A green economy is paying our way in the world

Agriculture lies at the heart of the real green New Zealand economy that is not just helping to pay New Zealand’s way in the world today, but with research and innovation, is ideally suited to grow the economy into the future as today’s balance of payments show.

“The real story from the latest balance of payments, taking away any earthquake-related volatility, is the way exporters are helping to pay our way with the rest of the world,” says Bruce Wills, Federated Farmers President and economics and commerce spokesperson.

“At the heart of improving our country’s balance of payments is the primary sector. I guess you can say that it’s the real green part of the economy because that’s the colour of pasture.

“The latest Primary Growth Partnership (PGP) announcement also shows that agriculture is so much more. The cooperative, Ballance Agri-Nutrients, is using its PGP to see how fertilisers can be better utilised and this includes keeping nitrogen on-farm and out of waterways.

“This is the sort of green agri-tech that grows out of what New Zealand does best. It can be taken globally as farmers recognise our future is reliant on research and innovation.

“It’s not about ‘maybe’s’ or ‘what if’s’, but high commodity prices boosting agricultural exports. These have propelled New Zealand to annual goods surpluses over the past two years, but to be fair, it also reflects weak import demand from a sluggish domestic economy.

“It may have been a hard grind but goods-related trade has helped cut the current account deficit. It’s gone from an unsustainable peak of 8.9 percent of Gross Domestic Product (GDP) in December 2008, to be held below 4 percent ever since.

“Considering the amount of foreign investment in terms of debt and equity, that’s probably a more sustainable level.

“Despite a bright long term picture for agricultural exports, we do expect commodity prices will come off their recent peaks.

“The real policy skill will be about continuing the economy’s rebalancing to the tradable sector when the domestic economy does start to recover. The domestic economy will suck more imports in while boosting returns for overseas investors.

“Whoever takes office after 26 November, they’ll need to show policy and fiscal discipline. This isn’t about flights of fancy or a government wanting to be on the field of play, but a focus upon policies that support those things that make us globally competitive and productive,” Mr Wills concluded.