Tariffs a growing cost for farmers

JON MORGAN
Last updated 17:05 28/11/2012

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Other countries' tariffs on New Zealand's fruit and vegetables cost each of our 5400 growers $44,000 a year, according to a study out today.

That was an increase of $10,000 on 2010, the horticulture industry's latest Trade Barriers Report says.

The study says horticultural exporters paid an estimated $241 million in tariffs, an increase of 2.5 per cent on the 2010 figure of $235m. At the same time, export earnings increased by 6 per cent.

The Horticulture Export Authority and Horticulture New Zealand commission the biannual report with funding support from the Foreign Affairs and Trade Ministry.

About 60 per cent of New Zealand's fruit and vegetables are exported, making just over $2.2 billion.

"We are now reaping the benefit of great opportunities for trading in Asian countries, but there is a downside with that, because their tariffs can be considerably higher," HortNZ chief executive Peter Silcock said.

"That's why we need to continue our efforts on developing and signing free trade agreements."

The study noted an unchanging trend for other countries to exploit the use of non-tariff trade barriers, known as SPS - sanitary and phytosanitary barriers - but did not include their effect.

Horticulture Export Authority chief executive Simon Hegarty said these costs were greater than the cost of tariffs. 

They included compliance with quota restrictions, grade standards, fumigation requirements, additional product testing, plus labelling and packaging rules.

Difficult international trading conditions meant some countries resorted to these technical barriers.

"Unfortunately, reality tells us sound science does not always prevail where SPS barriers are concerned."

Examples of high tariffs

Buttercup squash: 48 growers paid an average of $121,000 each in tariffs - up to 27 per cent in Korea - a total cost of $4.3m.

Kiwifruit: 2662 growers paid an average of $38,800 each. The highest tariff is 45 per cent in Korea, which adds up to $35m.

Onions: 105 growers paid an average of $40,400 each in tariffs, on exports mostly to the European Union. Korea's tariff is 50 per cent.

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- BusinessDay.co.nz

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