The true price of milk is its cost, in distracting us from the bigger issue: what policy and regulation is needed, to secure quality food for ordinary — all — New Zealanders

Why assume milk guzzling is such a good thing? Why should it not cost, since it does?

I think it started with the Budget block of cheese. Now the eponymous Campbell, bless him, is on a crusade, about why our milk costs more than Australia’s. What ought to be a sort of birthright — our equivalent of OPEC oil, produced on the fat of our land — is being priced out of reach of New Zealand.

It’s getting (ho ho) whipped into a political issue; and so it is, but that’s not all it is. It’s a policy issue.

Sexy, huh?

Other things being equal, of all the foods that should be cheap, would milk top the list? Calcium for strong bones and teeth, to be sure. Better than fizzy drinks, to be sure, better than fruit juice? And let us not forget the butter, and yoghurt, and cheese — let us not forget ice cream — without which life would be, well, not worth living, really.

Let’s not forget its environmental cost, either.

Price has value, as a signal of milk’s true cost which, in ecological footprint terms, is high.

Is a lower price the best price? Or is a true price the gold standard?

The current price doesn’t include environment costs, for either greenhouse gas emissions, or water, for example.

Milk’s a low priority issue, in my view. Food security is high, in a world where prices, all food prices, will rise.

New Zealanders ought to be surer than anyone else in the world of not cheap food, but affordable, quality food, that rewards (ie, pays) farmers for producing quality, for looking after the environment, and pays for itself, in secondary social benefits.

Our present policies, or lack of them, put us on a par with everyone else in the world.

Here’s how it’s being handled, politically: like a dog's breakfast. GST off fresh fruit and veg (Labour). GST off healthy food (Rahui Katene, Maori Party). GST off food (Maori Party co-leader Pita Sharples). 

Bernard Hickey — who's a bit doomy and gloomy, quite often, but not without some reason — points to oil at $4 per litre, soon, which will eat up GST’s buffer.

I think we need an inquiry, not into milk or food prices, but food security and supply, starting now, and looking out to say, 2050, with a broad remit to consider all of the issues, and any type of policy response.

Milk puts some life and meaning into soporifics: the supermarket duopoly, supermarket pricing. But focusing solely on milk makes "dairy giant" Fonterra a distraction.

It’s beyond scope of any single one of the policy shops (though several have some interest), which in itself tells you something: the low value that we put on what we put in our mouths.

It looks as if even Sue Kedgley, veteran campaigner, is being led into battle, not war.

Comments (31)

by nommopilot on May 04, 2011
nommopilot

Think ahead?  Never!!

 

by Ian MacKay on May 04, 2011
Ian MacKay

Of course it may be that dairy products are very unhealthy. Discussion has come up over the longevity of some groups of people who eat no dairy products. If dairy products earned popular World disapproval then we would be in a fix!

But your main point is about availabilty of basic foods at affordable prices. Yes. And I guess there would have to be a change of attitude about buying readymade/processed food too. Some people never use their stoves!

And hey. If we all had a rice-based diet with trimmings of a little fish or lean meat and herbs and spices wouldn't that be a "new way" of looking at nutrition! Wonder why the World didn't think of that?

by Claire Browning on May 04, 2011
Claire Browning

Three years ahead, Mic.

by Peter Ryan on May 04, 2011
Peter Ryan

@Ian. unfortunatly this is where rice with a bit of fish or lean meat will take us

http://www.loe.org/shows/segments.html?programID=11-P13-00017&segmentID=5

by nommopilot on May 04, 2011
nommopilot

"Three years ahead, Mic"

except for that great Emissions reduction target the national government have.  that's forward thinking (as long as no one in 2050 remembers who John key was)...

Great post though, Claire.  When will you be running for parliament?

by william blake on May 04, 2011
william blake

Agricultural issues are perhaps the greatest reason why the Green party will never poll higher than 15% at an election (to answer your last posting Claire). The true environmental costs; emissions, water use, land capture etc. of agri-business are not being met and a Green government would fix that.

Most people in this country rely on agriculture for an income, including beneficiaries. I can not see how the dirty old economic engine of the country can be made to run smoothly, cheaply and cleanly without scaring the bejezzus out of the average mainstream voter.

by Save Happy Valley on May 04, 2011
Save Happy Valley

What would sustainable agriculture look like? permaculture, tree farming, food forests, community and guerilla gardens, rooftop gardens...? for a 'farming' nation... NZ is rather non innovative in how it grows and produces food.

