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Agmardt Primary Resources Forum

Hon Jim Anderton

Minister of Agriculture, Minister for Biosecurity
Minister of Fisheries, Minister of Forestry
Associate Minister of Health
Associate Minister for Tertiary Education

8 July 2008 Speech

Agmardt Primary Resources Forum

NZ Institute of Agricultural and Horticultural Science
Ag/Hort lecture block
Massey University
Palmerston North

I think the topic a rural- urban split is requires us to look at what each of us contributes.

A few years ago, there was a belief among many around parliament that our rural industries were sunset industries.

They thought we would become the Switzerland of the South Pacific, producing nothing of intrinsic value – and probably run by a money trader. I know the prospect of that would appal anyone.

The truth turned out differently. Today, everyone who knows anything about New Zealand recognises that agriculture will be the backbone of our economy for the foreseeable future.

If we want to increase the living standards of New Zealanders and enjoy the standard of living of countries we like to compare ourselves with, we have to sell more of what we can efficiently produce to the rest of the world.

For the foreseeable future, our primary sector offers the best opportunity to increase our export returns.

It is certainly true that we need to broaden and deepen the industrial base of our economy beyond the primary sector.

I spent six years as Minister for Economic, Industry and Regional Development working with New Zealand's sectors and regions in an effort to lift the rate of growth and the connections our businesses have with global markets. There have been some encouraging successes – a few have been spectacular, like our film industry; others such as biotech, IT and the creative sectors are all growing well.

But productivity in the primary industries has grown at twice the rate of the rest of the economy since the early nineties.

Only our primary industries have the global scale, sophistication and competitive advantage to transform our incomes. So if we want to enjoy rising living standards with other first world countries we need to sell more of our primary production to the world.

The sun is not setting on the sector − it is setting on old-fashioned, low-value commodity production. And it's rising on high value primary production.

When I leave here, I am going across campus to open a new food technology pilot plant.

It’s a great example of the growing commitment to innovation throughout our primary industries, from food to fork, and from water to waiter.

Those views formed back in the eighties–that agriculture was dying industry – were wrong.

They were wrong because they failed to take into account the ability of the sector to create value by becoming more innovative, and by incorporating innovation and knowledge into then production chain.

Today, over half of our primary sector exports are sophisticated products. The proportion of our exports made up of high value production is going to rise.

Our agriculture is going to be increasingly dependent on science, technology, creativity and skill.

We don't have much of a future trying to compete against very low cost, low-income countries purely on price. Instead, our future will be as a supplier of quality, premium products targeted at discerning consumers. It will be a future where we find niches in global markets and value chains as well as profit from owning and controlling a significant share of the value chain ourselves. It is a future based on knowledge.

Innovation demands the contribution urban New Zealanders make: From knowledge and research, to the accounting firms, to the shipping firms and transport operators, to staff in ministries who do the work governments can contribute – from negotiating market access to supporting industry in many other ways.

Everyone is on the boat.

I started off talking about the mistake that was made in the eighties in seeing our primary industries as sunset industries.

It is also a mistake today to think that our urban demands for a clean environment, for water and for more cannot live along side primary sector demands for the same resources.

An enduring feature of New Zealand's farms, no matter what crop is on them or in what region of the country, is that there is an awareness about the importance and value of nurturing the land.

Ask just about any farmer and he or she will tell you that no-one knows more intimately than farmers that their businesses depend on the quality of their land.

So they are always interested in techniques that improve efficiency and productivity on the land, and also protect it for the future.

I'm not starry-eyed about the existence of different points of view over the best ways to look out for the land and for water, but I have very high levels of confidence in the goodwill of participants in the industry.

While we acknowledge the interest we all have in the way we care for the land, it's also worth thinking about the implicit challenge to us all - there will never be a time when we will know everything about best practice.

There will never be a time when we can say "all the adverse impacts have been taken care of, and we don't have to worry about that any more."

Our challenge is to turn the threats of any unsustainable land use practices to our advantage. We will have to demonstrate that our methods of production are not only low impact, but are actually good for the environment.

As an urban MP who also happens to be the minister responsible for all of our primary industries, think talk of an urban rural divide over these issues is artificial.

It’s in all of our interests to have a strong economy.

It is in all of our interests to care for our environment.

We need a Team New Zealand approach – not saying a prayer of thanks to farmers when you sit down for dinner, but also not seeing farmers as pariahs in the environment.

The trick to managing the various interests we all have is to recognise the need we all have to maximise our productivity and minimise our environmental impacts.

No one thinks you can produce agricultural and horticultural products for the world without environmental impacts. So management of the impacts of our production systems is becoming a defining issue for our generation.

I see farmers, horticulturalists, foresters and fishermen wanting to improve their environmental performance and taking proactive steps to do so.

I applaud and congratulate all of those who have the long-sighted view of taking responsibility for their social and environmental impacts, and who are working hard to get ahead of the game.

But none of us can be complacent about productivity on our land and none of us can be complacent about the environmental effects of our intensive use of our land based resources.

It is also quite clear that there are still some considerable gaps where we need to work hard to improve current tools and techniques as well as develop new ones.

Even though we have an environmental and agricultural productivity record as good as anywhere in the world, we can't relax. The bar is always getting higher.

We need our productivity to keep improving because increased productivity is the only way to increase real returns. For our social and economic wellbeing as a nation, we need our land-based industries to keep improving their productive capability.

Many market changes are consumer driven. Consumers want to be reassured that their food is produced in ways that respect our natural environment and leave something for the future. Consumers are interested in understanding the water quality effects of production.

We need to continue to protect both our local and national environmental reputation. Our competitive advantage is in premium-quality, sustainably-produced food. This is value we can add before the farm gate. We can create even more value not only by focusing on processing goods, but also by improving the processes by which they are grown.

We need to earn more from our sales to the world, not just sell more volume.

We won't double our export income from fishing by catching twice as many fish from the ocean. Fish stocks around the world are already stressed.

Instead, growth will come from productivity improvements - for example, from adding value to fish landed here, but more commonly through the introduction of new technology and new techniques. Aquaculture is already a boom industry globally, but with real potential here.

A similar concern surrounds the growth in dairying. There is no debate over the fact that we need growth in our most sophisticated sector to continue - but there is a debate around how we achieve growth in a way that meets the needs of all New Zealanders.

Resolving these issues will require the contribution of all our sectors. The contribution should be valued for the value it can add, not for whether it is located in urban or rural centres.

And we need to recognise all sectors have some shared interest – as well as sometimes competing demands – when it comes to resolving the issues.


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