Let the new debate on the United States begin: how are the quotas shared out?

By Glenys Christian

Over the gate


Farmers might very well want to vent their fury about tariffs imposed by President Clinton on lamb exports to the United States. But now they are being asked to play further into the Americans' hands as their views are sought along with others in the meat industry, on how the new quota on exports should be shared among meat companies.

Decisions such as these have led to acrimony in the past, with new entrants protesting they were not given the chance to develop niche markets while the bulk of the trade was locked up by larger companies uninterested in such small but lucrative openings.

Farmers were inclined to side with the smaller operators as their arrival on the scene both in processing and marketing often was accompanied by an upswing in service the big players had never felt it necessary to provide before. With the new export arrangements for the US coming into place from Thursday week, they are looking to Meat New Zealand to ensure that whatever quota allocation method is finally put in place, it delivers the very best results from reduced export volumes.

Considerable thought has already been given to the matter and the very day the quota levels were announced a letter went out to invite submissions on how they should be carved up among New Zealand companies.

A stake has been placed in the ground with Meat New Zealand's declaration that it believes the most appropriate and equitable method of distributing the quota would be on the basis of companies' total lamb exports to the US last year. It maintains a first come, first served, basis of allocation would lead to an undignified scramble.

And it rejects the share of national kill formula applying with lamb sendings to the European Union because a different set of meat company players is involved. The Meat Industry Association is unsurprisingly relaxed about this approach. But the debate is yet to be had around its boardroom table as to whether the quota should be distributed on the basis of past performance in the market either by volume or value of exports, or reckoned on the share of total production as it is with the EU market.

Federated Farmers meat and wool chairman, Chris Lester, says farmers are likely to favour the use of the value of exports in deciding quota. But making no provision for new entrants could be seen as discrimination, he believes. The end result is likely to be little development of the US market over the next three years, which of course, is exactly what the US wants.

* Glenys Christian can be contacted on email at glenys@farmindex.co.nz