Organic Products Exporters Group

  • David Carter
Associate Minister for Food, Fibre, Biosecurity and Border Control

Knowledge is the key to New Zealand's future.

Your specialist knowledge in organic food production is vital to that future.

Thank you for the opportunity to speak, today.

John Luxton is sorry he cannot attend. But it means, for the second time this week, another minister's loss is my gain.

Yesterday I represented the Prime Minister, Jenny Shipley and delivered a speech to the Horticulture Industry Conference in Christchurch. This afternoon I am delighted to be here.

The horticulture conference adopted the theme 'knowledge harvest'. It's a theme that fits your industry.

This afternoon I will briefly outline why I consider organic production so important. In other words the significance of your knowledge harvest to our economy.

I will then talk about food safety and specifically genetic modification before taking a broader look at issues facing rural people.

I'd welcome any questions at the end.

So why is organic food production so important.

Organics are an exciting and fast-growing part of the agriculture and horticulture sectors. Despite the growth in tourism and other areas, these sectors still fuel the fires of our economy's engine.

The agriculture and horticulture sectors, combined, contribute more than half our export earnings.

They account for around 16 percent of our GDP and provide employment for about 14 percent of the labour force.

That's a huge contribution. But it's under threat.

International commodity prices are in decline. New Zealander farmers and horticulturalists know this and they're taking action.

People in your business are developing a high-value, specialist, niche market in organics.

In the dairy sector, I understand that Peter Hillary's team in their expedition to the South Pole last year found a third of their daily energy requirements in a small high energy bar provided by dairy industry technologists at Kiwi Co-operative Dairies Ltd.

In horticulture, the rich levels of anti-oxidants in the squashy boysenberry are being touted as an exciting discovery as people seek natural protections from common ailments.

As you know proven health benefits open markets.

So the decline in commodity prices can have a silver lining. New Zealanders have always faced adversity with determination and innovation.

Rugby and league player John Kirwan, told National radio on Saturday he lives by the saying 'tough time don't last, tough people do'.

New Zealanders are good at turning tough times into opportunities to excel.

Organic producers face tough hurdles in getting certified. I commend you on your two registered symbols, Bio-Gro and Demeter. I am told certification of organic production is a rigorous procedure that takes at least two years.

The opportunities though, are tremendous.

It has been estimated the international organic market will be worth $100 billion US annually by 2006.

That's bigger than the current world consumption of wool at $3.6 billion US, or of butter, cheese and milkpowder combined at $50.2 billion US.

In New Zealand, latest estimates show we exported around $29 million worth of organic products in 1998. That's a 45 percent increase on the previous year.

This is tremendous growth. In fact it would be hard to find a more exciting growth figure.

And as you know your Organic Products Exporters Group Inc (OPEG) has set a goal of more than doubling this to $65 million by the year 2001.

This is ambitious. But given the energy and commitment of your industry and the burgeoning consumer demand, your goal looks achievable.

Worldwide there is a rising tide of concern about the unsustainable nature of some existing agricultural practices. All food producers need to be assessing their practices for sustainability.

However, it is recent food safety scares, especially those in Britain and Europe, that have been a bigger and more immediate influence, sending shoppers to the organic food counters.

I read a recent article that said many British shoppers had had one too may food scare.

The problems of BSE in Britain, dioxin scares in Belgium and microbiological food poisoning outbreaks in the United States have left many shoppers concerned about what they are buying and eating.

Organics has become a very powerful marketing tool.

One of the two recipients of the New Zealand Meat Board's Waitangi Fellowships in 1999, Angela Aitchison, recently returned from a 10 week tour of Europe, investigating the production and marketing of organic meat in the UK and the European Community.

She reports the scene is set for an exciting future for organic production by farmers in New Zealand.

Aitchison reports, based on her discussions with supermarkets, that organic food is not only one of the fastest growing retail sectors in Europe, but also one of the most profitable.

One UK supermarket chain currently turns over $6m weekly on organic food sales. But what is even more significant for New Zealand is that 70 percent of the UK's organic products are imported.

It is very difficult for farmers in crowded countries to go organic. New Zealand has a competitive advantage in this world where eating organics is seen as health insurance.

Aitchison says organic food is no longer a niche market but a significant market sector.

Demand in Japan has grown 20 percent each year for the last 10 years and demand in the US is showing similar growth.

It is very encouraging to see that some big names in our agriculture and horticulture sector, like Heinz Watties and the Kiwifruit Marketing Board, taking a greater interest in organic farming.

