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A decision by EU agriculture ministers to divide up equally the amount of New Zealand (NZ) lamb allowed into the UK and EU27 tariff-free after Brexit is to be challenged in the World Trade Organisation (WTO).
Speaking at the NFU Scotland AGM last week, NZ meat trade representative and sheep farmer Jeff Grant said that the proposals represented an unfair trading practice.
Under current arrangements NZ can ship 228,389t of duty-free sheepmeat to the EU every year.
However, the rule adopted by all EU institutions is that the share of actual imports in the past three years decides how quotas will be split after Brexit.
It would mean the EU27 and the UK each accept up to 114,184t of tariff-free NZ lamb.
“We will fight it to the death,” said Grant.
“We have won nine out of the last 12 cases. We need to stick with the current flexibility.
We only fill 65% of our quota to the EU at the moment and I don’t see that changing in the next five years
"If we split the quota there could be a massive surplus of lamb in the UK at peak production as the Welsh farmer might not be able to shift the extra lamb to France.”
According to Grant, NZ views the UK as a mature market and believes it has more opportunities in Europe and China.
“We only fill 65% of our quota to the EU at the moment and I don’t see that changing in the next five years. China is taking an increasing volume,” he said.
He also explained that supermarkets were not seen as a growth area due to their continual drive for higher standards, with the NZ meat trade preferring to move into the restaurant and food-service sector.
The NZ industry is also working on technology that will allow increased chilled shelf life, so that it can export around the world.
Grant explained that this will be driven through lower microbiological counts in meat, which is being aided by increased usage of robots in meat plants.
Subsidy cut
In his presentation he also went on to explain the impact of dramatically cutting subsidies to farmers in the 1980s in his home country.
“I was lucky to get two years of farming before subsidies were wound down in NZ. We received 40% of our income through subsidies, then it was gone. The country was going broke, there was little choice,” he said.
The NZ state was in so much trouble he recalls that foreign embassy staff were asked to use government credit cards to buy up cash abroad to help pay debts.
Up to 70 rural schools shut and capital investment collapsed on farms
Currency also devalued significantly from NZ$0.60 to NZ$0.39 against the US dollar, and the interest rate for his farm loan jumped from 7% to 17%, and the overdraft rate to 24%.
“We got rid of the staff. Then I went to be an MP in 1987,” he said.
He maintained this approach was common across NZ, where staff numbers on farms fell sharply and many farmers took on extra jobs to cover costs.
In the immediate aftermath of the subsidy cut, farmer suicides rose from 300 to 500 a year.
Up to 70 rural schools shut and capital investment collapsed on farms.
Despite the initial turmoil, Grant maintained that very few farmers want to return to state support.
He believes NZ farmers are now market-focused and don’t want government interference.
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