Speech to Horticulture NZ annual conference

It’s a pleasure to be here tonight to speak to your annual conference.

I’d like to acknowledge my colleagues – David Carter and Kate Wilkinson, Andrew Fenton, Peter Silcock, and the board of Horticulture New Zealand, as well as the sponsors and delegates.

Horticulture New Zealand plays an important role representing 7000 growers and advocating for the concerns of your industry.

We value the job you do and the input you provide to government policies.

We may not always agree with what you say, but we will always listen.

Because your industry is very important.

Horticulture contributes around $5 billion a year to our economy.

As well as putting fruit and veges on the tables of four million Kiwis, you earn our country more than $2 billion a year in export receipts.

What’s more, it’s clear from your Industry Strategy that there is real potential to grow the value of those exports.

And it’s good to see you have a clear idea about how you can do that.

So tonight I’d like to reflect on your ambitions for horticulture in the context of the ambitions the National-led government has for New Zealand.

I’ll talk about some of the challenges and opportunities we face, and some of the steps our government is taking to help your industry achieve its goals.

But before I do that, I’d like to take you beyond our shores for a few moments.

Two weeks ago I led a delegation through the Pacific to Tonga, Samoa, Niue, and the Cook Islands.

We had some very useful meetings with government and business leaders in the region.

Beyond the formal events on the trip, one of the highlights was a visit to Poutasi Village in Samoa. 

More than 240 people from the village have taken part in our Recognised Seasonal Employment (RSE) scheme over the past two years. 

The scheme has given young people from Poutasi an opportunity to work in Hawke's Bay picking and thinning apples in the harvest season.

Those villagers appreciate the income this work has brought them, and are investing in the development of their community.

The village put on a show for our delegation. 

They fed us fresh coconuts and breadfruit while we watched a fantastic performance by children in the church hall.

It was a great visit, a fun show, and a sign of how strong our ties are with the Pacific.

But it also showed what can happen when government works with industry.

The RSE scheme benefits growers, exporters, fruit pickers, people who buy and eat our fruit around the world – and the crown accounts.

It shows that when we work together, we can all win.

So I’m proud that last month, the National-led government announced improvements to the RSE scheme.

We have listened to growers and launched a new Supplementary Seasonal Employment permit.

This will allow growers to employ visitors to New Zealand in the peak season when local labour is unavailable.

We have also amended the RSE policy to ensure the rules for deductions from RSE workers’ wages are the same as those for New Zealanders.

This will make life simpler for growers and their employees.

And we have required employers to arrange health insurance for their RSE workers while they are in New Zealand.

RSE workers are not eligible for publicly-funded healthcare and the lack of insurance cover has created problems for growers and workers in the past.

These changes are an example of how the National-led government is listening and working with you.

They are just some of the many ways we can work together.

We welcome your Industry Strategy – “Growing a New Future” – which has been prepared with co-funding from New Zealand Trade and Enterprise.

And we recognise that government has a part to play in helping you achieve your four key objectives:

• Building global competitiveness,
• Dominating product categories within target markets,
• Creating value, commercialising products, and controlling intellectual property, and
• Setting the standard for sustainably produced products.

New Zealand Trade and Enterprise is working with Horticulture New Zealand to identify two industry projects that will demonstrate the principles of your industry strategy, and I look forward to learning about these later in the year.

Your goal of more than doubling the size of horticulture in New Zealand to become a ten-billion dollar industry by 2020 is a big one.

It will take a lot of hard work and innovative thinking to achieve.

But given that total horticultural exports have doubled in value since 1995, I am confident you can achieve your goal if you remain focused and you work together.

In that respect, the challenges that you face in your industry are not that different from the challenges we face in government.

New Zealand is confronting the deepest, most synchronised global recession since the 1930s.

This is having a profound effect on everything from unemployment to the government’s spending plans.

But despite these difficult times, I am optimistic about the future of our primary sector and our economy.

Because even though many Kiwis – and some growers – are struggling at the moment, we need to look beyond the recession and focus on the longer-term opportunities we face.

The high-quality products you grow and produce are one of the keys to our recovery and our future prosperity.

During this recession, demand for food has declined far less than demand for manufactured goods.

And in spite of this recession, the middle classes in China and India are continuing to grow and demand better quality food products.

New Zealand is well-placed to feed that appetite.

We have a good climate, quality land, relatively abundant water supplies, and the world-class expertise and know-how of our farmers.