Organic farming in New Zealand has come along way from the days, not so long ago, when it was the territory of hobby farmers. Today, I am told about five percent of Heinz Watties frozen vegetables production is organic.

And, as well as the big companies, there are people building up organic businesses like Manawatu dairy farmer, Cathy Tait-Jamieson, farming on a 400 acre block and processing and branding her own products, which incidentally one of my staff swears by.

But of course the next frontier in reassuring consumers of food safety involve the whole range of issues around genetic modification.

The responsibility of Government in assuring food safety is to set the framework within which industries operate, rather than acting as the quality controller through methods such as on line inspection.

This approach to food safety regulation reduces the need for direct intervention, and places the responsibility for systems management with industry.

Government cannot maintain the regulatory framework alone. All the players need to work in partnership.

The Government must provide basic legislation, sensible standards, monitoring and evaluation and guidelines to manage the risks inherent in food production.

With GMFs, I acknowledge your concerns. People's concerns in this area are complex and varied. They range from safety, to ethical, cultural, social, environmental and political.

In the UK, the body that oversees standards in organic farming has ruled that genetically modified crops have no role to play in organic farming systems.

They have concerns, that some of you share, about the possibility and consequences of mixing GM crops with organic crops.

I would like to assure you, New Zealand has some of the world's most up-to-date legislation in this area.

The Government is taking a keen interest in the developments in the gene technology area.

It has put in place a strong regulatory framework to ensure that New Zealand can capture the benefits of gene technology while preventing or managing any risks. This consists of:

1. The Hazardous Substances and New Organisms Act 1996 (HSNO Act), implemented by ERMA, makes it illegal to import, research, develop, field trial or release any GM crop in NZ unless it has been approved by ERMA on a case-by-case basis. There have been no approvals to release any GM crops in NZ.

2. The Australia New Zealand Food Authority (ANZFA) has a standard which now makes it illegal to market any GM food in Australia and New Zealand unless it has first met ANZFA's safety requirements.

3. The Government recently announced the formation of the Independent Biotechnology Advisory Council to stimulate dialogue and enhance public understanding of biotechnology. It will also provide independent advice to the Government in its consideration of environmental, economic, ethical, social and health aspects of developments in biotechnology.

A debate on genetic modification, is needed, but it should be properly informed; and both sides must have a fair chance to be heard.

To date the debate has been fairly one sided. The claims of the alarmists have been allowed to unsettle many with little or no scientific basis.

New Zealand is a world leader in some aspects of biotechnology research and should hope to remain so.

Genetic modification is one small area of biotechnology, offering both opportunity and risk to the food sector.

All food producers need to learn how to use the opportunities, without endangering the trust and faith of consumers in the process or the foods produced.

It is clear that consumers want choice, and to be treated with respect.

Consumers want to know what they are eating.

I personally believe this issue is of such great importance to people. I support labelling. However, I, like the rest of my party, believe labels must be useful, consistent, sensible, workable and meet our international obligations and our consumers' needs.

The Government does not have the luxury of standing on the sidelines and criticising. It has to make sure what it supports works for producers and consumers.

Next week Wyatt Creech is attending the Australia, New Zealand Food Authority meeting where Ministers will be trying to decide, just such a sensible, workable labelling system.

As organic producers, you have an opportunity and I believe an obligation - to engage in the debate.

Indeed, I am informed that some of you are already doing this, by making your concerns known to ERMA about specific applications. This is exactly how the system should work to ensure that decision makers have all relevant information available to them.

We need to strike a balance and that can only happen if we all engage in meaning dialogue.

We need to agree on the level of protection or safety we require whilst capturing the benefits science will offer in the future.

I believe the two goals are not mutually exclusive but they do require work.

They require an openness, a preparedness to listen and to educate, and a willingness to challenge misinformation.

You are well placed to contribute to this.

On the topic of food safety I would like briefly to mention the new single food assurance authority.

Aspects of food administration have been under scrutiny for a number of years and over that time significant changes have occurred.

The move towards a risk management based approach to food regulation has been one of the more significant.

On 1 July the Government announced the decision to proceed with a single stand alone food assurance authority.

Although originally we had hoped to site it within MAF, the political process being what it is, this option became increasingly difficult to progress.

At present expertise in food safety is spread across MAF and the Ministry of Health and is divided largely along domestic and export lines. A single agency will have no such division.

Its focus will be to ensure that consumers both in New Zealand and in our overseas markets are presented with safe food.

Exactly what form the new agency will take is still being worked through, but I can say that contrary to what some have been speculating, this does not automatically mean the "gutting" of MAF.

