World dairy policy and New Zealand

Abstract

The New Zealand dairy industry has been well placed to take advantage of the relaxing international market barriers that have long plagued the dairy trade. At the same time it is very important to keep the size of New Zealand dairying in perspective. New Zealand is a country of only 3.6 million people and roughly the same number of dairy cows. Accordingly, in terms of people and cow numbers, New Zealand is tiny. The country will always be small in these senses as there is little room, in absolute terms, to expand either the number of people or the number of cows given resource limitations (New Zealand would fit inside the boundaries of Quebec a number of times over). The interesting thing about these statistics is the ratio of these numbers - one cow per person. That is very significant ratio. It shows two things. It shows the importance of the dairy industry within the New Zealand economy and it shows the degree to which it is crucially important for the industry to remain highly competitive internationally. So you will continue to notice New Zealand dairy products. They will be small in volume on the world stage but very competitively produced and marketed. This paper is devoted to examining the record of the New Zealand dairy industry over the last few years in relation to changes in global market forces and policy. There are two aspects to that policy that will be focused on: New Zealand dairy policy and global dairy policy including the implementation of the Uruguay General Agreement on Tariffs and Trade. The paper concludes with some comments on the way ahead for New Zealand in both domestic policy and World Trade Organisation terms.