We are well-positioned on the edge of Asia, and have a growing number of free-trade agreements with countries in the region.

We have a clean and green brand, and a reputation for producing safe, high-quality food.

Our challenge as a government, and your challenge as growers, is to make the most of these competitive advantages and the opportunities they present.

That won’t necessarily be easy.

As growers, you have to contend with pressures on the resources you rely on – land, water, and workers.

Meanwhile, consumers around the world are increasingly aware of carbon footprints, climate change, and environmental performance.

So if New Zealand is to meet these challenges and make the most of our opportunities, we need to play to our strengths.

We need to harness the experience born of generations of growers.

We need to make the most of cutting edge technology and know-how.

And we need to protect our environmental credentials.

These are factors you acknowledge in your industry strategy, and which will play a part in boosting the performance of horticulture.

Just last week I outlined the government’s six main policy drivers for boosting the performance of our economy.

These are:

• Regulatory reform
• Investment in infrastructure
• Better public services
• Education and skills
• Innovation and business assistance
• A world-class tax system

And I’d like to spend a few minutes exploring three of these drivers – regulatory reform, investment in infrastructure, and innovation – and how they are helping the horticulture industry.

New Zealand needs to offer a high-quality regulatory environment if we are to overcome the economic disadvantages of our small size and geographic location.

We have introduced a 90-day probationary period to give smaller businesses the confidence to take on new employees.

We are reviewing the Holidays Act to make it easier to apply.

We are undertaking the biggest overhaul of the Resource Management Act since its introduction in 1991.

The first phase of our RMA reform programme focused on streamlining and simplifying processes under the Act.

A second phase of reform is currently underway.

We have also kicked off a programme of reviewing and reforming the Building Act, and rules around electricity, telecommunications, and overseas investment.

There are too many regulations in New Zealand and our approach is, in general, to reduce these, across central and local government.

Rodney Hide is leading the charge for us in this area.

While I am on the subject of regulations, there are a couple of important issues I would like to touch on – country of origin labelling and biosecurity.

The government supports voluntary country of origin labelling where consumers demand it.

This delivers the benefits of labelling without the costs of regulation and without compromising New Zealand’s trading interests.

But we do not support mandatory labelling.

We are a major food exporter.

We need as much flexibility as we can for marketing our food in both the domestic and export markets.

Mandatory labelling could reduce that flexibility and potentially see significant costs passed onto consumers.

Another area where I think there is a real opportunity for regulatory improvement is at the border – particularly with Australia.

Following my meeting with Australian Prime Minister Kevin Rudd earlier in the year, we are working on streamlining customs and immigration at international airports for trans-Tasman flights.

Our thinking is that the more we can get Trans-Tasman travel to feel like a domestic flight, the more Australians will come to New Zealand.

I know you are worried about the biosecurity implications of this, and I understand that the Ministry of Agriculture and Forestry has consulted with Horticulture New Zealand on the proposed changes. 

I want to reassure you that we hear your concerns.

In fact we think that the changes we are looking at will actually improve standards at the border, by ensuring that Biosecurity NZ is working smarter and making the most efficient use of its resources.

I expect to make further announcements about improvements to the Trans-Tasman border next month.

Another issue that remains on our agenda with Australia is disagreement over New Zealand apples.

The government is continuing to work through the disputes panel at the World Trade Organisation to get a resolution over access for our apples into the Australian market.

Earlier this month, a second hearing was held before the disputes panel in Geneva, and the panel is expected to release its report in early 2010.

We are committed to working with Australia to secure commercially meaningful access for our apples.

The second government policy driver I would like to talk about tonight is infrastructure investment.

We are investing $7.5 billion over the next five years to build and upgrade schools, roads, housing, hospitals, telecommunications, and the national grid.

We are also boosting state highway spending by $1 billion over the next three years, and are looking at allowing trucks to carry heavier loads.

And we have taken the first steps towards rolling out our $1.5 billion broadband plan to provide ultra-fast broadband to schools, hospitals, businesses and 75% of homes.

Although we remain the furthest country from world markets, ultra-fast broadband is a breakthrough technology.

It will give you and your businesses the ability to reach customers far across the globe.

Another area where there is real potential to lift our performance is how we use our precious water resources.

New Zealand has plenty of water.

But it’s not always in the right place at the right time.

