Hon Steve Maharey

Minister of Research, Science & Technology

19 June 2007 Speech notes
New Zealand Institute of Food, Science & Technology Annual Conference

Introduction

It’s a pleasure to be here to open the New Zealand Institute of Food Science and Technology’s annual conference. I would also like to extend a welcome to the overseas speakers at this conference, and to students and recent food science graduates.

Food science is one of New Zealand’s outstanding areas of research. Over the last year, one of our most prominent New Zealand science success stories has been HortResearch’s red-fleshed antioxidant-filled apple. I must admit that it’s been such a good story that it’s become overused, but that apple does show how powerful food science is at grabbing the imagination of the public. We need more such examples to help build an appreciation of, and passion for, science in this country.

The way to the heart is, as they say, through the stomach.

Food in New Zealand’s economy

Since the Labour-led Government came to power in 1999, we have made growing and transforming New Zealand’s economy one of our highest priorities. We’ve looked at design, biotechnology and information technologies as drivers of a high-value, knowledge economy, and supported these industries with policy, strategies and infrastructure.

Now these industries all contribute to our economy, but they are growing off a small base. We should not neglect the sectors that have been, and for the foreseeable future will continue to be, the major drivers of our economy.

The most important of these sectors is the food sector, which employs two in five workers in this country. It rules most regional economies. Generally, in New Zealand, if you don’t grow food, you’re in tourism, showing people places where you can’t grow food.

Look at these export figures. Food is half of the top ten exports from New Zealand. The fastest growing export is wine, and that has only just made the top ten. Dairy and meat remain vital, and fruit and seafood remain reliable despite difficulties over the past few years.

Looking closer at the top two – dairy has done tremendously well. What is important to note is that the fastest growing product of the dairy industry to 2004 is this “other” category at the top. That represents colostrum, lactose and other versatile and innovative products.

Meat products are going through a big change too – look at the growth of our Asian market to 2004, as they became wealthier, more conscious of biosecurity and safety, and the meat industry stepped-up their marketing in that region.

Success stories

Some parts of the food industry have cause to celebrate this past month. The dairy industry is reaping the benefits of high prices, production efficiencies and a sound reputation, injecting an additional $1.5 billion into the economy through Fonterra’s forecast payout. The dairy industry has become like the earthquake base-isolator of the New Zealand economy, providing a secure revenue base to help protect us from the shifts of the global economy.

While such a dominant industry has some negative effects on our economy and environment, we must acknowledge the dairy industry’s success and contribution to New Zealand.

Another success story is the announcement of the Riddet Centre as the newest Centre of Research Excellence. This creates an opportunity to highlight New Zealand’s excellent food science. In addition to becoming a CoRE, the Riddet has also developed a partnership with Speirs Nutritionals to create an ingredient that puts omega-3 into food without the fishy taste. Partnerships and innovation such as this are key to recognising and developing new opportunities for food producers.

Responsive to our Markets

As you have probably noticed, the last year has seen a sea change when it comes to how climate change and sustainability are seen around the world. This creates a number of issues for the food industry.

One issue that has gained attention in New Zealand over the past year has been food miles. We know that "food miles" as a measure of carbon and greenhouse gases is rubbish, but what it brought back to New Zealand was the emotion and politics of the global food industry.

What it also demonstrated was that when a scientific approach is called for, New Zealand is a world leader. Lincoln University had already figured out where the real miles went into food – between home and the supermarket car park.

In a climate where Northern hemisphere consumers are being told to choose local products based solely on carbon footprints, New Zealanders come up with a way to keep choice alive for consumers, and provide better products in the process. Grove Mill and Landcare Research are leading the way in this, with Landcare science certifying Grove Mill as the world’s first carboNZero winery.

Hardships

We’ve also seen some very tough times for the meat industry – drought, low meat prices, the high dollar. Just last week a UK supermarket chain bowed to local pressure and pulled good New Zealand lamb from its shelves. Mark's and Spencer's has been picketed by Irish sheep farmers angry that they stock New Zealand lamb over Irish produce.

Back in New Zealand, we’re at the start of a genetic revolution in the meat industry. Catapult Genetics has launched tests that let sheep and beef farmers test hard-to-measure production and quality traits of their breeding livestock. This has the potential to open a new era in meat production, with much finer control of taste and increased yields.

