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Anderton: Canterbury Horticultural Society

Jim Anderton speech to Canterbury Horticultural Society

Elizabeth Peacock, President of the Society, Neiel Drain, Past President of the Society, Iain Clark, Manager of the Society, distinguished members and guests.

I was pleased to accept your kind invitation to take part in this year's series of winter talks. As you will know, both my wife Carole and I are strong supporters of the Society and the wonderful work you do for the city and to promote and nurture the art of gardening.

This year, you have chosen the broad and challenging subject of climate change and sustainability, and have asked me to discuss their impacts on New Zealand horticulture.

Sustainable Horticulture

New Zealand is a small, open, trade-dependent economy.

I don't need to remind a Canterbury audience that it is no exaggeration that our prosperity is built on the hard work, innovation and ingenuity of our primary industries.

We see this fact around us every day.

The sustainability of our agriculture and forestry industries is not only vital to our future social and economic wellbeing, but also to the quality of our environment.

Achieving sustainable development will have costs for some stakeholders, particularly in the short term.

However, social, cultural, economic, and trade drivers point to the need for New Zealand to be a leader in environmental performance.

Increasingly, our markets and our customers will want us to prove that we are clean and green, not just accept that we are because of the fabulous scenery in glossy television ads.

Becoming a leader in sustainable development will bring benefits that reinforce one another. For example, sustainable development supports economic development by:
creating premium trade positions;
providing long-term security for investment;
supporting tourism; and
creating new business opportunities, such as bioenergy.

At the same time, economic development supports sustainable development by increasing incomes, which increases demand for a higher quality environment and also provides resources to achieve environmental outcomes.

I am not one of those who see economic development and sustainable development as mutually exclusive.

Our future prosperity is dependant on our natural environment and how we use and manage our natural resources.

The success of the primary sector is driven by adding value to our natural resources.

These natural resources and continued innovation within the sector are at the heart of New Zealand's comparative advantage.

We need to take a sustainable approach to development of these resources to make sure they generate benefits not just now - but in the future.

Sustainable development is about utilising natural resources in a productive way, to improve the quality of people's lives while maintaining and protecting the key environmental elements such as clean air, water, and productive soils.

These are things which will determine, now and in the future, our economic prosperity and our lifestyles.

The international community is increasingly embracing the concept of sustainable development, which recognises as fundamental the need to manage key natural resources.

This is reflected in the negotiation of multilateral environmental agreements (for example, Convention on Biological Diversity, Framework Convention on Climate Change and Basel Convention) placing obligations on countries to address global and domestic environmental issues.

The global trading environment is increasingly driven by consumer demands, and changing tastes, nutritional and health concerns, changing diets and social values.

The primary sector's ability to compete in international markets increasingly depends on being able to meet these demands through improved sustainable use of natural resources, animal welfare, improved product safety and surety of supply and, above all, an increase in innovation and productivity.

Sustainable development should not be perceived as a set of ever tightening constraints that limit existing farm and forestry businesses, and perhaps even challenge their right to operate.

It is a more dynamic concept.

It is a way of focusing land and resource owners and managers on long-term sustainable growth and productivity for their businesses, while safeguarding the environment and its ability to provide input into farm systems, natural resources and environmental services.

Specialisation, productivity, trade and globalisation are key drivers of both economic growth and, to a lesser extent enhanced environmental quality.

Sustainability is in some cases a factor in market success and a differentiating feature for New Zealand businesses and sectors.

In effect, sustainable development is good business for New Zealand.

Climate change adaptation

Climate change will affect horticulture in a number of ways.

The projected temperature increases and changes in annual rainfall are likely to affect growers around the country, especially those close to the current plant growing ranges.

Water and decreasing frosts will also be key considerations for the sector into the future. In turn how these conditions shift, will probably affect bud break and winter chilling requirements.

These will be issues that will require investigation and management by growers around the country.

There will be opportunities for growers to look further north in the country to understand what the changes might be.

Climate change also brings opportunities that growers, being adaptable people, are likely to make the most of - both here and on the international stage.