Our fresh water resources are the envy of many other countries.

And they are one of our competitive advantages.

About 600,000 hectares of land is irrigated and – depending on how you calculate it – at least three times that area is suitable for irrigation.

That’s a huge potential gain we can make in productivity.

The problem is that in many parts of the country, water quality is poor or deteriorating, and demand is outstripping supply.

That’s why we are also looking at including water in the government’s plans for infrastructure development.

And that’s why we are establishing the Land and Water Forum to help set the direction of water reform.

The forum is a collaborative approach involving major water users in agriculture, industry, and power generation, as well as environmental and recreational groups.

I’m pleased that Horticulture New Zealand will be playing a part in the forum.

The final area I want to talk about is covered in some detail in your Industry Strategy.

Innovation isn’t just about working smarter in the orchard or out in the field.

It’s also about continuous improvement in research, intellectual property, market development, and branding.

Our horticulture sector has a long history of continuous improvement.

From developments in irrigation and fertilisers, frost protection, cool storage, and high-tech fruit handling and grading systems – such as electronic colour sorting of blueberries.

Through to new crops and cultivars, dwarf rootstocks, hybrid seeds, new apple varieties, and the development of ZespriGold.

Doing things smarter on and off the land has been a key part in lifting the value of your annual exports to well over $2 billion in 2008.

This in turn, has driven better returns to growers and to our economy.

We believe that the success, the know-how, and the innovative thinking in industries like horticulture provide a massive opportunity for New Zealand.

And we believe there is capacity for even bigger gains in the future.

That’s why we’ve established the Primary Growth Partnership (PGP).

This is an ambitious public-private partnership aimed at boosting research and development, driving innovation, and doing things smarter right across the value chain.

In education.

In research and development.

In product development.

And in commercialisation, market development, and technology transfer.

The Government is investing $190 million in the partnership over the first four years, and $70 million a year after that. 

Funding will be increased as industry shows capacity and the need to invest even more.

With a matching commitment by industry, over time up to $140 million a year will be invested.

There will be five sections of funding with each proportioned a dedicated amount.

The rest will be contestable.

These sections are:

1. Pastoral and arable production,
2. Horticulture,
3. Seafood,
4. Forestry and wood products, and
5. Food processing (including nutriceuticals).

PGP is a true partnership between government and industry.

Its priorities and strategic direction will be led by the industries that choose to be involved.

The more that industries put into each section, the more that government will fund it.

Its success will therefore be determined by how much you support it.

So my challenge to you is to get together and contribute to the partnership.

By working with each other, we have a better chance of developing the innovations we need – the ZespriGold of tomorrow – to make the most of our commercial advantages, drive higher value products, and boost grower returns in the years to come.

An area where innovation will be increasingly important is our response to climate change.

That’s why, last month, we announced that the Government is establishing a Centre for Agricultural Greenhouse Gas Research which we expect to be up and running next year.

The Centre will develop technologies that reduce emissions and improve on-farm efficiency and productivity.

It will have three areas of focus:

1. Methane from farm animals and waste systems,
2. Nitrous oxide from farm animals and nitrogen fertiliser, and
3. Soil carbon from agriculture and horticulture.

We have allocated $5 million dollars a year from the Primary Growth Partnership for the centre.

It will also be able to bid with industry partners for PGP's additional contestable funding.

The centre will be a key part of our sensible and pragmatic approach to climate change.

This includes reviewing the emissions trading scheme to balance our environmental responsibilities with our economic opportunities.

And it includes working carefully towards setting a 2020 greenhouse gas emissions target as part of our international climate change obligations.

Ladies and gentlemen, I am impressed by the ambitions you have for your industry.

And I welcome your Horticulture Industry Strategy – “Growing a New Future”.

The successes you have had in recent decades suggest that your goal of becoming a ten-billion dollar industry by 2020 is very realistic.

The key to reaching that goal is working together, learning from each other, and making the most of the opportunities New Zealand provides.

The government is playing our part.

We are improving the RSE scheme.

We are reforming the regulations that are holding back growth across our economy.

We are increasing investment in infrastructure.

And we have established an ambitious Primary Growth Partnership to boost research and development on the land and off it.

But there is much more that we can do in these and other areas.

So let’s keep working with each other.

Let’s keep getting smarter at what we do.

Let’s keep developing the policies that your industry and New Zealand needs.

And let’s grow a new future together.

Thank you.