Hon Jim Sutton
Speech Notes

2 September 2002

South Canterbury Federated Farmers meeting, Timaru

Ladies and Gentlemen: Last week, the Prime Minister unveiled an ambitious plan for the Government and our country in the Speech from the Throne.

The Labour-led government believes that the appropriate mix of policies can, over time, return New Zealand to the top half of the developed world.

We see New Zealand as a land where diversity is valued and reflected in our national identity; a great place to live, learn, work and do business; a birthplace of world-changing people and ideas; and a place where people invest in the future.

In February, the Growth and Innovation Framework was published, to set out a framework within which higher sustainable growth can occur.

Achieving that higher growth will require careful attention and energetic promotion of the key elements of economic transformation: human capital development, investment, innovation, export promotion and business and regional development. Investment needs to be attracted, in particular, into areas of innovation, which can add value across a broad sweep of industry sectors. The government has decided to concentrate on three key competency areas: arts and culture, information and communications technology; and the one of most interest to you as primary producers: biotechnology.

The full potential of our economy will only be realised if we build on our sources of natural advantage and deepen the competencies that are associated with them. That means working with the primary production sector in agriculture, horticulture, and forestry.

Biotechnology, one of the three identified areas of strategic priority, is an area of both natural and acquired comparative advantage for New Zealand.

Ladies and Gentlemen: we in New Zealand have the capacity to develop exciting new products and new markets.

Many still perceive the primary production sector to be competing in price-driven food and fibre commodity markets.

In fact, agriculture and forestry industries encompass agritech, animal remedies , software, machinery, biochemicals and nutraceuticals. A major part of New Zealand's high value manufacturing and processing is directly dependent on agribusiness, including processing, packaging, agritech equipment, machinery and software.

The agribusiness and forestry sectors in New Zealand have the scale, global marketing capabilities, technical skills and natural resource advantages that not only make them core to our domestic economy, but also provide New Zealand with the platform for future growth and for diversification into new and non-traditional markets. The enthusiasm with which New Zealanders' are prepared to embrace new crops and techniques of growing older ones is indicative of an innovative farming and forestry sector.

By no means all of biotechnology research involves genetic research, and by no means all of the latter involves genetic engineering or modification.

The Minister for the Environment currently has responsibility for the oversight and coordination of the genetic modification portfolio and the Ministry for the Environment continues to coordinate the whole of government response.

In its response to the Royal Commission, the government agreed that work on co-existence be progressed as far as practicable in the absence of any actual applications for release.

Cabinet directed officials to investigate and report on the practicalities of: a strategy for the use of Bt crops, labeling for GM plant material, a strategy to mitigate any impacts on bee products, an industry code of practice for separation distances, and a national facilitation and mediation network.

Other work proceeding in line with the Royal Commission report recommendations on HSNO Act, Bioethics Council, biotechnology strategy, research programs, economic impacts of release, liability issues, intellectual property and labeling.

The Government has no intention of going back to heavy-handed intervention in agriculture, let alone to extensive subsidies. However, it does recognise the benefits of active partnerships between industry and government, for example to help address issues such as the skill shortages in agriculture, and the challenges and opportunities of new technologies such as genetic modification.

Concerns about GM reflect uneven understanding of science, different attitudes to risk, the high uncertainty associated with rapidly changing fields of technology, and spiritual and ethical concerns. On the face of it, GM could be our major technological tool for future productivity gains in the dairy industry. However, we are not yet in a position to judge the acceptability of such technologies in the high income markets in which New Zealand competes.

GM is in fact only a small part of biotechnology, and even within gene technology there are major economic gains that can be made without the use of transgenic techniques.

It is also possible that New Zealand could achieve major commercial gains by applying GM to dairy and sheep industry applications that focus on medical and health rather than on food markets.

Throughout the genetic engineering debate in this country during the past few years, I have continued to argue that decisions should be made rationally, based on science. For that reason, I do not have a problem with genetic modification, carried out according to the rules set out in New Zealand.

However, as the trade negotiations minister of a nation reliant on exporting and trade, I have also consistently argued that the customer is always right. There is no point in producing what people don't want to buy? we've seen that in the way our meat industry has changed. From providing bulk frozen carcasses, to moving to provide chilled meat, cut in attractive and user-friendly styles.

There is consumer resistance in some markets to the thought of eating GM food. That may well be because of ignorance or scaremongering. But it doesn't change the fact that there is that resistance.

There does not appear to be the same resistance to medical use of genetic engineering, and this could be a opportunity for us.

An example could be the use of dairy cows to produce pharmaceutical and other high value biochemicals in their milk. This would target high value medical rather than food markets, and thereby avoid consumer concerns about genetically modified food products. I believe that real opportunities exist in this field, and such applications of biotechnology for health and wellness purposes can win the support of the community.

New Zealand agriculture is likely to benefit substantially from many GM techniques only if the public is informed and supportive of them, and has confidence in the regulatory frameworks and conditions governing their use and application. That is why the Government wants structures, legislation and processes in place to assess and manage risks as they relate to GM. It is important that the Royal Commission's direction of "proceeding with caution" is followed, and that the regulatory framework for GM is based on robust science and case by case analysis.

There will be a significant discussion paper coming out soon that will canvass issues including conditional release.

Farmers should make sure they contribute (might even be good to have submissions from the different Fed Farmers groups, rather than just the one national response).

The people who know most about coexistence issues are farmers themselves, so the Government will be looking for them to provide input about what issues need to be sorted out and how to go about it.

If farmers are worried about green groups dominating the public debate, then farmers themselves need to take part. The Government can't win the hearts and minds of the public for them. If farmers want the option of GM available, then they should initiate some discussions, starting with their own communities, about the pros and cons - especially the economic and market issues and coexistence.

If you want to use this method then you have to convince the 80% of New Zealanders who are willing to consider GM, don't believe everything the green groups say, but who have concerns about issues raised, and in the absence of good answers about those questions, see no reason to have GM here.

Thank you for the opportunity for me to speak to you tonight. I wish you all the best for the new season and beyond.

Thank you.

ENDS

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