who can throw as much produce at the new market as possible.” That a fair enough assessment. For two decades New Zealand has slavishly sought so-called free trade deals to gain access to overseas markets for our dairy products while sacrificing other sectors of our economy as pawns for exchange.”

    I have witnessed this gold rush mentality in too many New Zealanders, particularly amongst property owners, getting all high on house and apartment values going sky high.

    There is a strong and powerful opportunist and speculator minority in this country, that do all to entice the wider public into their philosophy of making as many bucks as possible in as short a time, no matter what the cost for others.

    Certain employers follow similar enthusiasm, pushing their workers to create more and more output, by applying hire and fire as it suits them, by casualising employment to keep costs down, and by short-cutting health and safety regualtions.

    I think for those, the dominant “value” is the DOLLAR BILL or symbol: $$$$$$$$

    So Fonterra have been exposed for stuffing up, ruining the reputation of the whole country. We had similar disasters with the leaky building scandal, with Pike River mine disaster, the Rena running aground and leaking oil onto clean beaches, with too many deaths in forestry, and with outsourced fishing done by rust buckets staffed with low paid overseas fishing personnel.

    Welcome to NZ Aotearoa in 2013.

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