Dairy boom no benefit to kiwi consumers

Skimming through the paper the other day, I was mildly astounded to read New Zealand, one of the world's biggest diary exporters, now has one of the highest retail prices for butter of any English-speaking country.

According to the Press article, "Dairy prices tipped to remain high" (Tuesday, February 5) 500g of butter now costs up to $4.99 (NZ) in supermarkets, compared with just $2.44 in Australia and $4.72 in overpopulated Britain.

The article states that dairy prices have been rising across the board:

"Last year, butter prices rose by 66.7 %, cheese went up 37 % and milk 16 % according to Statistics New Zealand."

Meanwhile we get the usual right-liberal line from the dairy lobby that consumers should pay "international" prices:

"Dairy Farmers of New Zealand chairman Frank Breunmuhl said there was a slight easing in world dairy prices in December. He expected domestic prices to stabilise, but not drop. Breunmuhl said it did not make any business sense to charge less for dairy products on the domestic market."New Zealanders will pay the world price because we sell on the world market. When world prices come down, New Zealanders don't pay more."

The problem with this world prices argument is that Mr and Mrs Patel in Bombay, or whoever is buying our dairy products, aren't the one's who have to pay for all the dirty externalities of dairy farming, New Zealanders are. Rivers are drying up, lagoons are dying, milk tankers are fouling roads and holding up traffic, pristine water supplies are being threatened by nitrate contamination and third world labourers (some from highly dysfunctional countries) are being bought in to do those 4am milking sessions. Surely, that's a reasonable argument for giving the kiwi consumer a little compensation in the form of relatively cheap dairy products.

And if farmers must have an economic argument, how about the increasing flight of New Zealand workers to Australia.

After all, if butter only costs half the price in Australia, then that's just one more reason why a skilled New Zealand worker is better-off packing their bags and moving across the Tasman.