Speech to the Annual Beekeeping Conference

New Zealand's future depends on innovative small businesses. Beekeepers belong to this group.

Thank you for the opportunity to speak to your conference today. I hope to address some of the issues facing your industry and at the end to give you an opportunity to ask me questions.

I do not promise to know all the answers but I welcome the chance to find out about them and report back to you. As well as talking about issues directly to do with beekeeping such as pest management, quarantine, genetic modification and market access, I will briefly outline other changes the Government has made that affect you as rural New Zealanders and small business operators.

However, I want to begin by acknowledging the importance of your industry. It is estimated that this industry provides more than 2000 jobs with more than 5300 people involved in beekeeping. Annual exports are worth around $12 million. This includes queen bees and bee packages, as well as honey and other bee products. As well, your bees, as they say, are the 'sparkplug' of our agriculture and horticulture industries.

Crops relying on bee pollination are worth over $1.2 billion per year. Pollination of pasture, and white clover in particular, is estimated to provide more than $1.87 billion worth of nitrogen each year to the soil. There are obvious economic and environmental benefits in bees rather than bags providing the nitrogen.

The two financial estimates, both in the billions, represent a significant and probably under-rated contribution to this country's economy. That contribution is reliant on the health of your bees and so pest management is of vital importance.

The bee industry's pest management strategy fits squarely within New Zealand's wider biosecurity framework. Five documents provide the framework for protecting the health and safety of honey bees, bee products and feed sources.

These are the Biosecurity Act, the Resource Management Act, the Hazardous Substances and New Organisms Act, the Sanitary and Phytosanitary Measures Agreement and the Convention on Biological Diversity. The Biosecurity Act works in several ways. It imposes the standards that imported bee products must reach. It controls the commercial and personal honey imports at the border. It monitors the honey bee population. It responds to disease incursions (actual or suspected) and sets out criteria for the industry to impose its own pest management strategy.

Your industry is unique among the land-based primary industries in that it is so highly mobile. In total the industry does not own more than a tiny fraction of the land over which it operates. Bees can make a harvest from all manner of vegetation types and land uses - or disuses. They have freedoms in national parks and other protected habitats that no other extractive industry would dare to contemplate. This mobility, whilst an inherent advantage for your industry, becomes a disadvantage when it comes to pest management.

The main pest being the American foulbrood disease. The national American foulbrood pest management strategy provides the legal mechanism for the control of that disease throughout New Zealand until 2008 Your National Beekeepers Association (NBA) is the statutory management agency for American foulbrood control, responsible for ensuring programmes to find and destroy the disease in beehives are carried out competently. My role is one of oversight of the annual operation plan. I have this role because there are coercive powers involved. These include the power to levy beekeepers and the power to destroy hives and other equipment infected with AFB without compensation.

The objective for the next four years of the strategy is to reduce the reported incidence of the disease by 10 percent, on average, each year, starting from this year. Last year's incidence in hives was 0.38 percent. That is a good starting point as this strategy takes effect. This disease has been under statutory control since 1906 because of its devastating effects on New Zealand beekeepers.

By 2007-08 the incidence could be down to 0.1 percent of hives, and elimination of the disease could be in sight. The Pest Management Strategy budget for this year is $134,000 raised as part of the statutory bee products commodity levy which also funds administration of the NBA and generic marketing activities.

Your industry has chosen to use a multi-purpose bee products levy. The disadvantage of the levy system is that you have a large number of bee keepers who can annually opt out of paying the levy, if they have 10 or less hives, at three or less sites.

There appears then, to be two main questions as the strategy beds in. One - is the need for small scale beekeepers to make a statutory declaration being enforced when they chose not to be levied? And two - is the threshold setting appropriate for your industry? The rules can be amended, provided the industry if of a mind to do so.

I expect there is already some lively debate over these issues. The AFB strategy encourages self-management of the disease. Competent beekeepers can take on their own management plans. They can also inspect neighbours' hives, by agreement.

