4 May 2007
Speech

Speech to the Northland Pastoral Farming Development Group Conference in Waitangi, including pre-Budget announcement of funding for rural communities.

In my job I am lucky to see all New Zealand’s countryside. You can’t help noticing how this country varies from place to place, how the land changes colour and the soil looks different. When you come here and drive through Northland you notice the soil looks very different to other parts of the North Island. The pastures and soil, the hills and rivers are different to the Waikato or Taranaki. Or my home region of Canterbury for that matter!

And so the farming challenges are different. If you come here as a holiday-maker you love it - the region is warm and sunny. If you come as a farmer you probably enjoy the lifestyle more than any other part of New Zealand. But from a pastoral production point of view the region also has its challenges.

Every region has farming challenges. In my home of Canterbury - as elsewhere - farmers have to worry about their stock getting snowed in during the winter. You don’t have to worry about that in Northland!

In Marlborough, growers have dealt innovatively with long, deep droughts. In some places pastoral producers are competing for land with a rapidly growing horticultural industry and with lifestyle land developments. Everywhere has challenges.

But there are usually swings and roundabouts. The important thing is not whether things are better for one thing, or worse for another - the real test is how we meet the challenges we face and adapt to them.

We all know when it comes to people, it is not the natural gifts and talents you are born with that make you who you are - it is the choices you make about what to do with your talents. The same is true of us as a society. The true measure of our character is how we meet our challenges and build on our advantages.

If we are going to make the best use of our strengths, then we need to know what they are and where our opportunities lie. So farming needs a good scientific base of analysis about the most suitable crop for the soil and climate.

In Hawke’s Bay, for example, there is a small area of very stony, dry and gravely land that as recently as 1990 everyone thought was almost useless. A couple of factories sat on it, but it wasn’t an ideal industrial location. Farmers couldn’t get much to grow there and grazing it was a test of skill.

Then someone tried growing a variety of red wine grapes and they developed into a quality crop so quickly that by 2001 they had established the Gimblett Gravels group of wineries. They’re using the special gravely soils and unique climate to create a high quality international red wine brand. It’s producing a quality of wine that experts are saying is as high as the famous red wines of Bordeaux in France, and which can command a premium in export markets around the world.

It turns out, when the soil and climate was matched with the right crop and the right farming expertise, the land was not worthless. Done right, they are turning it into a goldmine.

Not every piece of land is going to be suitable for growing the grapes to make beautiful red wines. But the lesson for our agricultural production is clear: Better understanding of unique climate and soil in an area can make a crucial difference to the value of the land and to the returns from it.

Here in Northland, there are unique challenges. It’s up to us to identify our strengths and build on them. It’s up to us to find where we have our advantages and where we need to adapt. Northland has unique characteristics that need management and scientific study unique to this region.

Northland is subtropical. Winters are wetter; Summers are warm. The same warmer temperatures that branded the region the ‘Winterless North’ mean pasture growth is higher in the winter months. Drainage is tougher and there is a consequential risk of erosion. Compared to other regions, pasture production is higher between May and August and then has a lower peak in spring. Kikuyu grass has different pasture characteristics to the rest of New Zealand.

Different is not necessarily better or worse. When scientists looked at this region as part of the Northland Pastoral Extension project, co-ordinated by this group (the Northland Pastoral Farming Development Group), it found: “Northland farm production can be as high as anywhere in New Zealand.”

It also found a single recipe won’t be right for all Northland farms. Climate and soil is variable, so you need to know your farm’s characteristics and change your management to suit.

I acknowledge that a response that is adapted at the local level is harder to do than it sounds. To pull it off, it requires you to come together to work in partnership to develop research and knowledge, and share it. Then you have to be flexible enough to adapt the gains you make for the benefit of individual farms.

You’ve done that here through the Northland Pastoral Farming Development Group. I am delighted to see the collaborative regional approach you have adopted. I congratulate the leadership of the Northland Beef Council and Enterprise Northland in establishing the Group. Regional co-ordination and partnership from the Sustainable Farming Fund, the Landcare Trust, Dexcel and commercial companies have delivered a useful programme of work. It has provided a launching pad for further co-ordination and partnership to get the best from the resources and money we put into research and development.

We can see the benefit to the region and the return on the investment to date reflected in strong support for events such as this one. A library of Northland-specific production resources has been developed as a direct result of this effort. It’s available from Enterprise Northland.

Our problem in the past was the gradual movement of science resources in a way that didn’t help Northland. And some existing research was not easy to access. Now every producer in Northland has this information available to apply to their businesses.

I am encouraged that the benefits of your work will extend far beyond the regional Northland boundaries. As the effects of climate change increase, other regions will be faced with their unique challenges Northland has to deal with today: More wet soils, and conditions suited to tropical grasses like kikuyu. Kikuyu is moving south and its spread will have major implications for regions like Waikato and Bay of Plenty. So the work you do here is important to our overall efforts to adapt to climate change.

I have been coming to Northland for years - actually, so long and so successfully, I've been done the honour of being appointed an 'honorary citizen of this region' - saying we need all our regions to be successful if New Zealand is to be successful.

And there is more to that message: We need our agriculture to be successful.
It is the backbone of our economy. More than two thirds of all foreign exchange earnings come from primary industries. A lot of people don’t realise this, but our primary industries are actually becoming more, not less, important to us.

The contribution of agribusiness to New Zealand’s economy has risen from 14.2 percent of GDP in 1986, to seventeen percent today. Our primary industries are so important to our economy that we need to keep them growing, and to build on our competitive advantages.

