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Anderton - Federated Farmers National Council

Hon Jim Anderton Minister of Agriculture

Federated Farmers National Council

4.00PM Tuesday, 8 November James Cook Grand Chancellor Hotel



Charlie Pedersen, President of Federated Farmers of New Zealand.

Jean Martin, Gisborne/Wairoa provincial president of Federated Farmers - I acknowledge her work during the recent devastating floods in her area.

Tom Lambie, the previous President of Federated Farmers who has worked tirelessly for the efforts of Federation members.

Gathered members.

First of all, I would like to express my thanks to Federated Farmers and the wider sector for the warm welcome I was given publicly when I took on the agriculture portfolios.

There were some generous comments made and I hope you will feel as generous in three years time!

I'd also like to congratulate Charlie Pedersen on chairing his first national council meeting as President of Federated Farmers.

I know you must feel some hesitation in welcoming a minister who comes from an urban electorate.

What would he know about farming?

The answer is: not very much compared to what you know.

But I'm not here because the sector is short on expertise about farming.

I'm doing this job because I have some expertise in bringing industries together to improve their economic performance.

I'm the minister for 'getting things done'.

Our wider economy desperately needs to keep growing faster than the average of other developed countries.

That's the only way we can expect to deliver incomes and opportunities for New Zealanders that rival those of other countries we like to compare ourselves to.

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From at least the sixties until this century we fell behind other countries, and our living standards slipped.

When you look at the causes of our decline, it's clear that it hasn't been the fault of the primary sector.

It's been the failure of other sectors to keep up.

Over the last fifteen years growth in agriculture, forestry, and related industries averaged productivity growth of 2.8 percent each year.

Other manufacturing industries achieved just 1.1 percent growth.

From 1986 to 2002 the contribution of agribusiness to New Zealand's economy rose from 14.2 percent of GDP, to 16.5 percent.

So the sector has performed in a way we need the rest of the economy to emulate.

I've spent the last six years working on developing those 'other' industries, and getting them focused on achieving the results the primary sector has accomplished.

But given the scale of our primary industries, it is the number one priority for achieving further growth in our economy that they achieve more and more success themselves.

Other sectors are largely limited to niche roles.

While those can be very valuable, the primary industries are our only sectors capable of achieving global scale.

For our economic welbeing New Zealand needs our farms to achieve continued productivity gains and increasedvalue from their production.

You can be assured that the government is commited to work with you on this challenge.

In December last year, as Minister of Economic Development, I established a Food and Beverage Taskforce, which includes key industry, research and government agency representatives.

It will play an integral role in helping us work out how to further lift productivity and add more value to our agricultural and horticultural products.

The food and beverage sector has shown consistently high levels of growth and innovation over the last decade.

The sector’s total exports were nearly $14 billion in the year ending March 2004.

Across the board, the industry employs about 13 per cent of the total workforce and 63,000 people in manufacturing alone.

But there are still significant opportunities as well as challenges to address.

The taskforce’s work includes undertaking fundamental strategy work to build on our understanding about markets, access, opportunities and growth, as well as addressing such things as skill and labour shortages, and research and development spending.

The taskforce is a unique opportunity for government and industry to work together on those challenges and to identify how the food and beverage sector can achieve its full potential.

I look forward to continuing to play a part in that partnership as Minister of Agriculture.

We need to have high ambitions.

China has had nine per cent year on year growth for two decades.

India has averaged 7.5 per cent growth since the late nineties.

Yet the Economist magazine two weeks ago ran a huge cover feature on how they have to do better!

We have to do better too.

It's only through lifting productivity in the primary industries that we are going to increase our growth rates.

Our primary industries have been the backbone of this country's economy since it was settled.

So this is where we need attention, and it's where I'm interested in working alongside the sector to remove the barriers to faster growth.

I'm aware that it's easy for a minister to come along here and tell you 'we all hope you do better.'

The crunch comes when you ask, well, what's the government going to do?

This government is committed to working in partnership with your primary sector, as shown by the Food and Beverage Taskforce.

You can expect the government to work with you to agree on the highest priorities and practical solutions in overcoming barriers.

In a partnership, the government shoulders its share of the load, just as the industry does.

Another good example of a partnership in action is the Sustainable Farming Fund, which has supported 390 projects since it was set up in 2001.

Projects are focused on problems identified in the primary sector.

