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Jim Sutton speech: Farm Forestry Association

Jim Sutton speech: Farm Forestry Association annual meeting, Wellington

Ladies and Gentlemen: It is my pleasure to join you today.

When one says ¡§Wellington¡¨ all kinds of pictures spring to mind. Generally farm forestry is not one of them ¡V pine woodlots on Lambton Quay or alternative species on the Terrace don¡¦t sound quite right. But there is more to the Wellington region than just the capital.

The Wellington Branch was formed in 1977 with a northern boundary at the Otaki River. Unlike a lot of other branches of the Association, the Wellington branch includes many urban-based members. So this year¡¦s National Conference highlights the ¡§urban connection¡¨.

The branch has a handful of full-time farm/foresters but many members work in town and have forest blocks near Wellington or are simply interested in farm forestry activities. These members mostly have fulltime employment elsewhere, but include some in forestry-related business.

With all the news about the world situation and how the strength of the Kiwi dollar against the greenback is affecting returns to forest growers and processors, it is nice to hear some good news from time-to-time. In the November issue of the Farm Forestry Association¡¦s Tree Grower magazine there is an article by Don McIntyre on maximising value from small areas in trees. It is a cracker.

Don planted, in his words, ¡§unproductive gully sides¡¨ on his Shannon farm and about 30 years later the stumpage was over $33,000 from only 110 trees on two-thirds of a hectare. That would equate to more than $49,000 per hectare. Not only that, but he¡¦d had some interim income from production thinning and a heap of posts for farm use.

Based on the costs and returns quoted in the article, and taking the land as being for ¡§free¡¨ ¡V it was, after all, ¡§unproductive gullies¡¨, so probably a liability ¡V it would equate to an Internal Rate of Return of more than 11% pre-tax. Not that farm foresters are all that interested in IRR, but accountants and bank managers tend to be. Even with a cost of land included, it is still a healthy 9%. So who says forestry doesn¡¦t pay? It is an article that should be quoted time and again. The Farm Forestry Association cannot have a better way to advertise the advantages of forestry, or of belonging to the Association, than publishing articles like this. It would be a good idea if the Association encouraged other members to be as forthcoming about their harvest revenues as Don was, and to run such ¡§case studies¡¨ in every edition of the Tree Grower. And as more of the Associations members start harvesting, more examples should be coming available.

Last year, the Prime Minister launched the Growth and Innovation strategy, focussing on three sectors which had the potential to affect all aspects of our lives ¡V what the policy wonks call ¡§horizontal technologies¡¨.

These were: information and communication technology, arts and creative industries, and biotechnology.

We reckon that the key ingredient of economic growth is innovation.

The Growth through Innovation framework documents a broad consensus that has emerged over the past two years as to what needs to be done to develop New Zealand¡¦s innovative potential.

To do that, the Government is committing to implementing policies with more emphasis on: „h Enhancing our innovation framework; „h Developing our skills and talents; „h Increasing our global connectedness; and „h Focusing interventions in those areas that can have maximum impact.

The Government has chosen to target its innovation initiatives initially in biotechnology, ICT and the creative industries. These are all areas which, if they attain their growth potential, can have a significant influence on the broad scope of the New Zealand economy.

Obviously, these three sectors are not the only sectors we want to see innovation and growth in. For our country, and our economy, to achieve the way we want it to, innovation must happen across the board.

Ladies and Gentlemen: ICT, biotechnology, and the creative industries are not about to displace dairy, forestry, and tourism as the main foreign exchange earners of our economy. But they are three sectors of enabling technologies that are going to drive change in those sectors and many others to help New Zealand lift its performance.

The role of farm foresters in this is significant.

Agriculture¡¦s rate of productivity increase has exceeded that of many manufacturing and servicing sectors in recent years, and the primary production sector is well positioned to capitalise on the potential of biotechnology. The Government has worked hard during the past parliamentary term to investigate the best ways to build partnerships and capacity, and has invested in regional development to make sure that all citizens have access to both training so that they can develop new skills and to new technology so they can adapt that to lift their productivity and living standards.

We have programmes like the modern apprenticeships scheme. There will be 6500 modern apprentices this year, young people developing skills and knowledge, in a wide range of areas.