For the foreseeable future, only our primary industries will have the scale, global networks and sophistication to develop the global businesses we need, if we expect to rejoin the first rank of the world's economies. We need our agriculture to be successful, we need our regions to be successful, so we need agriculture to be successful here in Northland.

We've always been good at growing raw products in New Zealand, compared to other countries. Our climate is generally agreeable and we have ample pastoral land. But other countries have sunshine and rainfall as well. What set New Zealand apart from late in the nineteenth century was science and innovation. We introduced grasses that better nourished livestock and we pioneered refrigerated shipping.

These innovations changed the face of New Zealand industry and helped to secure a hundred years of prosperity. The use of new seeds improved yields. The use of new transport techniques opened international markets to us, so we began to sell products like meat and dairy, where previously we had mainly grown only wool.

Even many of our most successful international manufacturing businesses grew out of our primary sector. The Gallagher Group, for example, moved from electric fences, to animal management products, to sophisticated security, tracking and tracing products. It now operates in 130 countries globally.

CWF Hamilton, our state-of-the-art jet boat engine manufacturer, started out through the experiences of an innovative farmer operating in the South Island's stony rivers and was developed with know-how developed on his family farm.

But the most important innovation in New Zealand industry has come from our continued investment in science and research. 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 high tech compared with a cell phone or computer. But there is just as much science in their production.

Knowledge sets our primary production apart. It is a source of better yields, better processing and new products. And in the future science will become even more important.

Much of our edge - our source of value - will come from our excellence and our science-based innovation. We won’t get far competing as the lowest cost producer. We are already the lowest cost producer of hardly anything. New Zealand is competing against many countries which have poor labour protections and wage levels. There is no future in fighting for shelf space on price alone with these countries.

We will only compete with a knowledge advantage that extends from the analysis of the soil and climate and the choice of the right crops and management techniques, to the development of higher value products capable of commanding a premium in international markets.

Investment in science is critical to maintaining the competitive advantage of our land-based industries. Investment in the well-being of our rural sector is also extremely important. It is a key concern of this Labour-Progressive Government.

That well-being has been challenged in recent years by some extreme weather events, the most recent, of course, being in Northland. With a changing climate and more extreme weather predicted, local capacity to cope with such events will be increasingly important.

So I'm very pleased to be able to announce that in the up-coming Budget rural communities will benefit from an allocation of $2.3 million over the next four years. It will be used to develop local capacity to respond to adverse climatic events and to assist with risk reduction and readiness issues.
This initiative complements the review of the On-farm Adverse Events Recovery Framework, which has been revised to provide certainty to affected individuals, families and communities over the nature of support they can expect from central government. Certainty comes from rules that are clear, transparent and fair.

The Framework ensures that Government support is given in such a way as to strengthen individuals' and communities' primary responsibility for risk management and preparedness. Those with good risk management plans in place are better placed to recover from the effects of adverse events when they do occur, so it is important that we don't discourage personal responsibility.

Because individuals do have a responsibility to take all reasonable steps to look after their families and their assets, it is unrealistic to expect that the Government should always be an insurer of last resort.

In major events, where it is beyond the ability of the local community to manage, the Government will step in even further. In other words, if the wider regional community and economy are at risk, as they were following the February 2004 floods in the Manawatu, Wanganui and Rangitikei, the Government will provide extra recovery measures.

Normal Task Force Green and Enhanced Task Force Green assistance will continue as before. This has been very successful and useful for many farmers for clean-up and repairs, and we remain committed to making sure that family welfare needs are also met. Depending on the scale of the event, that can include assistance through Inland Revenue, Rural Assistance Payments or New Start Grants.

This assistance will target restoration of uninsurable damage to infrastructure, pastures, crops and forestry plantations. Individual businesses will receive assistance at a rate of 50% of qualifying restoration costs – a threshold of $10,000, or 10% of qualifying costs, and a cap of $250,000 will be applied. These Special Recovery Measures will assist an affected regional economy to get back on its feet quickly.

The primary production sector has always had a strong risk management ethos, but there are further ways to strengthen the ability of rural communities themselves to respond to and recover from floods or other natural disasters. The Labour-Progressive Government recognises the importance of Rural Support Trusts, which play an important part in providing response and recovery capability.

This Budget provides $2.3 million over the next four years to support work that will strengthen the existing Trusts and new support organisations. The intention is to have an effective organisation in all regions. While they would be largely autonomous, we would like to see them linked nationally, particularly in sharing experiences and best practice initiatives
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From what I know of this region, there is plenty of the spirit that brings strength to a community. Northland has particular challenges to pastoral production that need science and management adapted specially for the conditions you face.

I congratulate you for the initiative you have taken in finding those solutions.
I congratulate you for making it available. And I will come back and celebrate your success as you adapt the science to mutual advantage.

And in closing I want to recall a story I was reminded of when I was thinking about the beautiful landscape and climate we enjoy in New Zealand. As the story goes, when God finished creating the Earth he pointed it out to his angels and said, "Look, I’ve created Earth. It’s my greatest work yet and it's going to be a great place of balance. There’ll be freezing polar ice caps and melting Pacific Islands. There’ll be vast oceans balanced by towering mountains.”

The angels were mightily impressed and one of them pointed down and asked, "what’s that one?" "Ah,’ said God. "That's New Zealand. There are beautiful mountains, rainforests, rivers, streams and beaches. The people are good looking, intelligent and hard-working. They will be known throughout the world as peaceful, creative and strong. It’s the most glorious place on Earth."
The angels gasped in wonder and admiration.

And then one said, "But you said there will be BALANCE!" "Oh yes," God replied. "Wait until you see what I put on the other side of the Tasman!"

ENDS

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