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Speech to Horticulture NZ's first annual conf,.

Hon Jim Anderton
Speech to Horticulture NZ's first annual conference

Speech to Horticulture New Zealand at the 1st Annual Conference, Sky City Convention Centre, Auckland

I'm pleased to be with you tonight. The people here tonight and the industry you represent are crucial pillars of our economy. New Zealand is dependent on our primary sectors for our economic wellbeing. More than two thirds of all foreign exchange earnings come from primary sector industries.

It's fashionable to think primary industries are declining in importance. But the facts tell a different story. Over the last fifteen years, agriculture, forestry, and related industries averaged productivity growth of 2.8 percent each year.

Other manufacturing industries achieved just 1.1 percent growth while the primary industries grew by +150%. From 1986 to 2002 the contribution of agribusiness to New Zealand's economy rose from 14.2 percent of GDP, to 16.5 percent.

The success of our horticulture sector is a top example of the way our primary industries are expanding. Since 1980 our horticultural exports have increased twenty-fold, from $115 million a year to $2.3 billion. It permanently employs fifty thousand New Zealanders, including downstream service industries. Another forty thousand find seasonal work in horticultural industries. Horticulture earns seven percent of our merchandise exports. During 2005, fruit, vegetables and flowers from New Zealand were sold to 108 countries around the globe.

Most of our exporters - including many in the horticulture sector had a tough year last year. But the overall picture, this industry's importance to New Zealand and its growth are something to celebrate. As we look into the future, our primary industries are going to be the most important sectors in our continued development.

We have competitive advantages. And we have a base on which to grow in the innovation, skills, global connections and scale of our primary industries.
Our primary industries are so important to our economy; we need them to be successful. We need them to keep growing and build on our competitive advantages.

I want to spell out the government's vision for where our growth will come from. The ripest opportunities are in the growing global demand for high-value products in high value markets. We are a small country a long way from any of our markets. No other developed country is as isolated. Consumer demand is changing.

We're facing rising competition from lower cost producers, and technical barriers to trade. Last week talks on the Doha development round of trade talks were suspended. So we can expect even more barriers to our products to emerge. When I visited Europe earlier this year, I discovered farmers were being paid to "maintain the rural landscape". I also found people talking about 'Food miles'. This is a way of accounting for the carbon usage of shipping goods across the world.

New Zealand products are already being singled out by this and we are having to demonstrate that our methods of production are climate friendly.
If we don't act, overseas markets are increasingly likely to penalise New Zealand producers for weaknesses in these areas. Fortunately we have a good story to tell about our environmental practice. We are better placed than just about any nation on earth to give overseas consumers assurances that they are purchasing socially and environmentally responsible goods.

This is why the Labour-Progressive government has been making significant investments in biosecurity. Our biosecurity strategy is based on the principle that we should direct our limited resources to areas where they will be most effective. It requires everyone to play their role in protecting our biosecurity - from raising public awareness to quarantine, to on-farm practices. And it is evidence based.

For example, we need to be clear that our import health standards are based on strong science. It would be at our peril to provide other countries with an opportunity to lock our products out of their markets. We know from our experiences with Australia over apples how crucial it is that decisions are based on sound science.

I can give you some examples of how the government is working to ensure that while we insist on evidence-based decisions - we are working to smooth the way to get evidence faster. New Zealand apricots have always been blocked from Western Australia due to Oriental fruit moth. Western Australia recently granted access for apricots to other Australian states that have the fruit moth, but were not able to agree on access for New Zealand apricots.

During a discussion with the Western Australian Minister for Biosecurity at a meeting in Australia recently, he told me that the prohibition on Apricots was not justified, and that they would resolve the prohibition within weeks. That was about three months ago, but I have been told that Biosecurity New Zealand expect an access agreement for apricots to Western Australia to be agreed by the end of next week.

Some growers have found it difficult to import new varieties with better yields or consumer appeal. High levels of quarantine are required to ensure imported material is free from damaging pests and diseases.

The government increased funding to Biosecurity New Zealand so it can develop manuals about the tests needed. The first will be for varieties of kiwifruit, blueberry seed and nursery stock. In future, the money will also be used to develop a testing service for plants in quarantine. In biosecurity, as in all our environmental care, we need to ensure we have world leading practice to stay ahead of the challenges coming on this front.