Using industry expertise makes a lot of sense when there are 300,000 hives to be covered. This is an example of the considerable sharing of knowledge going on in the industry. Experienced people appear to be ready to advise new comers on looking for signs of disease and other production matters. The apiary register is a specific example of Government : industry partnership. The main function of the MAF-administered apiary register was to manage and report American foulbrood, so when the industry took up full responsibility for the disease it was logical that the register should come under NBA management.

A contract assigning the apiary register to the NBA has been prepared for negotiation with MAF. The document recognises the wider interests of all the parties. The NBA uses the register to collect the statutory bee products levy, and to communicate with the industry as a whole. MAF will access apiary locations for surveillance and investigatory work. Honey and bee product exporters will need location and AFB data for assurance purposes including residue sampling programmes. My office needs progress and audit reports.

Continuity of the apiary register under an assignment contract has several advantages. It enables continuity of Crown ownership and continuity for the industry in terms of day-to-day operational uses and maintenance. It also means beekeepers have not had to reconstruct and re-submit extensive geographical data and hive statistics. Database maintenance work is not duplicated and the Crown need only pay for the information it needs. As well as the national pest management strategy there are also mechanisms for the management of exotic organisms. MAF will, where directed by the Minister, ensure that exotic organisms affecting the bee industry are managed where it makes economic sense.

It will encourage your industries to have the capacity to accept and resource agreed roles in the management of exotic bee diseases. In consultation with your industry, MAF will develop response plans to manage exotic organisms, define the role of the bee industry and MAF and where appropriate share the costs of eradication. A process for deciding whether exotic bee diseases should be covered by a national PMS is underway. MAF and animal industry representatives are engaged in doing this across the board for the 32 most significant animal diseases.

This list includes European foulbrood. A technical focus group, with people from your association included, is developing a control plan to be reviewed by internationally-recognised apiculture experts. The plan will then undergo cost-benefit analysis and then be made available for public comment. Changes to the food side of the bee industry will complement biosecurity safeguards administered by the NBA and in the new MAF Biosecurity Authority. Animal health and food safety are two strings to the generic marketing activities available to the NBA and any sub-groups within the bee industry. The new Ministry of Food, currently the Food Assurance Authority within the Ministry of Agriculture and Forestry, will take responsibility for food safety regulations and overseas market requirements for honey and edible bee products.

The Animal Products Bill currently before Parliament will repeal those remaining provisions of the Apiaries Act which are still required for food safety and quality assurance. Most of the Apiaries Act has already been subsumed in the Biosecurity Act or the AFB strategy order. The Animal Products Bill and food safety legislation generally are moving to implement more self-monitoring than having an outsider coming in to do a spot check on you.

As commercial beekeepers you will have the opportunity to assess and manage your own risks. It will then involve an independent verification agency confirming to the Ministry of Food that your food production is fit for its intended use. They will also report to you, as the operator, about where improvements can be made.

Food assurance and biosecurity are not just domestic issues. It is also vital that our borders are effective. The healthy status of NZ honey bees of itself confers on your industry an added competitive advantage in world markets. This advantage has to be protected.

An example of this protection in action was seen earlier this year. The Christchurch district court affirmed the importance of excluding exotic bee diseases such as European foulbrood when the maximum sentence under the Biosecurity Act was imposed when bulk bee pollen was imported and falsely labelled as cornflour.

The High Court judge took some of the sting out of first sentencing but the final result is a strong warning by way of legal precedent. One man was imprisoned on three sentences and the lesser offender received three suspended prison sentences. MAF initiated the original investigation as a result of a complaint by the NBA. Working together works.

Illegal imports of honey in travellers luggage are detected by x-ray, dog searches, passenger profiling and spot checks. New legislation for instant $200 fines for erroneous declaration forms will soon provide an additional deterrent.

