Brian Rudman: National action needed to fill the glass

While the move to freeze prices appears generous, milk is still unaffordable for many families. Photo / Thinkstock

Milk monopolist Fonterra's decision to freeze domestic milk prices for the rest of the year might have been a good public relations stunt. But it fails to confront the problem of getting "our best single food" to those who need it most - in particular, our poor youngsters.

If it's already unaffordable for many families, what difference does locking the price of milk at what Statistics New Zealand noted in the January 2011 Food Price Index, is "the highest level recorded" make. That is after a 9.3 per cent rise in price over the previous 12 months.

But before we start beating up on Fonterra or the farmers who are basking in record export receipts, it shouldn't be forgotten that an "unaffordability" crisis is not a recent occurrence, but really dates back to 1976 and the lifting of government milk price fixing, and to the 1985 abolition of consumer price subsidies for milk.

The retail price of milk doubled in February 1976 and three years later went up another 50 per cent. Between 1980 and 1982, the retail price doubled again. Since the late 1980s, after adjusting for inflation, the price of milk has plateaued.

Statistics New Zealand calculates that in today's dollars, the equivalent of today's 2-litre pack of milk would have cost $1.75 in 1979, $3.43 in 1989, $3.84 in 1999 and $3.29 in 2009.

The old era of cheap milk dates back to 1943 and the government's decision to appoint a Milk Commissioner to design a system of getting good quality milk to every household at reasonable prices. A milk board was set up, overseeing 44 district milk authorities, which set producer and consumer prices.

A government subsidy was paid to cover the shortfall between the two. A network of home delivery milk vendors was also created to ensure every household had access to this vital food.

On top of that, between 1937 and 1967, milk was delivered free to schools daily.

There's no appetite these days for a return to the regime of regulation and price setting that then prevailed, but we could well learn from the politicians of the 1930s and 1940s, who saw the public health value of getting milk to every citizen.

In a recent paper on "Global influences on milk purchasing in New Zealand", University of Otago scholars Moira Smith and Louise Signal sum up the dietary crisis among our young.

"For children, milk is the predominant source of dietary calcium but only 38 per cent of children consume milk daily and 34 per cent weekly. Disturbingly, 17 per cent reported they did not drink milk at all, or if so, less than monthly." The worst affected are the poor, of which Maori and Pacific peoples are over-represented.

The authors note that non-milk drinkers, turn to cheaper "fizzy drinks" leading to health problems such as obesity and rotting teeth. They also suggest we join Australia and European Union countries by exempting basic foods, including milk, from GST.

A more radical move would be to borrow from the wisdom of our elders, and reinvent the milk programme for schools. In doing so we would not so much be looking backwards, but be joining with the 27 countries of the European Union which has a thriving and expanding school milk programme across the continent.

In the 2007-2008 school year almost 300,000 tonnes of milk was distributed to schools, funded by EU subsidies of more than $98 million. Since then the programme has been expanded to include secondary schools and the product range has expanded from milk to other dairy products, including cheese and yoghurt, flavoured milks and buttermilk.

In November 2008, the EU agreed to implement a school fruit scheme as well, as an important tool in fighting the epidemic of child obesity. Fruit and vegetables are seen as playing a protective role in combating heart disease, cancer and diabetes.

The Otago researchers note that rising obesity rates and incidences of diet-related chronic diseases are a similar problem in New Zealand, particularly among the poor, and "may be reflective of their poor dietary profile and inability to meet recommended intakes or guidelines".

They write that obesity rates in adults doubled between 1989 and 2003 and currently 30 per cent of children are overweight or obese.

"Nutrition-related risk factors account for a substantial proportion of the mortality and chronic disease burden and nutrition is second only to smoking as contributing to premature mortality."

In the light of such statistics, might it not be a good public health move to follow the European example? Building healthy children for the price of a pottle of yoghurt or a glass of milk a day sounds like a good investment.

And with an order like that, Fonterra could surely come up with a good price that doesn't upset either the farmers, or our trading rivals in Europe and elsewhere.