We continue to innovate in a world that still largely relies on subsidies, protection and protest, rather than quality and efficiency, to drive food production. Many countries see protective and political measures as the only way to make sure they have food all year round, ignoring that retailers decided years ago quality and good prices were what customers really wanted.

In the examples I’ve talked about, New Zealanders have found ways to make a future for our food. New Zealand has decided to think about its food, and to find new markets, better ways of production, and more innovative products. It’s a promising start, but now we face some new challenges.

Challenges

We need our food products at the high-value end of the market. There is a tremendous amount of intellectual property and technology that goes into our food, and we need ways to make that extra effort pay for us. How much more will people pay for our food if it’s safer, healthier or functional?

Our markets are changing, especially in Asia where new wealth means people want new and exciting experiences. Getting to know the market of the future is a step New Zealand needs to take before any other country. What part can our Asian communities play in helping New Zealand get closer to this market than our competitors?

The sustainability challenge of keeping output up as resources get more constrained poses massive questions. What should New Zealand produce? What should we not produce? We can’t put any more land towards food production in this country – what do we do about this? Can we make money during a drought? Do we really need all that water to grow and process our food?

In addition, as we produce quality products for export, we have to consider what we feed ourselves. We like to believe that New Zealanders get great quality and cheap food by world standards – how can we keep our own food supply healthy?

These are fundamental questions that our globally-linked food industry needs to keep asking itself. They are all great challenges, and fantastic opportunities. Science and Technology is one of the critical tools we have to turn challenges into opportunities.

Making RS&T work for Food industry

Now in last months budget, we announced the research and development (R&D) tax credit – I’m sure many of you know what this is, but let me reiterate – New Zealand businesses conducting R&D in New Zealand will be eligible for a credit of 15 per cent of allowable expenditure. We expect the food industry to be a major beneficiary of the credit, and we expect that it will be a catalyst for more co-operation between research organisations and businesses.

We’ve also put $14 million more over four years into research into innovative foods, beverages and other new products, $12 million additional funding for Pastoral 21 and $8 million for research into increasing productivity and sustainability across primary sectors.

And, as I mentioned, we’re funding the Riddet Centre as the Food CoRE.

Another exciting development is that, over the next year, the Ministry of Research, Science and Technology will develop and consult with you on the Food and Beverage Research Roadmap. We want a clear set of directions for food innovation in New Zealand, and the Roadmap will be the document which articulates what the government is doing to support food industry innovation.

Taskforce – announcement in July

You may also be aware of the Food and Beverage Taskforce report. Next month, we announce our response to it. We see the industry as the strength on which to build and diversify our economy. The Taskforce said the future of the food sector was in partnerships and developing leadership, certainly something I want to encourage in food innovation.

If the government response to the taskforce is announced next month, I do not want to wait until next year’s NZIFST conference to hear what you think. The Taskforce wanted more government leadership, and that is fair enough, but we will be looking for your leadership too.

Future Visions and Food Innovators

Let’s go back to one of the earlier topics – is “other” the future of the dairy industry in New Zealand? How much do we need to diversify to maintain dairy as an industry, and what other gains does adding value to dairy give New Zealand? The dairy products we export now have been shaped by changes in transport and trade – what are the future drivers of dairy innovation?

Who eats New Zealand meat in 15 years time? What will they value about our meat products, and how can we ensure a steady supply? What are the other products we can get out of animals used in the meat industry, and who wants them? What do new markets think of our food, and how do we get them to like it, buy it, and keep on eating it?

We constantly hear about challenges facing New Zealand industries, with the environment being more of an issue for food producers than ever before, testing export conditions, and concerns about attracting skilled people.

We have been great at taking past challenges and turning them into opportunities, and we can celebrate that attitude. With the range and size of markets that New Zealand is now exposed to, we have a great opportunity to use research and innovation to transform the food industry, increasing diversity and stability and adding value

You are the innovators in the food industry – you marry opportunity and technology to diversify and grow what New Zealand produces. You lead the industry in new directions and toward new futures. How will you take the issues I just mentioned and turn them into opportunities to add value? It is your direct input that leads to New Zealand’s success as a food producer.

I hope you’ll have some fruitful discussions about these topics at this conference. I’m impressed by how exciting New Zealand food science is, and I look forward to seeing more breakthroughs and world-firsts over the coming years.

ENDS

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