Liam Dann: Why aren't food prices an election issue?

Vegetables and butter have been the biggest risers in the consumer price index this year. Photo / File

Food prices hit fresh highs in August. It was a continuation of a trend that has seen big spikes in dairy and fresh produce, running in stark contrast to general levels of inflation for consumer goods and wages.

Almost everything rose more than the general level of inflation. The only notable falls in price were for energy drinks and pork, a combination that's hardly likely to impress health activists.

The rising prices also represent the continuation of a hot topic for business columns this year - almost as hot as housing. You only have to post something on social media about the price of butter, or kumara, or a cucumber and that's the rest of the afternoon gone.

So it's a mystery to me why food prices haven't been in the game as an election issue.

Addressing underlying reasons why food costs relatively more in New Zealand than many other countries is complex, to be sure.

But so, too, is housing and many of the same issues apply.

Both have supply and demand side problems and solutions. There are heated debates to be had about taxes, land use and zoning.

The knee-jerk public response - particularly around dairy prices, where New Zealanders seem to feel a sense of cultural ownership - is that Government needs to intervene in the market and restrict prices.

That's a pretty ugly solution for a major party. So perhaps that is behind a reluctance of Opposition politicians to be standing in supermarkets shaking fistfuls of butter.

This is a free country and those working hard and taking investment risks have a right to charge a market rate.

We need to be encouraging more people into production of quality food for domestic consumption.

The last thing we want to do is punish them.

However, food supply should also be viewed as an issue of national significance.

Government could a play a significant role in making food more affordable even with a light-handed regulatory approach if it took the time to co-ordinate its strategy across the entire value chain.

Removal of tax on food is a less heavy handed solution but is still difficult.

The Maori Party advocates this on milk and fresh fruit and vege. NZ First is less specific - talking about food, or basic food.

The Opportunities Party recommends a three-tiered tax system for foods that are grouped in to good, neutral and bad categories. Red foods cop taxes additional to GST, orange foods are neutral and green get tax credits.

Labour had a GST removal policy too but removed it under fire from tax experts who argue administration is complicated and leads to all sorts of loopholes.

As Top's Gareth Morgan would likely argue, just because something isn't easy doesn't mean you shouldn't do it.

Horror stories about the complexity of food classifications in Europe and Australia make good reading but need to be weighed against the great good that policies may achieve.

Still, it's a tough one for major parties on the campaign trail.

Land use is another matter.

Central and local government already set the rules and rates around land use.

Right now there is a risk that in the rush to green light new housing areas we are actually going to reduce horticultural land.

With all the fuss about water and peak dairy, there is a case for a comprehensive government review of land use in this country.

The average Kiwi doesn't really need to eat much more dairy but we do need to eat more fresh fruits and vegetables.

Pricing of locally produced vege spikes to ridiculous levels because of bad weather. Which suggests we are too reliant on too few areas for production.

Rainy seasonal excuses start to wear thin because wet weather events are so regular in this country. New Zealand is wet and probably getting wetter - depending on the rate of climate change.

Obviously we're an agricultural export economy which rises and falls on the market price of food commodities. The idea that rising food prices are good for our economy is something of a mantra for exporters.

We're paying more for butter right now because it is back in fashion in Europe and the US and the price has spiked. That's boosting national earnings.

But extrapolating the market price argument, if dairy or meat demand spiked so high that farmers could charge 100 times more for their food in Europe and China than in New Zealand then locally produced food would be out of reach to Kiwis.

I guess we'd all have to eat cheaper lower quality imported food.

In fact, at the poorer end of the social spectrum this is already happening - with costly health impacts.

Rising global food prices can't be unambiguously good - at some point the public will expect some government intervention.

It would be better for a major party to tackle the issue intelligently now.

Then there is the retail end of the food chain.

Examples abound of Kiwis finding New Zealand dairy and wine on sale in Europe at better prices than it sells here.

Perhaps that's less to do with export pricing and more to do with competition in supermarkets.

Regardless, it's another piece of the puzzle and one that could be the subject of Government attention beyond the Commerce Commission's usual brief.

We've seen National launch an inquiry into petrol pricing. Why not food?