WELLINGTON - The chairman of Meat New Zealand, John Acland, says subsidies announced for United States lamb producers are unlikely to boost the competitiveness of US lamb, because the payments are politically based.
"The package details suggest they are the outcome of a political negotiation between the Administration and the sheepproducers, rather than the result of an objective analysis," Mr Acland said.
The US confirmed last week that it would give $US100 million ($194 million) in aid to its sheep farmers, adding weight to New Zealand's view that the Americans were illegally protecting their industry.
The assistance is aimed at protecting US sheep farmers from Australasian competition and ties in with controversial tariffs imposed on lamb imports from New Zealand and Australia last July.
More than half of the assistance, to be given over three years, will go directly to farmers as grants or loans, while the US Department of Agriculture will also guarantee $US5 million a year of lamb purchases.
Only $US5 million has been earmarked for efforts to market and increase demand for American sheepmeat and boost the US lamb industry's competitive position.
Lamb meat from Australia and New Zealand accounts for approximately 95 per cent of all lamb imported by the US and the two countries have argued that US producers are losing ground because they have not kept up with technology.
"Meat New Zealand is opposed to agricultural subsidies. But we have argued all along that the real problem faced by the US industry is its uncompetitiveness and need for structural adjustment," Mr Acland said.
"[This] is not the way to improve quality and competitiveness."