Different species and varieties may become more suitable than those currently grown in a particular area.

Future challenges could involve managing different pests, weeds and fungal diseases.

Annual and perennial growers have an advantage in that they can more rapidly alter their production systems.

More long lived ventures such as pipfruit or citrus growers may have to take a longer term approach.

The kiwifruit and wine industries are good examples of proactive approaches to climate change.

In the kiwifruit industry, a key focus is on climate change mitigation including looking at reducing the industry's greenhouse gas emissions, and the impacts of the food miles and carbon foot printing debates on the kiwifruit market.

Zespri is gathering information to develop an adaptation strategy for the industry - in New Zealand and overseas - using information from the Bay of Plenty Regional Council, NIWA scenarios and government funded adaptation research. The strategy will identify the most 'at risk' regions.

In addition, there is a long-term kiwifruit breeding program for new varieties, mainly related to market drivers, but the ability to adapt to climate change, for example lower chill requirements, is also part of the breeding programme.

Zespri has a strategy to put research and extension resources around leading growers and support and empower them to trial new technologies, so that others can observe.

Some topics, for example water management, are being pursued for a wide range of reasons but climate change fits within this wider sustainability approach.

The wine industry also recognises the importance of responding to climate change, and particularly the trends in overseas markets and requirements.

The Grove Mill Winery in its Sanctuary Wines label have been particularly proactive, being the world's first "carboNZero" winery.

This means they have measured their emissions, put management in place to reduce carbon dioxide emissions, including energy efficiency measures, as well as 'offsetting' the effect of carbon dioxide emissions by purchasing carbon credits from a verified scheme.

In this instance, they were able to purchase credits from a local carbon farmer in the Marlborough Sounds.

Horticulture New Zealand is an active participant in working with government to find solutions to the challenges of climate change, both at strategic level in setting the direction of government's climate change programmes, and through the various groups set up around research, innovation and technology transfer.

The government is making a major investment in research and technology transfer, with proposals being sought now on ways to adapt to a changing climate, as well as reduce greenhouse gas emissions and undertake greenhouse gas foot-printing.

I'm a great believer in this type of partnership approach to dealing with issues. Collaboration is always, in my experience, preferable and more productive that confrontation.

Sustainable Water

Living in Canterbury it will come as no surprise that water is more and more moving beyond being a commodity to becoming a major sustainability issue.

A few months back, the Primary Sector Partnership Group released its Primary Sector Water Partnership Leadership Document, which sets out an action plan for managing the primary sector's effects on water quality and quantity and includes some sector-specific targets.

Through this, we can more easily establish a basis for the sector to engage with regional councils and co-ordinate the efforts of the primary sector and research organisations with the objective of improving the management of freshwater.

Horticulture New Zealand has been deeply involved in the programme of action and has contributed to the extensive work undertaken on codes of practice and other sector-led initiatives.

Our work on water sustainability is another excellent example of the partnership principle in action.

Green House Gas Foot-printing

I'm sure everyone here understands the concept of carbon foot-printing.

Put simply, a carbon footprint is a measure of the impact human activities have on the environment in terms of the amount of greenhouse gas produced, measured in units of carbon dioxide - usually grams, or kilograms, or tonnes.

However, we need a fair, transparent, verifiable method of measuring and calculating the carbon foot-print to be of much use.

So, the government is assisting the sectors by investing in the Green House Gas (GHG) Foot-printing Strategy.

The goal of this strategy is to improve the environmental profile of New Zealand's primary industries so they can operate in overseas markets with credibility, using an internationally agreed greenhouse gas foot-printing rules which can be applied without discrimination.

But nothing ever stands still. Around the world, some companies are now looking beyond being carbon neutral to becoming carbon negative.

Emissions Trading Scheme (ETS)

This brings me onto the emissions trading scheme or the ETS, which you particularly asked me to touch on today.

The ETS is a cornerstone economic tool that will help New Zealand reduce greenhouse gas emissions and tackle climate change.

For the first time, we will be factoring in the true cost of greenhouse gas emissions into our economy, in line with developments around the rest of the world.

