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Dairy dives, tech to the rescue?

Prices for dairy exports have dived by over 40% since February.

Industry experts put this down to China having "stocked up" on a lot of product earlier in the year and now slowing its purchasing until that stockpile is used.

Really?

Might it not be that we've been selling the goose that lays the golden egg for far too long and, thanks to the ramp-up in dairy production within China, we're now finding that they no longer need to buy quite so much from us?

Of course I'm no dairy industry expert so I'm simply speculating -- but what the current situation does make very clear is the serious vulnerability this country has. We are, in effect, putting far too many of our eggs in a single basket.

Those eggs are our dairy exports and that basket is China.

We also seem to have a "left hand doesn't notice what the right hand is doing" situation presenting itself...

Chinese companies such as Shanghai Pengxin are gobbling ever-increasing chunks of New Zealand in order to create an end-to-end channel for the production and delivery of primary produce and although such acquisitions won't necessarily show as a loss on the export ledger -- the repatriation of profits back to China means that our effective net export receipts will be down.

China accounts for around 55%-60% of our milk-powder exports and the relatively sudden and significant reduction in demand might not be the short-term event that it is being portrayed to be.

Other markets, such as the Middle East, are also becoming very soft -- due to political tensions, conflict and the like -- with signs that this will get worse before it gets better (if it ever gets better).

The bottom line is that we have had over a decade to get onboard "the knowledge wave" and really ramp up alternatives to our traditional primary exports -- and to be honest, we've done bugger all.

We've talked the talk, thrown public money at silly ideas such as the MJP and presented politicians with the occasional photo-opportunity but there has been no serious attempt to really turn NZ into the powerhouse of hi-tech and intellectual property it really could become.

Even those organisations (such as Callaghan Innovation) that have supposedly been created as a mechanism for supporting hi-tech industries in NZ have turned out to be an old-boys network where the "schmooze" is more important than the science.

A key element of of support for independent sci/tech innovation used to be the good old DSIR -- which then became a group of CRIs before they were deleted and the money spent funding "NZ's Got Talent" and other dross.

When we find ourselves in a steep economic decline -- having sold our power generation assets, our laws, our farms and just about every profitable company in the country to offshore interests, I'm sure we'll find a way to blame everyone but those who are really responsible... ourselves.

There is an election coming and you have a vote. Use it wisely -- your own future and the future of the nation is in your hands.

The time for endless rhetoric about "knowledge economies" and "stimulating enterprise" in NZ is over. It is now the time for action -- before it is too late.

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