Tariff system needed?
Wellington reporter An entirely new prescription may now be imperative if New Zealand is to achieve the goal of increased farm output, according to a research fellow in agricultural policy at Lincoln College, Mr J. G. Pryde. He told the Wellington branch of the Economic Society that foreignexchange earnings from agricultural products had doubled in the last three years, but New Zealand’s foreign-exchange problem remained. New Zealand had earned $1491M in the year ending January 31, 1976, but this had risen to $2849M in
the vear ending January 31. 1979.
The increased receipts had been mainly the result of higher export prices and their purchasing power had been cancelled out largely by increased costs, he said. To beat adverse terms of trade an increase in the volume of agricultural exports had been needed, but here the record was not good. Over the three years the volume had fallen on average by about 1 per cent a year. Measures introduced in recent years have not succeeded in expanding farm production, Mr Pryde said. The three main maladies were lack of confidence, inadequate profitability.
and inadequate i vestment.
It had been suggested that New Zealand’s system of quantitative restrictions on imports, maintained since 1938, might be the main reason for the decline in exporters’ profitability. If this was so, it W’ould explain why agriculture could not perform satisfactorily while the dual economy system worked in New Zealand.
Attempts to compensate formers for the adverse effects of import controls on their profitability would not succeed, Mr Pryde said. The only real answer might be to change the system of protection by quantitative restrictions to a system of protection by tariffs.
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Press, 17 April 1979, Page 18
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280Tariff system needed? Press, 17 April 1979, Page 18
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