Address to Ballance Agri-Nutrients AGM

Good evening everyone.

This past month has been unlike any other I've experienced - from the extremes of storms from Waikato to Southland to the devastating earthquake in Canterbury.

I was in Auckland when the Canterbury quake struck, but my wife and children were back on the farm on Banks Peninsula.

The first I knew about it was when my wife called around 5.30 to say they were shaken but safe. At that stage, it was still dark so no one really had any idea of the devastation.

My first priority was to try to get back to Canterbury, but with the airport closed this initially proved difficult. The Prime Minister quickly moved into action and the Air Force sorted us out, enabling the Prime Minister and several Ministers to get to Christchurch.

I have spent a lot of time in Canterbury since, and the generosity of New Zealanders has been truly amazing. In typical fashion, the neighbourly spirit of rural New Zealand quickly became evident.

Within hours of the quake, and with no electricity, dairy farms were sharing generators to get cows milked. I heard of one shed designed for 400 cows milking 2000 in the first 24 hours.

I know Ballance at Rolleston was at the end of the fault line, but by all accounts your company was lucky to escape with relatively minor damage.

Much further south, we are coping with another major disaster. The terrible snow storm that hit Southland last week has had a huge impact on rural Southland and South Otago.

It was the length and severity of the storm that took its toll. While it is far too early to put a dollar value on losses, when I visited last Thursday I was told of one farmer who had lost 20 percent of his ewes and 80 percent of his lambs. This is a massive blow.

In the face of disasters like these, the Government needs to keep an over-arching focus on growth and action.

As we continue to navigate a patchy recovery from the global recession, the primary sector has a major role to play in our plan for growth.

It is the backbone of our economy - and it is also the industry that presents the biggest opportunity for future growth.

Consider this for a minute - the world population is expected to grow from six billion to nine billion people over the next 40 years.

As a producer of premium products, our target will be the upper and middle classes - New Zealand's capacity will be to feed 50 million people that can afford, and are prepared to pay more, for high quality food and beverage that is backed by integrity and reputation. That is backed by ‘Brand New Zealand'.

There are three hard-earned parts to maintaining our position as a premium producer. These are: food safety, animal welfare, and environmental management.

These three components are the things on which our reputation is built.

The SanLu incident in China taught us a lot.

Despite what the New Zealand media would have had you believe at the time, perversely this scandal has been beneficial for Fonterra.

Young mums in China no longer trust domestic production. They do however buy, at a higher price, infant formula imported from New Zealand and countries like Denmark because they know it's safe.

Animal welfare is another important - and emotive - issue. In fact, almost more correspondence comes into my office and the Prime Minister's office on this topic than on anything else.

In New Zealand we have an internationally respected Animal Welfare Act. The Ministry of Agriculture and Forestry is constantly working on animal welfare codes which ensure our animals are treated humanely.

The third component that guarantees our international reputation is environmental integrity. This is an area of increasing focus for our international consumers.

And it is probably where the spotlight shines the brightest when I talk about ‘Brand New Zealand'. No farmer, no food producer, in fact no New Zealander can afford to disregard the environmental component of our brand.

Recently Britain's Acting High Commissioner, Mike Cherrett, told the Meat Industry Association Conference that too many New Zealand food producers and processors risk underestimating the importance of the environmental footprint to consumers.

And if you don't believe that the consumer is concerned, rest assured that supermarkets will exercise their conscience on behalf of consumers.

Most interestingly, Mike Cherrett pointed out that Tesco, with 30 percent of the domestic grocery market in the UK, is moving to effectively impose similar standards of environmental sustainability on South Korea, through its presence there.

Such is the power of the retailer.

So it is the area of environmental sustainability that presents the primary sector with some of its greatest challenges.

I want to congratulate Ballance for developing the Ballance Farm Environment Awards; for doing your bit to meet this challenge.

These awards are a great example of industry taking the lead to showcase farmers who are innovative and who are using new technology to reduce environmental impacts.

Every farmer who enters should be congratulated. They are a beacon to fellow farmers.

I would also like to congratulate the industry on the hard work it has put in over recent years regarding on-farm nutrient monitoring. Continued uptake of the OVERSEER model is encouraging.

When it comes to nutrient monitoring OVERSEER is the only game in town. It's a valuable tool for calculating estimates of nutrient flows in a productive farming system. And it allows farmers to identify and reduce environmental impacts from run-off and leaching.

It is through these types of initiatives that we are making progress in addressing the challenges facing us.

As I said earlier, to meet this Government's over arching goal for economic growth, we must capitalise on the potential that exists.

We must play to our strengths without losing sight of what our customers are demanding from us.

New Zealand has no greater natural strength than our fresh water resource.

Successful management of this is the key to unlocking future growth and sustainability for agriculture.

Last season's drought in the Waikato is a timely reminder of water's huge economic and strategic importance.

To date, as a nation, we have been dismal in planning its proper use, controlling degradation and seizing opportunities for harvesting and storage.

The irony is New Zealand has an abundance of fresh water, it just doesn't always end up where it's needed most.

The challenge of how to best manage New Zealand's fresh water resources was put to the Land and Water Forum - a group of around 60 stakeholder representatives who, over the past year, have worked through issues and potential solutions.

Their report back, received by the Government last week, sets out an overall direction for fresh water management reform.

We must find a middle road to fresh water management and solutions that delivers benefits to everyone.

We know the challenge. It's walking that fine line by balancing agricultural intensification and environmental degradation.

Water management is equally about reliable irrigation and water quality standards.

Another way Government can boost our economic growth potential is through investment in primary sector innovation.

Our commitment to innovation, research and development saw the launch of the Primary Growth Partnership a year ago.

I am proud to say that this government-industry initiative has, in its first 12 months, delivered a staggering $368 million. This is the largest spend on primary sector innovation in decades.

In closing I want to take this opportunity to reaffirm the Government's commitment to ensuring that New Zealand farmers stay at the top of the global game.

There will always be new challenges, and new opportunities. It is up to the industry as a whole to ensure that New Zealand's competitive advantage is enhanced in coming years.

Reputation is our greatest asset. Every product that displays the words "New Zealand" must enhance our reputation.

The future is our opportunity. Now is the time to grab hold of it and make our excellent industry even better.

Thank you.