Federated Farmers members are actively involved in many of those projects, and leading several.

These projects include;

'Learning From Leaders', which is delivering learning packages to farmers;

'Improving The Awareness Of Biosecurity And On-Farm Best-Practice Amongst The Farming Community', which will develop a communication resource package to enhance farmers' biosecurity knowledge and awareness.

These are examples of a sound partnership at work.

There will always be a place for the sector to work with me, while I am Minister of Agriculture.

In such a partnership you can expect straight talking from me.

I think of my reputation for being frank as an asset.

A partnership is give and take - no one gets their own way on everything.

But across numerous sectors and regions the government has enjoyed success in getting a new focus on the highest priorities for development.

In a partnership, the worst thing I can do is tell you what is going to happen on every detailed issue in front of us.

But I know you are anxious to hear my thinking on some of the major issues.

So I would like to address these and stress that I'm open to working with the sector to evolve policy where it will help to achieve our highest priorities for growth.

The issues underlying growth in the sector boil down to productivity improvements.

The Labour-Progressive coalition government is making boosted productivity growth a top priority for this term of parliament.

The driver of productivity improvements in the primary sector has long been science.

A few years ago I wrote a book about unsung heroes of New Zealand.

One of them which all New Zealanders should know more about is William Saltau Davidson.

He introduced refrigerated shipping, and in so doing established a century of prosperity.

Until then, farming was dominated by speculators who bought and sold farms for the speculative value of the land.

Before Davidson, New Zealand sold mainly wool.

No one believed we would have a thriving dairy or meat export business.

There are important lessons to learn from Davidson:

That predictions about the future can be wildly wrong.

And that science and productivity improvements in our primary sectors are the key to unlocking productivity gains.

The Government wants to ensure that research, science and technology is transformed into real, high value products for progressing New Zealand's economy.

In June this year, more secure funding for Crown Research Institutes was announced.

There was a significant increase in funds for Research Consortia - which aimed to translate science into innovative products and services - and for Technology New Zealand to do the same.

The industry is also playing its part.

There has been heartening support from sheep, cattle, and dairy farmers for Meat and Wool New Zealand Ltd and Dairy InSight Incorporated.

These industry-good organisations are commodity levy funded.

They're working well.

Meat and Wool New Zealand spends around $37 million a year and about a third of that goes into research and development (just under 30 percent on market development for meat).

So farmers are investing in research and development and in new technologies.

The 'Dairy 21' proposal is also an encouraging one for lifting the productivity of the New Zealand dairy industry - with wider application to pastoral farming in general.

There is likely to be government support for broadly-based pastoral forage research, for dairy and meat, with a focus on economic growth; and for environmental sustainability, especially focusing on nitrogen, water, and sustainable soils.

These priorities would be aligned with New Zealand's wider interests, i.e. food and fibre, where we already have a competitive advantage.

The Government is also actively considering the proposal put forward by Dairy 21 for better coordination of public and industry good research funding for on-farm systems and basic pastoral research.

So the Government is committed to research and development, and innovation, in the agricultural industry.

Another crucial issue for the industry in lifting productivity is skills shortages.

Like many industries, the primary sector faces a challenge to attract and retain quality people and develop new leaders.

The Ag-Hort strategy is an industry-led initiative - set up by MAF -- that's been tackling labour and skills issues for the agriculture and horticulture sectors.

There has been a managed approach to ensuring the sector has sufficient numbers of people with the right skills and attributes.

It's extended across Federated Farmers, other industry associations, CRIs, training institutions and a range of government agencies.

The strategy group has developed a promotion strategy

A new training programme has been launched to help farm employers improve their employment practices.

A better process for lodging submissions to the Immigration Service has been set up.

The first time the new process was used, eleven primary sector occupations were added to the Immediate Skills Shortage List and three to the Long-Term Skills Shortage List in December last year.

Industry training and Modern Apprenticeships are being increased.

The Food and Beverage Labour and Skills Working Group is also looking at the issue.

So there is a lot going on in this area.

I'm now the Associate Minister of Tertiary Education with particular responsibility for the skills area.

So I have some special responsibility in ensuring we deliver in this area, and I'm committed to working with this sector to make progress.

If skills shortages are one barrier to development, then compliance costs and the Resource Management Act are potentially another.