The flipside of protecting our borders is enabling the industry to have fair access across the borders of our trade partners. Last year you exported Queen bees and bee packages to Australia, Africa, Canada and the Pacific Islands but not the United States. This is despite years of trying by your industry and MAF. However recently, we've started to make progress because the Sanitary and Phytosanitary Measures Agreement provides agreed standards against which the US response can be measured.

If we are not satisfied with the US response, we have the option to raise the issue publicly with the World Trade Organisation. Under an agreement the US response must be based upon an adequate scientific justification. If we are not satisfied after this stage, we have the option to enter formal consultations, and if that fails, there is the option of taking the honey bee case to the trade equivalent of the World Court - a WTO Disputes Panel.

As with all our exports, market access is pivotal to future prospects. That is one of the reasons the Government is putting such emphasis on hosting APEC. APEC involves the meeting of 21 economies who share an ultimate goal of free trade and investment. These countries include 42 percent of the world's population and 57 percent of the world's economy. Whether you are planning to export bee or beef, APEC is important. The

challenge for the Government, as the chair, is to move the process forward and influence the agenda. Tied to market access is the issue of genetically modified food. This issues has a direct impact on your industry. The Government acknowledges that people have a clear right to be informed about what they are eating. The debate on genetically modified foods isn't primarily on food safety as such - it tends to be characterised as the right of consumers to know what they're eating, and how it has been produced.

That comes down, in regulatory terms, to a decision on how best to label the process which produced some or all foods. New Zealand has already adopted a joint standard with Australia to label foods where the nature of the food has been changed by genetic modification. We are currently in the concluding stages of working out how that standard might be further extended to cover other foods with some connection to genetic modification.

As you will appreciate the issue is inherently complex and further complicated by those who are opposed to all genetic modification and use scare tactics to swell their numbers. There has to be a substantive public debate on ethical, cultural and safety concerns. Good science and silly science are competing for public acceptance, if not public understanding. The Independent Biotechnology Advisory Council has been charged by the Minister for Science, Research and Technology to stimulate that public debate.

To date the debate has been fairly one sided. The claims of the alarmists have been given unquestioned credibility. They have been allowed to unsettle many with over-the-top claims that have little or no scientific basis. Hearing these claims, many New Zealanders have become uncomfortable. The Government is very concerned about ensuring food safety in today's environment. Given the problems of BSE in the United Kingdom, dioxin scares in Belgium and microbiological food poisoning outbreaks in the United States, it is important that we have a robust food safety regime which this country already has.

I would like to now turn to briefly talk about wider issues affecting your industry. The National Government has just completed a two week tour of New Zealand's rural heartland. Two of our rural MPs, John Carter and Eric Roy, have visited woolsheds, cowsheds, country halls and country pubs listening to rural New Zealanders. I was pleased to join Eric Roy on his South Island part of the tour, when he visited Canterbury.

The resounding message the Government heard was that rural New Zealanders want us to lock in the gains of low interest rates, low inflation, lower taxes, lower business costs; and lower import tariffs resulting in cheaper goods and services. The fall in interest rates is perhaps our most important achievement for the rural sector. It translates to real savings in interest rates costs compared to 10 years ago when Labour was last in Government. 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, bailing twine, chemicals, fuel and gumboots. During the tour the MPs have taken the time to explain that only a National-led Government is committed to locking in and building on the gains we achieved for the rural sector so far.

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. In the past, fuel tax, subsidies and just building more roads were the only tools available to influence driver behaviour. Road pricing, where drivers pay for their actual road use, based on time of day, vehicle type and location has always been seen as a better way of influencing driver behaviour, but until now there has been no practical way of implementing road pricing.

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 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. Last weekend the National party confirmed its commitment to lower taxes, maintenance of quality social services and fostering of a prosperous economy. This then is the environment in which your industry operates.

In conclusion I would like to wish you luck in your industry. As I began, innovation will be the key to New Zealand's and your future. The signs are good for your industry. The challenge is to harness your excellent products, your good ideas and your commitment to your industry and to exploit the economic environment the Government is building. Thank you