Primary exports tipped to rise 20 per cent by 2008

Primary production exports, up in value by 5 per cent in the year to March, will surge ahead by a further 20 per cent by 2008, agricultural economists say.

The Ministry of Agriculture and Forestry's 2005 May situation and outlook for agriculture and forestry predicts the export value of pastoral agriculture, horticulture and forestry products will rise $4.3 billion, from $16.9 billion in 2004, to $21.2 billion in 2008 - 25 per cent.

A senior MAF policy analyst, Tony Wharton, said the largest contributors to the increase were expected to be forestry (up $1.7 billion) and dairy (up $1.15 billion), both through higher volumes and export prices.

MAF said that despite the strong value of the dollar during the past year, agricultural, horticultural, and forestry exports had more than held their own as mainstays of the economy. Overall exports for the year to March were 4.2 per cent higher from a year earlier.

Associate Agriculture Minister Damien O'Connor said the MAF outlook meant the country's farmers, growers and foresters were in a good position despite recent challenges.

"The future is looking good," he said.

The update predicted the 25 per cent increase in value of primary production exports between 2004 and 2008 would give a 14 per cent increase in agriculture's farmgate contribution to the gross domestic product.

O'Connor said the high value of the dollar was depressing export prices.

- NZPA