Dairy Industry – Why NZ Is a Leader?

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NZ is a highly developed and economically stable country, with all the industries being at the top level of the world market. Specifically, agriculture occupies an important place in the country economy. Agrarian products account for about half of the total exports of the nation. At the same time, most branches of the industry are characterized by high efficiency, wide introduction of high-tech technologies, and a special approach in relations between the farmers and country. Everything is transparent and modern technology based.

Major Industry Developments

The direction of agricultural sector development has been determined by the government’s gradual reforms and acts, which resulted in the formation of a special agricultural structure. In many respects, it greatly differs from the systems adopted in other developed countries and determines the successful development of the agrarian complex in the state. NZ was always targeted towards industry developments, equipment modernization, and product quality improvement.

During the last few years, the industry has become the largest source of export earnings of the country. This is associated with the high demand for dairy products in the world, as well as high prices in the global market. This fact has stimulated New Zealand to cattle breeders and switch from raising sheep to cows. Over the last 10 years, the quantity of cows grew by 28%. This has made a great contribution to the industry development and profit increase.

The share of New Zealand in the world dairy market reaches 33%, with 95% of the raw material being exported as cheese, butter, and dried products to almost 160 nations. On the top of that, the state supplies almost half of the world’s total milk powder since cows produce about 400 kg of dry milk substances per head in a year. The biggest NZ dairy company is Fonterra. It produces around 87% of the milk and is the fourth biggest dairy company in the world, based on the production scale. The company unites 11,400 shareholders. Apart from processing raw materials and selling them with an added value, it is also an effective export instrument.

Taxes in the NZ Dairy Industry

The government of NZ does not directly participate in marketing or pricing of any agricultural products. The policies are completely dependent on market fluctuations, with all the risks considered by the farmers. Instead, the country authorities in the agrarian sphere are limited only by the collection of taxes on meat and milk. All the funds are used for carrying out research and development that make a great contribution to the improvements of the livestock sector as well as the setting of rules for production protocols and requirements. These are considered as the main standards for trade partners of the state.