There’s a global food shortage right now. A bunch of reasons, many of which were discussed here in a Nov 07 Guardian article – according to a UN statement at that time, the shortage is due to oil price increases, demand for biofuels, weather effects and increased demand from India and China.
It’s an election year in New Zealand, and there’s definitely a mood for change – a fourth 3-year term with Labour leading the government has never been likely. The food shortage here is being framed as a domestic issue as much, if not more, than a global one – Labour is failing to keep the price of cheese to an acceptable level!
What I want to know, and have been unable to discern, is how the specific NZ situation relates to the global situation. Does our government bear some responsibility for the food price increases here? If so, what aspects, and how do they interact with the global environment?
I’m genuinely asking, because I genuinely don’t know and this seems pretty important to me. Maybe there has been media discussion of this very topic – but if so, I haven’t seen it.
4 thoughts on “Food Prices and NZ Politics”
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And of course, if it is going to be framed as an election issue, what exactly (if anything) would National do differently and or better?
It looks there have been allegations and investigations elsewhere on the globe about milk price fixing. http://www.stuff.co.nz/4503668a11.html
Haven’t heard about any kind of investigations about that here, though.
The Government continues to claim that food prices are an international issue, and beyond the control of the domestic market. As we have moved into the global economic village, we have become more vulnerable to the pressures of supply and demand that affect world food prices. So goes the government line.
Its a hairy one though, if one considers that a prime factor in the increase in food prices is directly relative to the price of oil.
The price of oil is also driven by international markets and supply and demand factors, but if the NZ Government had the political will, it could in fact do something about it. I expect there will be a dozen good arguments against this, but when one considers that over half of the price of a litre of fuel at the pump is tax, then it becomes evident what action the Govt could take.
Businesses pass on rising fuel costs to the consumer. The NZ Government has the power to reduce the amount of tax it takes at the pump, and this in effect would reduce the price hikes thrown at the consumer by every supplier at every level of the market. Even if it was only to reduce the tax take on diesel, which is the primary fuel used by the freight industry, where the bulk of this cost occurs.
Then, maybe, our cheese might be a little bit cheaper.
Unfortunately Dan, the price of oil is fairly inelastic. It’s one of those things we’ll keep buying until it hurts. If you take the tax off then, yes, the price will come down but will go up back up as quickly as the petrol companies can justify it.