Speech to Executive Roundtable, Bangkok, ThailandPrimary Industries
Good morning and thank you for the invitation to be here. It gives me great pleasure to speak to you today about global food security, and New Zealand's journey to become a ‘kitchen of the world’.
Coming from a nation of 4.5 million people that feeds 40 million people around the world, I would like to offer a few insights on the topic.
New Zealand’s story
New Zealand has always been a farming and food producing nation. It is our passion, and part of our DNA.
The introduction of refrigeration in the 1880s meant we could export our meat and dairy products overseas, and for a long time we were known as the United Kingdom’s farm.
Things changed in 1973 however when the UK joined the European Economic Community, which meant losing our privileged market access.
This was a massive wake-up call for us as a nation, and forced us to diversify into new markets. It was the beginning of a major period of change.
There were more challenges in the 1980s as our economy struggled with spiralling debt, and an inefficient and heavily protected business environment.
Throughout this decade virtually all agricultural subsidies were eliminated. There was short term pain, and plenty of protests, but it did not take long before the agricultural sector started realising efficiencies.
Removing subsidies made us focus on producing what consumers around the world actually want.
To give just one example, New Zealand now produces the same amount of sheep meat as we did in the 1980s, but with half the number of sheep.
Having removed barriers at home, we looked to remove barriers to our food exports abroad.
New Zealand was the first developed country in the world to sign a comprehensive Free Trade Agreement with China. Since that agreement was signed in 2007, trade between our two countries has trebled.
We are also in the middle of the Transpacific Partnership negotiations - an agreement that would include 40% of the global economy.
Forty years on from Britain joining the EEC, New Zealand has completely repositioned its food production profile. We now export to over 200 countries and are recognised as a world leader.
The primary industries – including agriculture, horticulture, fisheries and forestry – are now worth around $30 billion a year to our economy, and make up around 70% of our exports. So food production and security are vitally important to our economy.
Challenges of the future
However, many challenges and opportunities remain ahead.
Environmental sustainability is a major priority for New Zealand farmers, who have invested heavily in sustainable and efficient farm management systems.
This increased focus has led to a range of industry-led voluntary initiatives that are helping to reduce the impact on the environment, as well as improving efficiency and enhancing brand value.
An increased focus on animal welfare has led to an industry that supports moves to strengthen animal welfare laws, and good cooperation between government, NGOs, and industry.
We are also investing heavily into science, research and development. The Government and industry are jointly investing $684 million into 16 cutting edge programmes, in what is known as the Primary Growth Partnership.
Some of the current projects include red meat sector collaboration, manuka honey trials, harvesting trees from steep land, improving the precision of seafood catches, and selective breeding of greenshell mussels.
An increased focus on consumer welfare has led to the development of a world class food safety system.
I know there has been a lot of publicity surrounding New Zealand's food safety systems in the wake of the recent whey protein contamination issue, in what turned out to be a false alarm.
This incident should not have happened. And the fact that this was a false alarm is no excuse for doing nothing. The New Zealand government is undertaking a full inquiry to identify the causes, and ways in which we can further strengthen our system.
I would like to add one final point to that issue. New Zealand is committed to openness and transparency when it comes to food safety. If there is a chance that our food poses a health risk, we will come forward. There is nothing more important to a food producing nation than its reputation, and we are committed to upholding ours.
Visit to Thailand
Now I would like to talk about why we are here in Thailand.
I recently attended the launch of ASEAN strategy by our Prime Minister John Key in Auckland. The strategy is about a strong shared history and a stronger future for 12 South East Asian nations, including New Zealand and Thailand.
The ASEAN - Australia - New Zealand FTA is about providing a platform for regional growth for the 650 million consumers in our region. This is not a zero sum game, because New Zealand's growth is not at Thailand's expense and vice versa.
Thailand, the second largest ASEAN economy, is in the thick of the fastest growing region in the world, a region with an ever expanding middle class, and that is increasingly demanding high value, high quality, and sustainably produced food and beverage products.
That is why the Prime Minister John Key and I are here. We have brought with us a delegation of 23 top New Zealand businesses, with world leading expertise in food and beverage production, agricultural innovation, information technology, and education.
It is in the interests of both New Zealand and Thailand that we do business together, share ideas, and learn from and build on each other’s strength and expertise.
Two way trade between New Zealand and Thailand is currently worth around $2.2 billion, which has doubled since 2005. There are around 100 New Zealand companies that are exporting or interested in exporting to Thailand.
Dairy products account for almost half of our exports to Thailand, worth close to $300 million. In total, our food and beverage exports to this nation total around $450 million.
The demand for New Zealand food products is strong in Thailand, where Greenshell mussels, kiwifruit and apples have become iconic "New Zealand foods". Thailand is now the third largest destination of New Zealand mussel exports.
There are more opportunities opening up for New Zealand companies in the higher priced commodities and value-add food and beverage products as incomes in Thailand increase.
Both of our Prime Ministers have committed to doubling trade by 2020 and that's why this visit is so important to keep us focused on that end goal.
Building and strengthening people-to-people relationships will be an important part of opening doors, and keeping them open for longer.
Meeting global demand
Trade is a crucial part of ensuring food security. Just as farmers need access to export markets to absorb their surplus production, consumers need access to foreign product, to fill the gaps in supply which will inevitably occur from time to time.
This is why it’s important for food-producing countries like New Zealand and Thailand to work together to make sure that rules-based trade applies. This gives food exporters and manufacturers around the world the opportunity to achieve economic wellbeing, for the benefit of everyone.
Fair, open trade in food benefits producers and consumers alike, while building food security.
One of the biggest challenges over the coming decades will be how to ensure our food production keeps pace with the ever growing demand.
The world population is set to reach 9 billion by 2050, and we are seeing rising standards of living in regions like Asia.
As these populations grow and become wealthier their appetite for safe, high quality food products will continue to grow.
This presents challenges for our two countries, but as I have outlined, by working together I’m very confident we can all prosper together.
Thank you again for the invitation to speak to you today.