We should be very worried by the economic implications of the latest news from Wellington. Not the news that Europe is facing severe financial problems, or that China is investing far more money in Australia than it does in New Zealand.

What should be worrying us is that since the last global financial meltdown in the 1930s New Zealand's economic model is totally unchanged and the threat of our mid twentieth century disaster of poverty, hardship and war is again a possibility.

The heart of the problem is that our obsession with commodity trading of our land-based produce makes us more subject to the vagaries of international politics than would otherwise be the case. While it may be comforting to consider that we have been buoyed by this very commodity trade through the worst of the current global financial crisis, it is pertinent to consider the last great depression was also preceded by a period of rapid expansion in production, particularly in dairying, when the first commodity slump hit in 1921.

That boom period had been initiated by a shift in New Zealand's export focus from narrow extractive export industries (kauri and gold), and a single farm-based commodity, wool, to a three headed commodity monster, dairy, meat and wool. Similarly the current situation comes as a consequence of diversification of our commodity base to include fish, timber (plantation driven), horticulture, meat and dairy, but while there are a couple of new heads on the export creature, with wool eliminated, commodity trading remains the name of the game we play.

Our problem is not that we can't sell our products, but that we can't get enough for them to sustain a financially secure society. We were price takers in 1921, and are price takers in 2012, in spite of the fact that Fonterra is now one of the world's largest traders in dairy produce.

And within this fact lies the hardest evidence of our exposure to risk. Our biggest market for dairy is China, but in spite of China's strongest dairy sector being infant formula New Zealand participates only as a supplier of raw materials, while Fonterra's competitors such as Nestlé dominate that market sector through its ownership of strong brands. So New Zealand's dairy farmers and the country at large miss out on profits and greater market stability.

So when the figures come through from the Ministry of Primary Industries that our trade weighted index is predicted to fall 8.4% by March 2016, commercial pundits leap to the problem of a strong New Zealand dollar undermining our economic welfare. But the real problem is our commodity addiction, not the dollar.

While exchange fluctuations are a real issue for international traders, they are no more than a fact of life, like rough seas and political storms. Traders have been managing exchange rates since the first caravan set off across the Gobi Desert, and frequently make fortunes by doing so to their advantage.

To complain about exchange rates is to miss the point, especially when one of the most effective means of managing them is to maximise margins so that the fluctuation is a minimal proportion of the cost of trade.

As our particular Titanic races into the iceberg zone, there is another large dangerous object in our path, one that is considerably more frightening than the one that almost sank us in 1929: leverage. Farmers are more exposed to debt than they have ever been.

According to the Ministry, debt for dairy and meat farmers increased by 140% between 2002 and 2009.

In the latest forecast released earlier this week by the Ministry of Primary Industries, only one of our leading exporters, wine, trades in a product with maximum local value added. That is our problem. Until more is done to turn our century-old farm-based businesses into marketing lions, the whole country remains at risk.

The opinions of the writer are his own and do not necessarily reflect those of the publisher.