The recent changes to the RMA were designed to increase investment certainty, reduce compliance costs and improve administrative processes.

I'm fully aware the RMA can be used to impede the development of the agriculture sector.

That isn't always the case, but it can be the outcome.

We will always need to balance the different demands for our resources and I will be a strong advocate for balance.

In my experience, farmers are often the best conservationists, and spend every day having to balance present and future resource needs.

They are also practical and expect to see practical management of regulations.

There are always going to be cases where a judgement has to be made and when that happens, certainty, fast and efficient processes and fairness in the outcome should all sit along-side the need for development and resource allocation.

We come across many of the same issues when it comes to public walking access to rivers and beaches.

We know how passionate people become about these issues: Maori got passionate about wanting to hold the foreshore and seabed, and they didn't even occupy them; so I can understand farmers taking a similar view to the riverbed and foreshore they hold, when they do already own the land!

This is an area where the government is thinking again.

I can give you some assurances.

We're not going to have the public wandering all over your farms.

Not on my watch.

I am strongly of the view you can't just strip people's property rights from them.

No one is going to pass a law saying anyone can just wander across your land while you're trying to get the cows in for milking.

I'm the Minister for Biosecurity: I know how much the government is trying to work with farmers to ensure we isolate areas where there are pest incursions.

I'm not going to say, 'but on the other hand, while we're asking you to help us manage pests, we can have tourists trampling through your farm and into sensitive areas.'

So I would like you to be reassured I am not about to promote the changes I have heard some concerned farmers talk about.

I accept the sincerity of comments that 'all you have to do is ask'.

That doesn't mean we can ignore the issue and wish it away.

Most likely, the public access issue will have to be resolved in different ways in different places because there are local priorities.

Those who are often the most passionate about iconic rivers and foreshore areas are farmers and the communities who live in these beautiful places.

They know the beauty of our best spots, they want to protect the beauty, but they want the public to be proud of it too.

So there is goodwill on all sides.

A panel is looking again at the issue.

There is a lot of progress being made on this issue - for example, there is common agreement we need much more work on maps and signs where legal access already exists.

There is a good consensus about this.

I've said there is no deadline.

The panel can take as long as it takes.

So I am confident we can work constructively together on this issue.

As I mentioned, Biosecurity is another of my responsibilities.

It has been linked with the primary portfolios because of the sensitivity of these sectors to an incursion by a disease such as foot and mouth or mad cow disease.

The foot and mouth disease hoax on Waiheke Island highlighted how vulnerable New Zealand is to an outbreak of a disease that would instantly close significant overseas markets for our agricultural products.

A real foot and mouth disease outbreak could cost the New Zealand economy six to ten billion dollars.

The hoax, and Project Taurus, the foot and mouth disease simulation, provided opportunities to test our emergency management system.

A number of lessons were learned and the results are being put in place.

We also need to have appropriate systems and procedures to manage these diseases if they turn up and to reassure our trading partners.

Pest management is a big cost for farmers.

For example, bovine tuberculosis costs government and industry something like $60-70 million a year, and imposes a number of administrative costs on cattle farmers.

MAF is committed to industry involvement and partnership where possible in these issues.

Overall within the sector, we need to be prudent in selecting the highest priorities for attention.

We can reduce biosecurity risk significantly in many key areas.

Government is investing in these areas - for example, by increasing baseline biosecurity funding.

But we could spend any sum of money on biosecurity.

There will never be a time when we can eliminate all risk.

So we have to be careful to set priorities - in a partnership across everyone affected.

We need to direct resources to the areas where we can achieve the best return for each dollar we invest.

We need to be pragmatic in understanding life is a risk and we can manage those risks as well as we can.

We can be smart about where we are taking unnecessary or needless risks;

Finally, this is an exporting sector, deeply concerned about world trade issues.

This is a crucial week for world trade, ahead of what may well be a crucial month or so leading up to the Hong Kong talks.

No one doubts the importance of a favourable result from these talks, and we will soon have a clearer idea of the prospects.

I know there are a great many more issues we could cover.

But the details are less important than the first point I made to you this afternoon:

This is a crucial sector for New Zealand.

We can lift New Zealand's economic prosperity fastest by lifting our performance in the primary industries.

I'm committed to working in partnership with the sector to overcome the barriers to faster growth.

We have a lot of work to do.

And I'm looking forward to getting started with you from today.


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