 

Cuba is an interesting case in Organic horticulture. Venezuela is following some of those methods and making urban micro gardens.

What would happen if the fed farmers met transition towns and actually listened...?

by Claire Browning on May 04, 2011
Claire Browning
''When will you be running for parliament?'' When you join the comedy club, Mic! Also, I would have to come down from the rarified heights of my Pundit soapbox. The House of Representatives is a low place, by comparison. Its aspirants (and occupants) have the fond view that this is where they will make stuff happen. Hate to break it to them but ... in fact, the real engine room is the back one! ;)
by Claire Browning on May 04, 2011
Claire Browning
That's why it's sexy, BTW.
by Raymond A Francis on May 04, 2011
Raymond A Francis

Interesting thoughts Caire

What is the Green position on this?

by Steffan Browning on May 04, 2011
Steffan Browning

The Greens want safe nutritious affordable food. Policies address sustainable agriculture, toxins and pesticides, GE and organics. Encouragement of producer co-operatives is just one method of addressing the need for adequate producer return while attempting to keep food affordable. Discouraging uneccessary food imports and resisting free trade agreements that encourage commodification of food another. The Greens have policy that hits at poverty, reducing cost of housing (a major expense) as well to ultimately allow access to safe, nutritious food (organic for example) that currently appears out of reach for some. Inflation adjusted, food is cheaper now than the memories of many eating it can recall. Comparing food prices relative to incomes shows in fact a drop in prices in recent years. This is likely to rapidly change though, and we must not be too timid to ensure a correction in food pricing relativity if we are to get producers out of the unsustainable expectation of more production from the same area. It is bad on the land, animals and those that work there. Increasing the value of export production rather than quantity will lift the quality of kai here as well; more nutritional bang for the buck. Using producer boards with government participation can help even out price spikes and assist both producer price and consumer food security in NZ. Government procurement policies for sustainable NZ grown kai first That of course appears too interventionist for many, but may be necessary if we are going to use more than market forces to assure environmentally sustainable farmers stay on the land and healthy kai is on everyones table.

by Steffan Browning on May 04, 2011
Steffan Browning

My previous comments were more relevant to the conventional farming situation. Save Happy Valley's approach is ideal for domestic food security and fits very well as cheap fossil fuel becomes history, but some systems can be potentially difficult in meeting export phytosanitary requirements and market expectations. Those same restrictions may relax  given increased food demand, or be overcome with value adding/processing first.

by Save Happy Valley on May 05, 2011
Save Happy Valley

It looks like food issues will be getting a lot more discussion http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1072... New Zealanders don't want to become tenants in our own lands ... so we can be milked

Nash was just one of several MPs from different political parties to zero in on the potential of the Chinese firms trying to gobble up Kiwi dairy farms to establish vertically integrated businesses.

Wonder what Labour's rural spokesperson, Damien O'Connor thinks?

A food debate would be a good event this year. Food politics doesn't get much of a mention in NZ. Recommended reading anyone?

 

by Chris de Lisle on May 05, 2011
Chris de Lisle

See, I struggle with this. I get the fuss about dairy, because cheese costs $10-$15 a kilo at the moment; but most other food isn't that expensive.

At my local, a lettuce is about $1.50 (and can last half a month), leek's $1.00, spagghetti pasta maybe $1.50, a big thing of pasta sauce maybe $3.50.

That's enough to feed someone for a week, it's only $7.50, and it's fairly tasty to boot. Granted, if you want variety, you might spend twice that per person. But a lot of the expense in food buying (aside from dairy), seems to come from buying luxury foods- $20 fillets of fish, $15 beef, $5.50 icecream.

And if the non-luxury items get cheaper, few people are going to be buying more of them. They'll be investing any savings straight into more of the luxury food.

The problem, as I see it is when something, like milk or cheese, seems to be making its way to luxury prices when it should be closer to staple prices.

by Claire Browning on May 05, 2011
Claire Browning

You spin out one lettuce for "half a month"?! For shame, Chris.

Also, I'm not sure the "fairly tasty" diet you've outlined is either in fact "fairly tasty", or enough to properly feed anyone other than a small bird for a week. I am a fairly small bird, and I'd get through more than that in a day or two ...

I think the key point is, your cheap food is cheap, because its costs are externalised. Also, oil's been cheap, which is through and through the supply chain.