We have programmes like the Heartland Services Centres, bringing back government agencies to areas that once had them and lost them and in some cases to areas which never had them at all.

And we have programmes like Project Probe, where broadband internet access is to be rolled out throughout the country, so that rural citizens can get the same sort of access to the Internet as their urban cousins.

Innovation in rural communities is also being promoted through the Sustainable Farming Fund, a Labour Government-initiated scheme.

The fund allocates grants to community-supported projects that improve the social, environmental, and economic sustainability of rural communities. We¡¦ve seen some exciting results and there are many more to come.

Your organisation has taken good advantage of the Sustainable Farming Fund. Its manager Kevin Steel, who is here tonight, tells me that there are 15 forestry projects which have received SFF money. That¡¦s $1,327,000 of Sustainable Farming Fund money in projects worth $2,730,000 in total.

They¡¦re doing good work.

Several have been completed and have produced useful reports which I commend to your attention. These are the ¡§Trees for profit and soil conservation¡¨ and the ¡§Blackwood: a handbook for users and managers¡¨. There is also the information leaflets produced by the ¡§Expert support to enhance pastoral farming through farm forestry¡¨ project team.

I said in September three years ago, when the fund came into existence, that it was the most important measure announced for farming and rural communities in that year's Budget. I haven¡¦t changed my mind about that.

There have been 184 projects funded since it began.

That¡¦s 184 communities who have been able to advance their economic, social, and environmental sustainability through research co-funded with the Government.

They have resulted in practical help for farmers, growers, and other producers such as yourselves.

I am pleased with the project as a whole. And tonight, I am delighted to be able to tell you that I have been successful in securing the money to ensure the Sustainable Farming Fund¡¦s continuation.

I have the permission from senior Government leaders to make a pre-Budget announcement: the Sustainable Farming Fund has been allocated $10.6 million a year for the next three years.

This will ensure its survival.

There will be advertisements running in newspapers from tomorrow advising people there will be a new round of allocations being made with applications due in by June 6. This will give rural communities throughout New Zealand the time to put together applications.

You will need to take time to get your application ready ¡V the fund¡¦s approval process is a rigorous one, and only the good applications get through.

Once you get approval, it¡¦s not all smooth sailing either. There are regular reports due and people must account for the funding at specified intervals. This is taxpayers¡¦ money, and these days, rigorous accountability is required. I know there is some controversy about the auditing one forestry Sustainable Farming Fund project is getting. This audit is necessary to allay any public concerns about what public funds have been spent on. I make no apology for that. What the public¡¦s money is allocated for must be what the money is spent on.

Ladies and Gentlemen: I would like to commend your association for its wholehearted involvement in the Government¡¦s drive to encourage innovation in this country. Through research and development ¡V and then the dissemination of the knowledge gained from that investment ¡V we can all do our work better. That is the whole reason for the Sustainable Farming Fund¡¦s existence.

Another area of public concern that involves your organisation is biosecurity.

You will have heard that during the past fortnight, there have been several incursions of new moths, ants, and mosquitos. While these unwelcome discoveries demonstrate the effectiveness of our monitoring systems, they also remind us that our border is not impervious to pests. Our response to the ever-increasing flow of travelers and freight is continuous system improvement.

The Labour-Alliance Government, and now the Labour-Progressive Government, is more committed to biosecurity than any previous Government. We spend more than $50 million a year more on biosecurity baseline funding than any previous government.

When foot and mouth disease was raging through Britain, we spent significant amounts of money to install soft-tissue x-ray machines at all international airports and to provide extra detector dog teams. That lifted screening of air crew and passengers from about 80 per cent to 100 per cent. In addition, all mail is screened.

We are still the only country in the world to do that.

There is still a need to address sea container biosecurity. We are not complacent about this. We are working to fix it.

A $1 million research project, commissioned by MAF, has investigated sea container biosecurity, and come up with several recommendations which we are working through now. I can give you a personal commitment that the Government is not complacent in this area, and that we intend to have tightened up biosecurity measures for sea containers by the end of this year.

This Government is more than just aware of the risks. We know that an established incursion by exotic pests and diseases would seriously damage New Zealand.

Thank you for your attention today, and I invite any questions.

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