Contrary to claims by Richard Prebble that the Government is turning its back on agriculture, nothing could be further from the truth. Moving to a knowledge-based economy is not about getting rid of agriculture, but about increasing value from agriculture and producing a greater variety of products, Food and Fibre Minister John Luxton said today.

"New Zealand's primary industries - agriculture, horticulture, forestry and fisheries - are still very much the lifeblood of the New Zealand economy. Together the food and fibre industries contribute over 75% of our export receipts. New Zealand knowledge and expertise in these areas is world renowned," Mr Luxton said.

"As stated in the Five Steps Ahead Package released today, it is very much about our agricultural sector. New Zealand needs to add value through enterprise, innovation and new technology. This is already happening in New Zealand's agribusiness sector. New processes and technology have helped create new agricultural products from New Zealand's traditional agricultural produce."

"For example there are a number of high-tech value-added initiatives in the dairy industry. A potential treatment for cystic fibrosis and emphysema through the extraction of milk from genetically modified sheep is also underway. Many other agriculturists have created their own specialised niche markets in new areas such as wine, flowers, olives, avocados, asparagus and other horticultural areas."

"To succeed in coming decades, New Zealand's producers, exporters and marketers are going to have to become even smarter. In future our ability to create wealth will not be bound by physical limits, but by our ability to come up with new ideas."

"Globalisation is changing the rules, the marketplace and Government's role. As a nation we need to continue to remove unnecessary costs to doing business and barriers to innovation, and invest in improving skills, competencies and our international competitiveness."

"The reality is commodity prices have been falling in real terms for the last 30 years. It is harder and harder to make adequate profits from producing commodities as we have been, no matter how efficient we become."

"A knowledge-based economy is about ideas and how we use them, in all industries including agriculture and about continual improvement and innovation. The need to shift emphasis onto products and services of greater value is already occurring in the primary industries. If New Zealand's primary producers do not continue to adapt, they will struggle to prosper and many may not survive."

"Innovation is going to continue to be a driving force for economic growth, just as it has been in New Zealand agriculture for many years. The Government is committed to the agricultural sector but even more importantly, we are committed to its success in the next century."

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