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Food nationalisation threat from pandemic

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Former trade minister Tim Groser believes dairy prices and exports have fared well amid increasing problems for world trade, exacerbated by the covid-19 pandemic.
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Tim Groser | September 14, 2020 from GlobalHQ on Vimeo.

Global Dairy Trade (GDT) prices have remained remarkably stable throughout the upheaval, he said during an NZX Dairy Derivatives webinar on opportunities for the dairy industry in the dynamic landscape of world trade.

Former United States agriculture secretary Thomas Vilsack also contributed, along with director of international affairs for the directorate-general for agriculture and rural development in the European Commission John Clarke.

Vilsack, currently president and chief executive of the US Dairy Export Council, said his greatest fear right now was that the pandemic would create impetus for food nationalism.

“Countries trying to maintain and protect their own industries at the expense of trade opportunities,” he said.

“Because at the end of the day that impacts consumers, jobs and economies.”

Groser said covid’s impact on New Zealand dairying had been mild, even positive in some respects.

However, the rise of food nationalism was of grave concern because NZ overwhelmingly exported its food production.

Clarke said world trade was in its biggest crisis for 25 years with the US and China at loggerheads, the World Trade Organisation being starved of funds, disputes breaking out and all exacerbated by covid-19.

“It is always hard to argue for trade liberalisation in a recession,” he said.

He identified a growing risk of “gastro-nationalism” for both well-meaning and political reasons.

“Ironically, the food systems are very resilient and there are no shortages of food,” he said.

Food self-sufficiency was not a new concept and not caused by covid-19, Groser said.

Adding global catastrophic events will shift political attitudes.

“This has happened before and many people in many countries will respond to the political appeals, so it depends on how long covid-19 remains disruptive of food chains,” he said.

Vilsack suggested that covid might be an opening act of food security problems brought on by climate change.

“Significant stresses will create a lot of tension and unless we figure out ways to co-operate this could be very serious,” he said.

Clarke said that economics and politics were not synchronised on this matter.

“Economics tells us that food security is not the same thing as self-sufficiency, quite the reverse,” he said.

“But a lot of people, even in Europe, regard covid as a product of excessive globalisation, wanting to have less trade and travel and less exposure.

“The EC has worked to keep trade routes open so as not to trigger a food crisis,” he said.

Clarke said that dairy would remain a sensitive area in trade negotiations, especially between Europe and NZ, and recessionary pressures would add to that sensitivity.

“We won’t be recommending liberalisation of dairy trade with NZ because it would put a lot of European farmers out of business and lead to rural decline,” he said.

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