Annual Conference New Zealand Fruitgrowers' Federation

  • Dr Lockwood Smith

It hasn't been the best of years for all in the fruitgrowing industry. If the fruitfly incident didn't cause you some hassles , then, for some, the weather did. And all of us have had to contend with the rising value of the kiwi dollar.

On the bright side, pipfruit exports passed half a billion dollars. Exports of processed fruit reached a record $145 million and, for kiwifruit, revenue and volume to date are ahead of the past two seasons. We can be pleased with our export performance for both berries and subtropicals. The big picture is that, over all, fruit exports have remained about the same as last year.

In less than 5 weeks 1996 will be in the past, and the theme of this conference is "Futures for Fruit". I'm impressed with what I have read about your "Futures for Fruit" project. I must say, though, I am something of a cynic about those who believe they can predict the future.

In 1943, Thomas Watson was chairman of IBM. He has the distinction of saying "I think there is a world market for maybe five computers". But by taking into account the fact that the future will hold sudden market changes and technological leaps, you are in a good position to avoid the same kind of mistake. In particular, I'm impressed that your project begins from the point at which it should - the customer, and has a strong research base.

We need to start out by asking ourselves what the customer will want. Given sufficient time and investment, I'm confident that New Zealand fruitgrowers and exporters can develop pretty much whatever overseas customers want. No other question is relevant until that first question - what will the customer want? - has been addressed. I support the industry's initiative.

Some have asked how I see the political system will impact on that future you are forecasting. Unlike some politicians, I'm not prepared to make any promises to fix the weather. However, I am prepared to say that the risk of any further fruitfly incidents is much reduced thanks to the Government's $20 million Border Control Strategy for which your Federation played an important role in helping me get the necessary support. But it is the political and economic environment you will be working in which perhaps provides the greatest uncertainties.

At the beginning of this month, I addressed the AGM of the New Zealand Dairy Board. I spoke of the importance to exporters of Governments maintaining a focus on price stability. It is an issue which concerns me greatly. It is also an issue which is dear to the hearts of all exporter groups.

Exporters are promising their summit next Thursday, will deliver a "united and forceful message" to the new parliament. They are concerned that future policy settings may influence the performance of the economy and may hold the New Zealand dollar artificially high and reduce New Zealand's competitiveness. This, they say, will squeeze the export sector and cost both investment and jobs.

The exporter groups organising the economic summit include Federated Farmers, the Dairy Board, the Fishing Industry Association, the Forest Owners Association, the Manufacturers' Federation, the Meat Industry Association and the Tourism Industry Association. Together they would represent a fair hunk of the New Zealand economy. Theirs is the same message Reserve Bank Governor, Don Brash, gave in a speech to Southland Farmers on 11 November, and just this week repeated by International Credit Rating Agency, Moody's, in its latest assessment of the New Zealand economy.

The one recent commentator who has pooh poohed the concerns is Labour's Finance Spokesman, Michael Cullen. He said it was an unusual suggestion not supported by evidence from any country, including New Zealand, that running a looser fiscal policy could increase the exchange rate. He suggested that I "should stick to cattle breeding". I leave you to make your own judgments, but tongue in cheek, could suggest he should stick to history lecturing. You can't damage history too much.

Next Monday, the Minister of Finance will present the December Economic and Fiscal Update. It will be a far cry from the post-election releases following the 1984 and 1990 Elections with the Budget surplus little different from that projected prior to the election.

Despite the strong New Zealand dollar, exports are still projected to grow by 4.3% a year from 1996, through to the turn of the century. Business profits have grown at a rate higher than expected, as has the economy at large. It is remarkable that at the bottom of a business cycle we continue to have real growth of over 2% a year.

A strong economy provides a strong base for all our businesses. So long as the political parties keep this in mind, I'm confident export conditions will not deteriorate. On current policy settings, the December Fiscal Update in fact projects a rebound in export growth from mid-1997.

Whatever the outcome of the coalition negotiations I will remain vitally interested in your industry. I wish you well for the next year and as you plan for the future through your "Futures for Fruit" project.