At the same time we have to confront the challenges of increasing competition in commodity goods from developing nations. Countries with rich resource bases such as China, India and Brazil are already adding value. They're moving up the supply chain to gain all the advantages they can. Our apple exporters, for example, have encountered very difficult market conditions.

New Zealand is competing against many countries, which have poor labour protections and wage levels. There is no future, however, in fighting for supermarket shelf space on price alone with these countries. In fact, we are no longer the lowest-cost producer of anything - nor should we aspire to be! It is not likely we will ever be able to get by on price alone. We need to differentiate ourselves better. We can only continue to compete by moving up the value chain.

Higher value production will result from our investment in science and innovation. Going back as far as the introduction of refrigerated shipping, we have always used technology to unlock potential on our land. Today we still depend on science and innovation.

The government and the industry have invested in primary sector science for decades. As a result, enormous scientific research and skill goes into producing high quality goods for discerning overseas markets. An apple or a lamb chop doesn't look like a high tech good compared with a cell phone or computer. But there is just as much science in their production. Our investment in innovation and science allow us to overcome our chief disadvantage - our distance from our markets.

Science and skills will help us to stay ahead of the game as world markets change even faster. The government is working alongside the industry to invest in the R&D we need. For example, the print company Jenkins Groups worked with crown research institute, HortResearch, over seven years to develop a ripeness indicator label, ripeSense. It changes colour as the fruit ripens. This is world-first technology that allows shoppers to choose fruit that best appeals to their taste.

The Foundation for Research, Science and Technology also contributed funds to help design and build printing machinery for the technology. The product could bring returns of between $NZ20 million and $NZ40 million over the next five years. The company says it will repay the government's investment more than five times over through tax revenue. The example shows how the government and industry working in partnership can benefit everyone. The product would not have been possible without the partnership.

Partnerships exist in a number of other ways. For example the government has worked in partnership with the horticulture sector to develop the seasonal labour strategy. Seasonal labour availability is a critical issue for the sector and I understand the strategy is working well. In the peak harvest season just completed there were no major shortages of seasonal labour. Yet unemployment is lower than any time since 1982. We developed a solution through immigration policy, industry promotion and grower preparation.

Another example of partnerships at work exists in the sustainable farming fund. It is a source of almost ten million dollars a year for sustainable farming projects. Examples range from floriculture to vegetables, new crops to well established crops, and small emerging industry groups like Arnica to large well-resourced groups like the pip-fruit industry.

One example was a sweet corn growing toolkit, which packaged science in a form that is accessible and useful to growers. Another project trials the use of steam as an organic treatment for black spot in pip fruit - one of the biggest problems for organic apples. Another project - this year - uses bees to deliver a biocontrol agent for the treatment of botrytis in berryfruit.

There is a lot to be gained from working together. Partnerships with the industry require a well functioning industry group that has the support of its participants.

I want to congratulate everyone involved with Horticulture New Zealand for the successful transition of this new representative body for the industry. The President, directors and Chief Executive deserve recognition, and so does the wider industry for supporting the new body. Setting up Horticulture New Zealand has given us the platform to grow a stronger partnership between the Government and the sector.

We need partnerships to work because we have a lot to do. If I leave you with one message tonight, it is this: The government is committed to working with the industry, unleashing the talents of New Zealanders and growing the success of this sector.

We are going to maximise our success by working together constructively on the challenges we have. We are all on the same team. We all want a prosperous and sustainable future for New Zealand. We are all reliant on our primary industries succeeding.

Small percentage gains in the productivity and profitability of the sector, repeated year after year, turn into a high standard of living across the board. We need to unleash our potential. We need to keep moving to new, higher-value markets and protect the valuable markets in which we have gained a foothold.

This is a crucial sector for New Zealand. We can lift New Zealand's economic prosperity fastest by lifting our performance in the primary industries. I'm committed to working in partnership with the Horticulture sector to overcome the barriers to faster growth. We have a lot of work to do. And I'm looking forward to getting started with you from today.


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