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New report shows PGP delivering major benefits

Hon Nathan Guy
Minister for Primary Industries

28 May 2014

New report shows PGP delivering major benefits

Primary Industries Minister Nathan Guy has welcomed the findings of an independent report into the Primary Growth Partnership (PGP), which estimates it will add $6.4 billion per annum to New Zealand’s economy by 2025.

“The NZIER report further concludes that the PGP has the potential to achieve an additional $4.7 billion per annum by 2025 if all the R&D is successful, the aspirational stretch of PGP programmes is achieved, and the innovations are widely uptaken.

“This would add up to $11.1 billion per annum to New Zealand’s economy by 2025.

“The PGP is about supporting innovation in the primary industries, which are the backbone of New Zealand’s economy – accounting for over 70% of our merchandise exports. There are currently 18 announced programmes jointly funded by industry and government.”

The $11.1 billion per annum figure is made up of:

• $2.2 billion - GDP projected growth from government investment
• $4.2 billion – GDP estimate from industry investment
• Other aspects adding to $4.7 billion (i.e. from increasing the success of R&D, achieving the aspirational stretch of programmes and improving uptake of the innovations).

“The long term 30-year benefit cost ratio (BCR) for the government funding alone is 32, which confirms what a good investment this is. Clearly this will be a big part in achieving the Government’s goal of doubling primary sector exports by 2025.

“Science and innovation are key drivers of economic growth and international competitiveness, as noted in the Government’s draft National Statement of Science and Investment. Boosting productivity in New Zealand’s primary industries will mean more exports, more jobs and an improved standard of living for New Zealanders.

“NZIER estimate extra income per year of $270 per hectare for hill country farming, $600 per cow for dairy, $370 per tonne of exported seafood, and $190 per hectare for forestry.

“It’s also worth noting these figures don’t include wider benefits the PGP will deliver, such as environmental sustainability and improvements to health and safety,” Mr Guy says.

The Ministry for Primary Industries (MPI) commissioned the NZIER to carry out independent research into the economic impacts of the PGP and provide a robust analysis of potential export growth, GDP growth, and other economic measures.

As at 30 April 2014, the total government funding paid to the 15 programmes currently underway was $99.8 million.

Further information and the full report is available at: http://www.mpi.govt.nz/agriculture/funding-programmes/primary-growth-partnership/nzier-report-on-potential-benefits-of-the-pgp

Background on PGP

• The Primary Growth Partnership (PGP) is part of the Government’s Business Growth Agenda, a programme of work that provides the framework to support New Zealand businesses to grow, in order to create jobs and improve New Zealanders’ standard of living

• The PGP aims to boost the productivity and profitability of our primary sector through investment between government and industry. It provides an essential springboard to enable New Zealand to stay at the forefront of primary sector innovation.

• PGP programmes are generally long-run programmes of five to seven years’ duration and are subject to oversight and monitoring by an independent panel (the Investment Advisory Panel) and MPI.

• Current programmes cover the breadth of the primary industry sectors: wool, dairy, fishing and aquaculture, meat, pastoral, bee keeping, forestry, viticulture and horticulture.

• There are now 18 PGP programmes announced with $708 million in funding committed from both industry and government.

• Monitoring requirements for PGP projects include programme steering groups, quarterly progress reporting, annual plans, audits, and progress reviews, along with evaluation of the overall programme. Funding is only released to programmes on receipt of invoices for work completed in accordance with programme plans.

• MPI is seeking applications for new PGP programmes. Applications must be received by MPI by 12pm on Wednesday 25 June 2014. See the PGP webpage on MPI’s website for further information and guidance.

For further information about the PGP visit:
http://www.mpi.govt.nz/agriculture/funding-programmes/primary-growth-partnership

ENDS

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