Since New Zealand signed the Kyoto protocol a decade ago, the country has been debating how to price carbon emissions.

We now have a system that transfers responsibility for greenhouse gas emissions to their source over time, in a way that maintains a healthy and vibrant economy.

At the same time, it creates strong incentives to bring forward clean technologies and climate-friendly behaviours and investments.

While there will be extra costs for some sectors, the government will provide support to both households and business to smooth out the transition.

Because the sooner we get on top of this challenge the sooner we can reap the benefits of providing the low carbon goods and services that are attractive to affluent overseas markets.

Without the ETS, taxpayers would bear all of the costs of New Zealand's greenhouse gas emissions.

Horticulturalists will begin paying carbon costs in 2010 when the stationary energy sector enters the scheme, where the carbon cost of emissions from energy production will be passed on through the price of electricity.

Then in 2011, the liquid fossil fuel sector enters the scheme and consumers will pay for those carbon emissions in the price of petrol and diesel.

Finally in 2013, horticulturalists will pay for emissions from nitrogen fertilisers when they enter the scheme.

The beauty of the ETS is that it doesn't dictate who must reduce emissions, how, or by how much.

Instead it allows individuals to decide whether to reduce emissions, or whether to purchase units to pay for those emissions.

This way, the ETS will tend to find the cheapest emissions reductions in the economy, by using the market to incentivise reducing carbon emissions.

Because the ETS is designed with New Zealand's long term interests in mind, the benefits can sometimes be difficult for people to see in the short term.

However, it is designed to put New Zealand on a path toward higher levels sustainability and allow New Zealand to thrive in the carbon constrained world of the future.

It will also ensure that we can respond effectively to future market demands for goods produced in a sustainable and in a climate-friendly manner.

In the long term carbon will be managed much like other production inputs.

New Zealand farmers and growers have a proud history of adjusting and adapting their production systems and practices to protect environmental values in the productive landscape.

Techniques for efficient water, fertiliser and energy use are continually being evolved and refined.

New Zealand's largest horticultural export industry, kiwifruit, has more than 100 years of experience at sustainably managing the production of a healthy, natural resource.

All kiwifruit exports are produced under the Zespri System a world-leading 'end to end' supply chain that is focused on quality and getting the fruit to market with the least impact on the environment.

I'm confident the primary sector will fully embrace carbon trading and eventually it will be treated like other costs of production, and smart horticultural businesses will work to minimise the carbon intensity of their products and services.

And as I said earlier, while there will be extra costs for some sectors, the government will provide support to both households and business to smooth out the transition.

Sector's contribution to the economy

To put this industry in perspective, New Zealand exported $2.679 billion worth of horticultural products in the year to June 2007, up from a mere $115 million in 1980.

This included $696 million in wine exports, and was the equivalent of eight percent of total New Zealand merchandised exports.

Horticulture exports have increased steadily from 1970 when they made up two percent of agricultural exports, through to 2007 when horticulture's share grew to 15 percent of all New Zealand food and fibre exports.

Kiwifruit represent 29 percent of New Zealand's horticultural exports, followed by wine at 26 percent, apples at 13 percent, processed and frozen vegetables at 10 percent, and fresh vegetables at 10 percent.

Domestic sales of horticultural products were estimated at $2.56 billion in 2007, making total horticultural sector revenue in excess of $5.2 billion.

To keep growing domestic and export production and sales, the horticulture industry must continue to invest in science and innovation, in partnership with government.

Funding innovation and research

A good example of this partnership is the Sustainable Farming Fund, or SSF, which invests in farmer and grower led projects that deliver economic, environmental and social benefits to New Zealand's primary industries.

The fund has made a significant contribution to the economic and environmental sustainability of the horticulture sector.

Since its inception in 2000, the SSF has funded 596 community based projects valued at just under $81 million, with173 of these projects have directly contributed to advances in horticulture, to the tune of $23 million.

SFF funding is always made in partnership with other contributors, for example Horticulture New Zealand, and individual levy boards such as Pipfruit New Zealand and New Zealand Winegrowers, along with Regional councils, industry bodies and as in-kind contributions from growers.

