Conclusion
- The research presented here indicates that the New Zealand beef, sheepmeat and dairy industries are significantly better off as a result of the UR agreement. The estimated gains are summarised in Table 8.
Table 8: Estimated Gains to New Zealand Agriculture from
UR Agreement in 2000
$NZ million
Beef
117.9
Sheepmeat
124.0
Dairy
346.6
Total
588.5
- In total, the ongoing yearly gains identified above amount to at least $NZ 588.5 million. It should be noted that these gains measure only the benefits of improved tariff quota access and lower export subsidies for the beef, sheepmeat and dairy industries. This result, therefore, is expected to underestimate the total gains to the agriculture sector from the conclusion of the UR as New Zealand has also benefited from lower tariff barriers, which represent a saving in tariff duties that would have otherwise had to been paid for access to foreign markets. Furthermore, the results in this paper only look at the beef, sheepmeat and dairy sectors and only focus on the main outcomes of the UR affecting these industries.
- The results estimate that the beef industry has gained $117.9 million in extra revenue from the US beef market due to the abolition of the voluntary restraint agreement and the negotiated increased in the country-specific tariff beef quota. The sheepmeat industry is estimated to have gained $124 million of additional revenue from the EU market through an increase in New Zealand's country-specific tariff quota and the elimination of the quantitative restriction on the volume of chilled sheepmeat that could be exported.
- The results for the dairy industry, presented in Tables 4-7, indicate that production of three of the four main commodities - butter, cheese and SMP - would have been lower in 2000 than was actually the case. And as a consequence, the volume of dairy exports originating from New Zealand is also estimated to be lower. Only the production and exportation of WMP is estimated to be higher without the UR. Combined with lower world prices, export revenue for cheese and butter is estimated to be significantly less without the UR. Although export volumes of WMP are estimated to be higher without the UR, a lower world WMP export price also results in lower export revenue for New Zealand. The overall value of dairy exports for the year 2000 without the UR is estimated be at least approximately $346.6 million less than the value with the UR. Such a large and ongoing reduction in export revenue would have had serious implications for the domestic dairy industry and also for the wider New Zealand economy.
- Further, the estimated gains above apply to the year 2000 only. As the Uruguay Round Agreement on Agriculture decisions are being implemented progressively, it would be reasonable to estimate that total gains to New Zealand agriculture since the conclusion of the Round have already exceeded $1.5 billion, and that the value of the gains is increasing every year.
MAF International Policy
April 2002
Contact for Enquiries
Rural Affairs Coordinator
Sector Performance Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0675
Fax: +64 4 4 894 0745
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