COLUMN: NZ Farmers Weekly
As a farmer and MP from the Horowhenua – a diverse district with a strong rural and manufacturing base, – I am acutely aware of the challenges that our exporters face.
I welcome the New Zealand Institute’s latest report “So far yet so close: connecting New Zealand to the global economy.”
I support local manufacturing where this makes commercial sense, however with the China free trade agreement in the pipeline, we need to open our eyes, seize our opportunities and focus on becoming the clever, knowledge-rich economy.
The Buy Kiwi Made campaign has become a political football where it is extremely hard to define what is100% made in New Zealand.
We are a small and remote country in world terms and it is expensive to export our products to our markets. We have limited skills and labour. It is expensive to export our products to our markets. T
To earn premium incomes, we need to play to our strengths – an island nation mainly pastoral based with a strong branding opportunity of “clean and natural”.
NZ has ability to target and service niche markets where our products fetch premium prices.
As the Institute’s report identifies, sometimes this means we have to contract out the manufacturing of our products or their components to offshore firms.
This allows our exporters to expand their overseas markets in a relatively low-cost and low-risk manner.
It enables them to tap into high-quality, large-scale production facilities.
And it allows them to overcome local skill shortages in critical areas of their businesses.
Best of all, perhaps, it enables our businesses to react quickly in an evolving world, where exchange rates and market conditions can change overnight.
This helps our companies to grow, and to develop the skills they need to succeed overseas. And every Kiwi business that succeeds internationally builds up the skill base here, and makes it easier for other Kiwi businesses to follow in their footsteps.
Many innovative businesses in the Horowhenua have developed domestic and internal markets by contracting out their manufacturing overseas, while focusing on what they do best – design, management and branding.
Walk down the main street in Otaki and you’ll see what can be achieved when innovative Kiwi fashion businesses make the most of both local and offshore manufacturing.
Of course there will always be room for niche manufacturing in New Zealand, especially for small businesses and unique local products.
But we need more Kiwi businesses operating on a global scale, and this means that more of them will look beyond these shores for at least some of their manufacturing needs.
With much of our produce exported the demand for dairy, beef, lamb and venison remains positive around the world.
However, farmers are frustrated to see this eroded by the effects of the high exchange rate.
National wants to see rural New Zealand embrace technology, but for this to happen we need broadband to be accessible and affordable.
We also want to prevent the brain drain of young New Zealanders overseas and to drive our wages and productivity upwards.
To achieve these aims, we must embrace the opportunities offered by the global economy and not hide from them.