The new SFF-climate change fund supports projects that will contribute to resilience in the primary sectors.

Of the $4.5 million committed so far to this initiative, $839,000 has been spent on horticultural projects.

These include projects on adaptation for the wine industry, carbon foot-printing for the onion and berryfruit industries and developing a climate change strategy for the summerfruit industry.

Consumers around the world are increasingly demanding that the fruit and wine they consume is free from detectable chemical residues.

This throws up an added challenge to New Zealand's pipfruit and winegrape growers who must balance the elimination of pesticide residues on harvested fruit with acceptable crop risk management that ensures fruit yield and quality are not compromised.

The half million dollar PipSafe project in the Hawkes Bay and Nelson is working to develop and deliver a spray programme that will give pest and disease control without any detectable residues on the fruit.

A further $2 million will enable the outputs of PipSafe to be delivered to the wider industry under the Apple Futures programme, the adoption of which is expected to lead to a $152 million increase in the value of pipfruit exports.

The wine industry is also responding to consumer demand and is looking to protect its premium position in the market, by producing wine with nil detectable residues, under the Grape Futures programme, and rolled out to industry under the Sustainable Winegrowers New Zealand programme.

Another area of new investment is addressing the use of nitrogen fertiliser for the horticultural and arable sectors, developing robust systems for modelling nitrate leaching across a number of different cropping systems.

These include perennial crops such as pipfruit, summerfruit and kiwifruit as well as vegetable production systems.

Growers will have access to a computer based tool that will enable them to plan their nitrogen fertiliser use, matching application quantity and timing to crop use, thus minimising the risk of leaching.

These nutrient plans may be supplied to the grower's regional council as evidence of responsible fertiliser usage.

It is often difficult for the smaller crop sectors to attract funding for projects that address their continuing sustainability.

In the past projects from a diverse group of small sectors, including summerfruit, berryfruit, avocadoes, olives, citrus, passionfruit, persimmons, walnuts, hazelnuts, mushrooms, paeonies, calla lilies, have been funded.

Last year, the small crops' forum identified some common areas of work around pest control, particularly birds, irrigation efficiency and water management, frost protection and agrichemical issues, especially the lack of registrations of new pesticides.

The most pressing issue for a number of smaller crop sector exporters is the impact of agrichemical issues on market access for their products. Following on from the small crops' forum, further work has led to the development of a collaborative work programme which will address market access issues.

And over and above all this investment, I'm most proud of the new Fast Forward Fund, an additional $700 million over 10 years for pastoral and food sector innovation and science.

The kiwifruit industry is already actively engaged in the process and there is opportunity for other horticulture based industries to benefit from this fund by jointly investing in the future.


I will briefly touch on the subject of apples and our Aussie cousins, and then open up the session for questions and discussion.

New Zealand has been actively seeking access to Australia for our apples since 1986.

Australia finalised its Import Risk Analysis for New Zealand apples in March 2007. But it contained an array of restrictive and unworkable requirements that New Zealand believes are not scientifically justified and are inconsistent with Australia's WTO obligations.

There came a point where pursuing a WTO dispute settlement was the only workable option left to resolve the apples issue, and in August last year New Zealand submitted a request for WTO dispute settlement consultations with Australia.

In June this year, New Zealand filed its First Written Submission with the WTO in Geneva, which sets out our legal and technical arguments. Australia filed its First Written Submission in July 2008.

The first oral hearing took place in Geneva on 2 and 3 September 2008. The hearing was an opportunity for New Zealand and Australia to put their case to the Panel and to respond to the Panel's questions.

The WTO dispute settlement process is a lengthy one. A second oral hearing is scheduled for March 2009.

We would not expect to see the Panel's ruling until the middle of next year. It is a lengthy process, but it is worth the time and effort to bring some closure to this dispute that has been hanging over our growers for over 20 years.

Concluding remarks

I hope the talk has been informative and interesting for you. There was an awful lot of ground to cover.

Thank you for the invitation and thank you very much for listening.

I now welcome any questions or comments you might have or any issues you might wish to raise.


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