LUXTON QUESTIONS APPLE & PEAR RESEARCH COMMENTS

Minister of Food Fibre, Biosecurity, Border Control and Associate International Trade, John Luxton today questioned reported comments on R&D in horticulture. This follows Dr Megan McKenna from Massey University reported yesterday as saying that:

1. "ENZA would cut costs, which would include money for research and development, to become more competitive",

2. "New Zealand did not have any mechanism in place to support research without a single desk"

3. "the Commodity Levies Act was "politically unpopular" and "might not last".

"I agree with Dr McKenna that evolving producer boards will see some costs cut as ENZA will move to become more cost competitive. This will be good for growers as savings should mean more money in growers pockets. Growers net incomes should increase, which is the focus of the producer board evolution process.

"Last year, of the $520 revenue for apples and pears, $355m went on costs to someone other than a grower. Growers received $165m, or just 32% of total revenue.

"The 1997 Apple& Pear Board annual report says that $3.711m was spent on research and developnmet, or 23 cents a tray. This doesnt seem a high level of research input from this industry. A more open environment would probably see an increase in R&D spending.

"R&D is generally accepted as money well invested. I would be surprised if out of the $355m, the Board sought to reduce this $3.771 million figure when it has far greater cost centres where it might make savings. For example it has been reported very recently that ENZA have withdrawn apple growers financial support of yachting.

"To say that "New Zealand does not have any mechanisms in place to fund R&D without a single desk" is clearly wrong. The facts speak for themselves. Meat, wool, forestry, fishing, wine, and manufacturing for example all manage to provide industry funds for R&D without a single desk. The taxpayer also puts several hundred million to compliment these efforts irrespective of a single desk operating.

"Why does Dr McKenna say that the Commodity Levies Act is "politically unpopular" and "might not last"? Again the facts speak for themselves. This Act was introduced in 1990 and replaced several separate Acts. It has been very successful with 24 different levies currently operating under it at the request of different sectors.

"It is good to see some academics now getting involved in this discussion, even if paid by industry interests. I hope that United Fruit and United Kiwi will also fund Frank Scrimgeours work from Waikatio University on the need to change regulation to improve of the future marketing arrangements of New Zealand's food and fibre exports, in a similar manner to their funding of Dr Mc Kenna.

"Dr McKenna needs to explain her reported comments to growers. They deserve better. Unfortunately she appears to be confusing politics with science," Mr Luxton concluded.