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Jim Sutton speech to Fed Farmers branch

Jim Sutton speech to Fed Farmers branch
Speech to Manawatu-Rangitikei branch of Federated Farmers,
Palmerston North
2pm, 10 May 2000

Ladies and Gentlemen, thank you for inviting me here to speak with you today.

This is the first Federated Farmers branch I have spoken to since the election. I have been appointed minister of agriculture and in general, I have found the sector to be in good heart.

Agriculture continues to be the cornerstone of the New Zealand economy.

We get a lot of fashionable flannel these days about the knowledge economy. But New Zealand farmers haven't just been talking about a knowledge economy ? they've been implementing it.

New Zealanders, especially those on the farm, are renowned for their ability to find solutions to problems and are renowned for their ability to adopt new technology. You know what to do with the famous number eight wire.

Certainly, knowledge is a key ingredient of progress in the modern world. But the smart business is to build on one's strengths. For us in New Zealand, much of the knowledge that will underpin our progress will be knowledge about and applied to the production from our land, our forests, and our fisheries.

It is the efforts of farmers like yourselves who have increased this country's earnings.

When we add up the total contribution of our land-based industries (meat, wool, dairy products, horticulture and forestry) to our overseas earnings, we end up with $13.3 billion this year and a projected $16.1 billion in 2003.

It reinforces my long-held view that our land-based industries remain the cornerstone of the nation's wealth and that a vibrant and internationally competitive agribusiness sector is vital to New Zealand's economic success.

The outlook is not all rosy, of course.

Wool is continuing to have its problems. The dairy industry is taking some time to sort out its future and a lot of heat, but not much light, is being generated there.

The Labour Alliance coalition government has, as promised, disbanded the Producer Board Project team. The shotgun is no longer to the heads of the various boards and farmers.

It is too soon to evaluate the outcome of all that angst caused by the previous National government, but this much I can say.

Kiwifruit and Apple and Pear have got reform packages largely of their own design.

They are perhaps somewhat awkward and transitional compromise solutions, neither the comfortable monopolies of old nor the red-blooded deregulation sought by the previous government.

But I am optimistic for them.

Our pre-eminent industry, dairy, is suffering, hopefully temporarily, from an apparent failure of nerve, or vision, or both. It is unclear at the moment just what is going to happen there.

Yesterday, the Wool Board announced the report by McKinsey reviewing its activities would now not be made public till the end of next month.

I am convinced that there is still a place for industry institutions, with the statutory powers to overcome the problem of free riding, to provide those services which can most effectively be provided collectively.

It is up to the producer boards now. If they can earn and maintain the support of you, their owners and suppliers, if they can persuade the Parliament that they are exercising their statutory powers in a way that is fair, and which serves the public good, they will be left pretty much unmolested to get on with the job.

But the issues that take up much of my time officially come under one of my other portfolios ? that of minister for trade negotiations.

Trade access liberalisation is vital for New Zealand agriculture. Trade access continues to be the biggest single problem in maximising returns for farmers.

While it is disappointing, it seems clear there is unlikely to be much progress in launching a new round of world trade talks this year.

There are many reasons for this. But chiefly it's because the key players ? the United States, the European Union, and Japan ? are not showing enough flexibility. That's both flexibility in their dealings with each other and with the developing countries.

The presidential election in the United States is a complicating factor.

I hope to visit Washington DC next month to take the pulse of the outgoing administration and the Congress.

Meanwhile, the agriculture negotiations mandated under the Uruguay Round are continuing. In Geneva this week, the chair of the special agriculture negotiating committee was finally selected. We hope the participants will get down to business at their next session in June.

There is a lot of work to do and also some doubt that real progress can be made till the broader round is launched.

We in New Zealand will continue to promote the concept of a broadly based round in the WTO.

Next month's APEC trade ministers meeting in Darwin will have this as a special focus.

In the meantime, the government is negotiating a closer economic partnership agreement with Singapore. Through a taskforce of eminent persons, we are actively exploring a link between the CER agreement of Australia and New Zealand and the trade agreement of the Association of South East Asian nations.

If those two agreements were linked, that would form a grouping with a trillion dollar economy ? that's a trillion US dollars.

Talk about those linkups, with ASEAN and even with Singapore, might seem like they have little to do with you and your farming.

But they are first steps to getting your products into the huge markets of Asia, markets which at the moment have steep barriers. During the past 10 years, New Zealand has been through a lot of pain lowering our trade barriers and cutting tariffs, which has made our domestic market more attractive and competitive and given greater choice to consumers.

Now, the Government has halted any further unilateral tariff reductions and we are working to encourage our trading partners to lower theirs.

We have said clearly that we are willing to do deals on the basis of reciprocity.

The global trading system works best when we all concentrate on doing what we individually do best and selling to others.

Think of it in a smaller context ? imagine if everyone here in Palmerston North tried to make everything they needed for daily life themselves. So they made their own clothes and shoes, they grew their own vegetables and kept a few chickens and sheep in the backyard. They made their own soap, paper, etc, etc.

It wouldn't take long before neighbours started doing deals with each other? Mrs Brown made great bread, so the Browns swapped bread with the Smiths, who made good shoes, and so on.

It is the same for nations. That's how the global trading system works. We all do best by concentrating on the things we do well.

We in New Zealand make great food. We sell it to other countries, which make things we want.

The fewer distortions there are in that trade ? the fewer tariffs or quota barriers ? the better.

That is what the Labour-Alliance coalition government is working for when we say we believe in free and fair trade.

Free and fair trade is not about putting New Zealanders out of work. It is about making sure your products get the best possible price and that you can sell as much of it as consumers want to buy without governments getting involved to stop you.

This government has a commitment to farmers and rural communities as a whole. We need to commit ourselves as a nation to building on, rather than abandoning, our rural and agricultural foundations.

Thank you for inviting me to speak to you today and I look forward to answering any questions you might have.


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