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Sutton: Royal Agricultural Society Conference

Jim Sutton: Royal Agricultural Society annual conference Wellington

Ladies and Gentlemen: I am delighted to be able to attend this meeting today.

The Royal Agricultural Society and the 106 A&P shows and more than 60 breed shows that you represent throughout New Zealand are part of the fabric of our nation.

Even in our increasingly urbanised country, we think of New Zealand as a rural landscape. More than 60 per cent of our export earnings come from primary industry. And ? especially since Shrek the Sheep achieved international fame ? New Zealanders overseas still run into sheep jokes.

As minister of agriculture, of forestry, for biosecurity, for rural affairs, and for trade negotiations, I have a broad overview of a lot of the issues affecting primary production in New Zealand.

The Government understands very well the importance of primary industry to the economy and rural communities to the country.

Since we were elected in December 1999, the Labour-led Government has worked to return services to rural and provincial areas. This has seen the Heartland Services centres set up, extra funding for rural nurses and GP retention, mobile surgical buses, and the extension of paid parental leave to seasonal workers who have been in work for at least 6 months, notably meat and dairy workers. I am hopeful that we can ultimately extend that to the self-employed, so that farming families will be able to get assistance as well.

On the business side, we're helping extend broadband internet access to people wherever they live. This will improve rural young people's education, but also the efficiency of farm businesses.

Since subsidies and other taxpayer-funded supports were removed in the mid-1980s, agriculture has responded dynamically to market signals. It has gained significantly more productivity that the rest of the New Zealand economy. Farmers and other agricultural producers have seized opportunities, adapted new technology, and been highly innovative.

For our country, and our economy, to achieve the way we want it to, this level of innovation must happen across the board. The Government has highlighted three "horizontal enablers" ? information technology, arts and creative design, and biotechnology ? as areas that, if they attain their growth potential, can add value across the broad scope of the New Zealand economy.

A report from MAF to the Growth and Innovation Advisory Board last year assessed the importance of primary industries to New Zealand's economic wellbeing and highlighted that while primary production has been extremely innovative, there is plenty more potential remaining.

This is where Royal Agricultural Society members play an important role. Demonstrating that potential and promoting it, throughout the A&P shows and the breed shows.

What was delivered in the latest budget - Budget 2004 - could not happen without economic success ? in significant part, that of rural New Zealand. Our primary producers ? people like you, together with those who supply you with inputs and prepare your outputs for sale ? provide about 60 per cent of all our country's export earnings.

This Budget included measures directly targeted at primary production such as the continued increase in biosecurity funding, up another $46 million over the next four years. That makes a funding increase in biosecurity baseline funding of 57 per cent since the Labour-led Government was elected in November 1999.

Funding also increased for trade negotiations with China and Thailand and for scientific research and development.

More broadly, this Budget was one of growth and opportunity, balancing economic and social investments. This budget will take New Zealand ahead ? it is good for families, and good for the economy.

It's a budget for getting New Zealanders into work and making work pay. It is about providing fairness and security for low to middle come New Zealand families

We are making significant extra investments in education and health. Knowledge and health are pre-requisites for economic performance.

The budget provides for close to half a billion dollars over the next four years for directly strengthening economic performance. The investments include developing our export markets, increasing our R & D spend, and attracting quality offshore investment.

We are increasingly looking for skills and the people with them to continue the innovation in our industries, especially in our primary industries. The Royal Agricultural Society is an important participant in this. The local A&P show is a showcase for new technology, encouraging the development of skills and highlighting and celebrating excellence in all fields.

Like the Royal Agricultural Society, this Government is trying to promote excellence and to develop an environment where people are encouraged to develop their skills and highlight winners.

The work that we do in the domestic arena, alongside your own work, is important.

Also hugely important to us all as primary producers, is the work we achieve overseas in trade negotiations.

More than 80 per cent of all the beef, lamb, dairy products, and other primary products grown in New Zealand is exported to overseas markets. Whatever barriers to this trade that we can reduce can have huge impacts on the livelihoods of everyone in New Zealand.

The last big round of international trade talks, the Uruguay Round, was the first to include big changes in agricultural trade.

Research carried out by MAF on the quantitative benefits of the last big round of international trade negotiations, the Uruguay Round, showed in the single year of 2000 (the year that many of the gains of the Uruguay Round kicked in) the beef, sheepmeat, and dairy sectors gained about $590 million from product price and volume increases in the major markets of the United States and European Union.

That works out to an average increase in earnings for each sheep, beef, or dairy farmer of $11,500 a year. And that was from changes in our trade with just two of the 146 members of the WTO.

Combined MAF and MFAT research has assessed the overall benefits from the Uruguay Round as at least $9 billion over the 10-year implementation period of Uruguay Round changes, and about 17,600 additional jobs throughout our economy, including 2000 in agriculture in particular.

In addition to the $9 billion of gains from those measures, New Zealand exporters have also gained from firmer trade rules, a strengthened disputes settlement system, and the dynamic effects of a world economy stronger than it would have been without the Uruguay Round.

But the Uruguay Round was only a toe in the door, for agriculture, which is still one of the most heavily protected sectors in the world.

The Doha Development Round has even greater potential. Next month, there is a significant meeting in Geneva, of ministers and officials, where I hope we can forge agreement on the way forward, towards successful completion of the round. I promise you that Team NZ ? one of the very best in the business -will be doing its best there for rural New Zealand.

So, the World Trade Organisation is our main priority. However, it's not our only priority. Plan B is to construct a network of progressive regional or bilateral trade agreements.

The Government is also putting significant effort into such trade negotiations.

Public consultation on a proposed trade agreement with China ? its first with a western nation ? is underway, and I hope to see negotiations start early next year. Formal negotiations with Thailand on a trade deal began earlier this month, and it's anticipated these could be completed by the end of this year.

We are still working on a "Pacific 3" trade deal with Chile and Singapore, and that's likely to be "P4" by the time it's completed, with Brunei wishing to join, and as recently as this week, and enquiry from still another Pacific Rim economy.

Discussions are being held with Mexico about a trade deal. We are continuing to lobby for a trade agreement with the United States, and talks are still pending with Hong Kong. After several years of effort, we have a potential breakthrough for AFTA-CER. Other partners are still in the wings.

New Zealand is a trading nation, and we are dependent on access to other countries' markets for our well-being. I can assure you that this Government is doing everything possible to ensure our producers continue to have that necessary access and that it is improved.

Contingent in that happening is a commitment by New Zealand producers to continue to produce safe, high quality products ? in a mix continuously responding to the evolving tastes of the world's most discerning customers.

I know your society has a commitment to that, through the A&P and breed shows you operate.

Ladies and Gentlemen: the Royal Agricultural Society has a proud history. Thank you for your efforts on behalf of all New Zealanders, and I wish you every continued success in the future.

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