Whether or not biosecurity is separated from food assurance remains to be seen. Obviously we would be interested in your views on the matter.

From food safety, I would like to now turn to briefly talk about wider issues affecting your industry.

The National Government has recently completed a two week tour of New Zealand's rural heartland.

Two of our rural MPs, John Carter and Eric Roy, travelled over 8000 km, visiting woolsheds, cowsheds and country halls to listen to rural New Zealanders.

I was pleased to join Eric Roy on his South Island part of the tour, when he visited Canterbury.

Your messages to us were clear:

*keep prices under control; *be careful with our money by spending our taxes wisely and continuing to pay off debt; *leave more of our hard earned cash in our pockets by reducing taxes; *give New Zealanders the best the world can offer at the best prices, and give our exporters the best access we can to overseas markets; *get rid of red tape; and *let people sort out their own workplace issues.

We have delivered on these things and with your support we will lock in, and progress them.

This is the platform we have created for our next stage of growth. The future will pose similar challenges and choices.

We are committed to bringing taxes down. The next step will be a cut to 20 cents in the dollar up to $40,000 from 1 April next year. After that we will move to bring the top tax rate down to 30 cents.

The reduction in import tariffs has also brought huge benefits to the rural sector with a reduction in the costs of farming vehicles and machinery, tools and gumboots.

After extensive consultation we have introduced the Amendment Bill to reduce unnecessary delays and costs in the administration of the Resource Management Act.

Changes in the accident compensation, parallel importing and the electricity industry are three recent examples where the Government has moved to increase competition with the aim to get costs down and enable productivity to increase.

The Government has changed the law so Local Government spending has to be much more clearly justified. This is making it easier for ratepayers to see where their rates are going, and to question poor quality expenditure.

Government is also clear in our stand in foreign affairs and the benefits of trade. We work on our relationships. They pay dividends.

Market access is a major challenge for rural industries. These are not problems that are solved overnight. They require persistent pressure over long periods. We are making progress. National is committed to freeing up trade access for New Zealand exports into all markets.

APEC and the coming World Trade Organisation round offer opportunities to advance the cause of trade liberalisation.

On producer board reform, in the next few months, every dairy farmer, every kiwifruit grower, and quite possibly every apple and pear grower in the country, will be voting on new industry proposals.

Dairy, Kiwifruit and Apple and Pear Board legislation have all been introduced over the last fortnight.

Producers and industry leaders must continue to work to find solutions. They deserve the credit. They have made their own decisions, and they are working flat out for progress.

Another major component in encouraging our next stage of growth is the skills of our people, and the effectiveness of our R&D.

You will be aware of Max Bradford's consultations on the Five Steps Ahead program.

Max and his Innovation and Enterprise ministerial team spent much of the earlier part of the year consulting with scientists, educationalist and enterprising New Zealanders.

The question was how to unlock higher growth rates for New Zealand by making ideas work for New Zealand.

The Government will be presenting the result of its deliberations on 18 August. It will come as no surprise to you here, that one of the key ideas is to get tertiary education, R&D and enterprising New Zealanders working more closely together.

The Government has also been talking with many people and groups around New Zealand about our ideas on future road management policy.

The widespread consultation that the Government has carried out has shown that road users and providers recognise the problems facing the current system.

One of the biggest themes running through our policy is to do with choice. It is ridiculous that in some areas of New Zealand roading costs account for up to 60 percent of rates - regardless of how much a person uses roads.

Developing the best roading and transport system is not a rush job. It's a job that requires patience, foresight, careful planning and cooperation. We can tackle it, as New Zealanders we always have; making sure we get it absolutely right, and we can do it working together in partnership.

So far the Government has received over 1000 public submissions on its discussion document Better Transport Better Roads.

The Government wants to reflect on them very carefully and engage in a dialogue with key groups before it finalises its approach.

This Government has vision and commitment to moving New Zealand ahead. It is built on the sound foundations of the past. This then is the environment in which your industry operates.

As I have said, you are important to our economy. You are essential to our growing living standards in the future. Production, international competitiveness, productivity, and excellence will be our hallmark.

New Zealanders in all sectors from organics to electronics must work together, and work alongside one another, to help build our nation into the next millennium.

For our part, the Government has set a track record that backs our productive sector and is working in partnership to pave their future.

In conclusion I would like to wish you luck in your organic production. As I began, knowledge will be the key to New Zealand's and your future.

The signs are good for your products. The challenge is to harness your excellent products, your good ideas and your commitment to your industry and to make the most of the environment the Government is building in partnership with you.

Thank you Questions