Nice one: Dairy delivers better way of life for all Kiwis
By Professor Graeme Doole, Principal Scientist
Every New Zealander is better off today thanks to the nation’s dairy cows – and that’s no exaggeration.
We will continue to be better off into the future too, because of this important sector and its powerful linkages to the overall well-being of New Zealanders.
The nutritional benefits of dairy to the human body as part of a balanced diet are factually documented. Dairy is also central to many of our culinary cultures – from crumbly cheddar and smooth brie, to ice cream, yoghurts, and butter for baking or on toast with marmalade.
What might not necessarily be as readily understood is the way the dairy sector helps to provide many of the things Kiwis say matter to them when they think about what makes their life worthwhile.
As we look at what makes life here in New Zealand good, and what can make it better, I want to cast light on how dairy works with every drop of milk to help improve our lives, from helping to pay for the goods and services we value, to assisting to reduce the price of others, including imported items.
At the same time dairy farmers, who are such innovators and are so responsive to the signals they receive, are improving their environmental practices, be it fencing and riparian planting to protect waterways, installing upgraded effluent systems, or working to reduce greenhouse gases.
Dairy is closely intertwined with the entire economy, contributing in so many ways to higher living standards for New Zealanders. Quite simply, the healthier the country’s economy, the better the quality of our lives, both now and into the future.
The dairy sector generated $8.2 billion of Gross Domestic Product (GDP) for New Zealand in the 2017-18 financial year, and is set to top that for 2018-19 – GDP being the way the value of the economic activity associated with a given sector is measured.
This GDP figure can be doubled to total $16.4 billion, because for every dollar that dairy earns for the New Zealand economy, another dollar of value is added through dairy’s spending, directly, as in what dairy farmers and dairy companies go out and buy from businesses across the country, and indirectly.
I’m mindful this GDP statement might not mean much, so perhaps a clearer way to give insight into how dairy is linked to better standards of living for Kiwis is to say this is the equivalent of $3,500 per person that dairy injects into the New Zealand economy.
That $3,500 could buy everyone two regular sized flat white coffees every day of the year, or about 30 litres of petrol every week (give or take, depending on the price at the pump).
Our dairy sector is the largest goods exporter in New Zealand, with a 28 percent share of total merchandise exports, earning two and a half times more than the meat sector, more than three times the wood industry, and 10 times more than wine. Cheese exports alone generated $1.9 billion compared with wine earnings of $1.7 billion.
Dairy significantly helps to fill Government’s tax coffers too, providing more money to pay for the essential services that help to improve peoples’ quality of life – education, hospitals, social security and welfare, police and so forth.
In the 2017-18 year we estimate dairy farmers paid $300 million in taxes. For the 2018-19 year, they will likely pay even more.
Dairy also delivers for regional government with rates and other charges, helping to pay for local infrastructure and services. Last year, farmers alone paid more than $200 million in rates.
Currently the dairy sector employs 46,000 workers – that’s the entire population of Timaru, Canterbury’s second largest city, or more than all those living in Wellington’s Upper Hutt.
On-farm there are 34,000 full-time equivalent employees, and a further 12,000 across 35-plus dairy processing plants.
Dairy sector employment has grown faster (+3.1 percent per year) since 2000 than the rate of national job creation (+1.8 percent per year), boosting rural communities.
Not bad credentials really.
Photo: Graeme Doole
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