Research@Lincoln
    • Login
     
    View Item 
    •   Research@Lincoln Home
    • Research Centres and Units
    • Agribusiness and Economics Research Unit (AERU)
    • AERU Discussion Paper series
    • View Item
    •   Research@Lincoln Home
    • Research Centres and Units
    • Agribusiness and Economics Research Unit (AERU)
    • AERU Discussion Paper series
    • View Item
    JavaScript is disabled for your browser. Some features of this site may not work without it.

    An overview of government policies for the New Zealand livestock industries, with emphasis on recent price stabilisation and price support schemes

    Griffith, G. R.; Martin, Sandra K.
    Abstract
    During the 1970's the New Zealand Meat Producers' Board introduced a buffer fund price stabilisation scheme, and the Government implemented a pastoral sector Supplementary Minimum Prices scheme. The schemes were jointly expected to reduce the variability in pastoral sector farm prices and incomes, reduce the cyclical impact of farm sector income on the New Zealand economy, expand output and export revenue, and maintain an adequate income level for agricultural producers. Considerable debate ensued as to whether these schemes achieved their stated objectives during the period of operation, and whether this was done in a cost effective manner. The SMP scheme was introduced to ensure adequate incomes to pastoral sector producers and to encourage greater output and export revenue. It is acknowledged that the scheme suffered severe problems. First, it was not clear that a strong link existed between farm income and agricultural investment, so the objectives may not have been compatible. Second, the operation of the scheme was altered many times as the Government's perception of a desired adequate income changed. Rather than introducing a more stable planning and investment environment in agriculture, these changes may have induced the opposite effect. Third, some substantial problems existed with the scheme, including an obvious inconsistency in New Zealand's trade policy stance and a pattern of prices distorted significantly from market levels which impeded desirable production adjustments. For the price stabilisation scheme, many of the same problems existed. Also the overall objective of price stability may not have been appropriate, and there existed the problem of accurately forecasting the long run average price to set the price bands. A natural tendency to set wide bands made the stabilisation scheme less effective and perhaps encouraged the institution of the SMP scheme. Perhaps the major criticism of this decade of price intervention though is the belief of Governments that income objectives may be achieved through the price system. The large financial losses of the New Zealand Meat Producers Board during 1981/82 -1984/85 may not have occurred if there had not been the obsession with income adequacy through price supplementation. In the New Zealand pig industry some pressure exists to look closely at alternative marketing structures including price stabilisation and/or support schemes. The experience of a decade or more in the pastoral industries, plus a brief and ill fated encounter with price stabilisation in 1977/78, would suggest this should be very carefully done. With current Government attitudes the industry should examine in detail the sources of instability and whether the advantages of greater stability are worth fighting for.... [Show full abstract]
    Keywords
    livestock productivity; agricultural price supports; livestock industry; meat industry; price stabilisation; pork industry; pricing structures; farm production
    Date
    1988-02
    Type
    Discussion Paper
    Collections
    • AERU Discussion Paper series [158]
    Share this

    on Twitter on Facebook on LinkedIn on Reddit on Tumblr by Email

    Thumbnail
    View/Open
    aeru_dp_116.pdf
    Metadata
     Expand record

    Related items

    Showing items related by title, author, creator and subject.

    • Supplementary minimum prices : a production incentive? 

      Sheppard, R. L.; Biggs, J. M. (Lincoln College. Agricultural and Economics Research Unit., 1982-06)
      The perception by Government in 1974 of a need to modify fluctuations in farm product prices resulted in the establishment of the Farm Incomes Advisory Committee (the Zanetti Committee) to investigate and advise Government ...
    • Progressive pricing : an alternative technique for the electricity industry 

      Gravatt, A. K. (Lincoln University, 1991)
      The majority of decision-makers in New Zealand are of libertarian persuasion. In line with this thinking the electricity industry is moving towards marginal cost pricing. As with other business enterprises this move is ...
    • A comparative empirical study of international transfer pricing practices and audits in New Zealand, Australia and China 

      Li, Jian (Lincoln University, 2005)
      Transfer pricing is the price used for internal sales of goods and services between profit centres within the same firm (Anthony and Govindarajan, 1998). The issue of transfer pricing has long been a source of frequent ...
    This service is managed by Learning, Teaching and Library
    • Archive Policy
    • Copyright and Reuse
    • Deposit Guidelines and FAQ
    • Contact Us
     

     

    Browse

    All of Research@LincolnCommunities & CollectionsTitlesAuthorsKeywordsBy Issue DateThis CollectionTitlesAuthorsKeywordsBy Issue Date

    My Account

    LoginRegister

    Statistics

    View Usage Statistics
    This service is managed by Learning, Teaching and Library
    • Archive Policy
    • Copyright and Reuse
    • Deposit Guidelines and FAQ
    • Contact Us