Farm Ireland

Saturday 21 April 2018

'We have a value chain that spans half the world'

The New Zealand ambassador to the UK and Ireland talks farming with our reporter

NZ Ambassodor to UK and Ireland, Lockwood Smith
NZ Ambassodor to UK and Ireland, Lockwood Smith
Darragh McCullough

Darragh McCullough

There are not too many foreign ambassadors based in London that are able to discuss the finer points of how Belgian Blues adapt to hilly conditions.

But there's probably not too many with glorious 900ac farms grazing 700 head of cattle waiting patiently back home.

Sir Lockwood Smith, or Lockwood as he insists I call him during our chat, is that ambassador.

The Kiwi was a former classmate of Brian Wickham (former head of ICBF) at Massey university before embarking on a long, successful career in politics.

"I was always vying with Brian, but never quite managed to come out ahead of him," laughs the animal physiology scholar.

During a varied career he lectured at Massey, hosted children's TV shows and worked as a marketing manager for the New Zealand Dairy Board.

It will be these same markeing skills that the ambassador will be bringing to the fore when he arrives at the Ploughing Championships next week, flanked by a bevy of Kiwi agri companies looking to sell their products into the Irish market.

But there is an even bigger prize at stake for the former agriculture and trade minister. New Zealand hopes to enter into negotiations with the EU on a new bilateral trade deal between the two regions in the first half of next year.

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The notion of New Zealand dairy, beef and lamb producers getting unfettered access to Ireland's most lucrative markets in Britain and beyond will send shivers down the spines of Irish farmers.

Currently there is a 30pc tariff on all New Zealand dairy products exported to the EU beyond the small volume quota that currently exists. An even bigger tariff applies to beef beyond the 1,300t quota.

Interestingly, there is no tariff on New Zealand lamb entering the EU, and the smooth talking ambassador is quick to use it as an example of how a free-trade deal can benefit both EU and Kiwi farmers.

"We really invested in developing the consumer market in Germany for lamb to help us sell greater volumes into that region.

"It really worked and what we've found now is that UK lamb producers are also benefitting during our off-season when the German retailers want to keep the consistancy of supply on the shelves," he says.

Smith also points to the US where a free trade deal gave Kiwi sheep farmers access to a potentially huge market.

"Part of the deal there is that we have a number of arrangements where we work with US producers to upskill them and improve their efficiency through better breeding, feeding and so on."

The seasoned politician, who also served as education minister during the 1990s, is a major advocate for free trade deals, having brokered some ground-breaking ones for his country in some of the most attractive markets in the world.

"New Zealand was the first country in the world to negotiate a free-trade agreement with China, and that formed the basis of the Trans Pacific Trade Agreement. These have been hugely beneficial for us, but they have also allowed us to become very adept at getting deals done all over the world."

And while some might like to take solace from the EU's reluctance to progress trade agreements with the US (TTIP), Smith thinks the opposite.

"The EU is conscious of developing a reputation as a block that nobody can do deals with, so I think they will be keen to prove that they can still get deals across the line.

"New Zealand is one of the most straight-forward countries to deal with, so I think this is something that will be prioritised by the EU Commission," he said.

New Zealand's food heavyweights have already been circumnavigating punitive trade barriers by buying their way into the EU's food sector.

Fonterra has invested in cheese-making facilities in Holland to get access to lactose, which in turn is processed into infant milk formula ingrediants (IMF) in the UK before being shipped to their joint-venture assembly plants in China.

"So we have a value chain that spans half the world, but it would just make it a lot easier to develop those investments further if we had trade deals in place with the EU."

Kiwis also feel a bit hard done by some of the rules at the moment that see tariffs imposed on their Kiwis while Chilean kiwis are exported tariff-free into the EU.

All this, despite the fact that there have been strong cultural and political bonds between the two regions for decades - consider the thousands of Kiwi men that died on the battlefields of Europe during the First and Second World Wars.

"We've come a long way from the days in 1972 when we relied on the UK for 52pc of our dairy exports. Today that figure is closer to 0.5pc.

"The reality is that New Zealand already exports as much dairy product out of the EU as it exports into the region.

"We fully realise that there are sensitive issues covered in these trade deals, but demand for food continues to grow rapidly in Asia, and we're nearly maxed out in terms of additional milk that we can produce in New Zealand.

"Irish representatives have always said that they wouldn't stand in our way, because I think they know that we need to work together," he concludes.

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