Granted, it's when you want fresh, quality food that the price really jumps up. You call this "luxury". I call it necessity, and something NZers ought to be able to expect - while granting that we could do with knocking back on the meat and dairy (for both environmental and health reasons), a point I made in the post.

by william blake on May 05, 2011
william blake

Thinking locally; this year  we have installed bees  and I am trying to sort out keeping seeds for next year. I am really bad at this, empty pods or forgetting to let things bolt. Tomatoes are easy, just dump the last plants with a few fruit in the corner of the garden and pot on next spring. My pruning skills are a hazard, I keep reading up and hacking away and get bountiful leaf crops.

Keeping seeds seems essential as buying the plants is almost as expensive as buying produce; seed / seedling co-ops would be a good thing.

And how much fruit rots on the ground in suburban gardens across the country.

by on May 05, 2011
Anonymous

Bit late for this one, but better that than never.  One of the things not discussed is the incentives on Fonterra to keep the price as high as it can.

Fonterra is a farmer owned co-operative, and its owners are also its raw material suppliers.  Normally, the suppliers are separate from the owners, and companies protect the interests of shareholders by keeping the cost of inputs as low as possible.

In a farmer owned co-operative, this gets turned on its head.  To produce a good return for shareholder, the company keeps the price of its raw material as high as it can, which has a flow on effect in the finished product. 

Fonterra competes in the global market which should mitigate against it price-gouging.  I don't know whether this is the case or not, but it does seem to me the incentive on Fonterra to keep prices down (so it can compete internationally) is at least weakened by the incentive to increase returns to farmer/owners by keeping the price of its raw material as high as it can.

by Richard Aston on May 06, 2011
Richard Aston

Richard you make a good point - the Fonterra system is predisposed to maximising returns and therefore retail prices. Fonterra faces international competition but has an effective monopoly in NZ - we cannot look to competitive forces to keep our dairy prices down.

In addition the country as a whole wears the environmental cost of dairying not the international buyers. We don't have systems to pass true environmental costs onto the producers.

The only option left is to force price controls on dairy products. Not an option I am comfortable with but ....

 

 

by Richard Aston on May 06, 2011
Richard Aston

Sorry about the garbage in my last post - the paste from word doesn't seem to work.

[corrected: ed]

by Claire Browning on May 06, 2011
Claire Browning

One of the things not discussed is the incentives on Fonterra to keep the price as high as it can.

That's all fine - great point and all that. (Not being sarcastic - I really do think it's a great point.)

However, it's totally beside the point of the post.

This is the same old drum I've been banging. It is that if you passed policies through a filter, that first asked what are the most important challenges we face today (sustainability, our environment, ecological footprint, resilience), you'd get a different product out the end. You would not be focusing on getting milk's price down, at all. You might, however, find food security, and the pricing of externalities, quite important.

Fonterra isn't discussed, because the only possible relevance it has as far as I can see is about price transparency - in other words, to figure out whether we're getting a true price (and we already know we aren't), it would help to know what the price comprises. But otherwise, for all the effort Kedgley is pouring in to this, I think it could be better spent elsewhere.

The post was a bit elliptical, because I get really tired of kicking the Greens. If they, too, are tired of this, they could of course always fix it ...

by Claire Browning on May 06, 2011
Claire Browning
And of course, the first Richard's point isn't one the Greens will be making, either, because they like co-ops.
by Save Happy Valley on May 07, 2011
Save Happy Valley

Perhaps the farming fondness of co ops is how greens can build better relationships with the rural sector and rural communities. Greens are seen as pro union and anti coal etc, it would be good for them to be seen as pro clean energy and 'smart farming' to borrow the greenpeace phrase.

Of course we should be (or farmers and those with gardens and orchards etc) should be growing lots of things besides milk... more oilves, nuts, fruits, trees for timber, and boatbuilding, for traditional carving and tools and so on.

NZ could really do with a rural revival.

 

by Save Happy Valley on May 07, 2011
Save Happy Valley

Quite a challenge you put forward : ... they could of course always fix it ...

by Raymond A Francis on May 07, 2011
Raymond A Francis

So is Richard saying the green's position would be let's screw the farmers (anything to keep the price of food down) and turn them into peasants

It's has been tried before

by Claire Browning on May 07, 2011
Claire Browning

No, Raymond, that's not the Greens' position. Whatever else may be wrong with their position, Kedgley has explicitly said that farmers are not the target, that they ought to be properly paid.

by Claire Browning on May 07, 2011
Claire Browning
And you seem really down on the Greens, Raymond - just about every comment. Why is that?
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