Speech to Horticulture New Zealand annual conferencePrimary Industries
Today I want to talk to you about my priorities for the primary sector, of which horticulture is a major part. In particular I want to talk about the two goals that the Ministry for Primary Industries has – to grow and protect New Zealand’s economy.
As you all know, the primary sector is the powerhouse of our economy. It is worth around $30 billion a year to the New Zealand economy and makes up around 72 per cent of our exports.
Your industry is a major part of this equation, with New Zealand’s horticultural exports earned $3.6 billion in the year ended 31 March 2013. The total value of horticultural products produced is around $6.6 billion.
Our New Zealand’s largest export destination by region for horticultural products is Asia, which takes around a third of our exports.
Outlined in the Horticulture Growth Strategy is your plan to double the industry’s value by 2020. I congratulate you on that ambitious goal. It fits in with the Government’s ambitious goal to double the value of our primary sector exports by 2020.
It won’t be easy, but we have a clear plan on how to get there.
New trade deals will play a big part, like the free trade deal with China which has already been a major success.
Since signing the deal in 2008, our exports to China have tripled – going from $2b in 2007 to $6.9b in 2012. In April this year China overtook Australia to become our largest export market.
The rise of developing nations, particularly in Asia, represents a huge opportunity. As these populations grow and become wealthier their appetite for safe, high quality food products produced by New Zealand will continue to grow.
This is why we are negotiating free trade deals with India, Russia and Colombia, and working hard on the Trans Pacific Partnership which includes USA and Japan.
The potential in Latin America is also huge, as I saw first-hand on my trip with the Prime Minister earlier this year.
To achieve the Export Double we will also need to improve our productivity. Two key policies will be the Primary Growth Partnership and increasing irrigation through water storage.
Farmers have made great use of science, technology and innovation over the years to become world leaders.
For example, we now produce the same amount of sheep meat today as we did in the early 1980s but with around half the number of sheep. This proves that farmers are innovators through using science and genetics.
The Government is now giving innovation a major kickstart with the Primary Growth Partnership (PGP).
A total of $684 million is being invested by Government and industry into 16 projects to boost productivity and sustainability in the primary sectors.
This is a major research boost, and the potential benefit to the wider economy from these projects is over $7 billion per year from 2025,
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.
I encourage the horticulture industry to get involved in this innovative scheme, and come up with proposals that you can discuss with MPI.
The drought this year has also shown the urgent need for irrigation development.
New Zealand is lucky to have a plentiful supply of freshwater, but we need to do a better job of managing and using it. It drives our economy in the same way that minerals do for Australia and oil does for Saudi Arabia.
Only two per cent of the rainfall in New Zealand is captured for irrigation use, with the rest just pouring out to sea in rivers. Clearly, we don’t have a shortage of water in this country – we have a lack of water storage facilities.
Increasing irrigation could see a further 420,000 hectares of irrigated land becoming available for a range of uses, creating thousands of new jobs and boosting exports by $4 billion a year.
This is why Budget 2013 has confirmed $80 million in funding for regional irrigation projects. In total, the Government has signalled plans to invest up to $400 million to encourage third-party capital investment.
A new Crown company was established on 1 July to act as a bridging investor for irrigation projects. This will involve short-term, minority investments to help kick-start these regional projects which otherwise might not get off the ground.
At the same time, any new irrigation projects will have to show they are sustainable, balancing economic and environmental outcomes. We are seeing this with the proposed Ruataniwha scheme in the Hawkes Bay which is now going to a Board of Inquiry to consider all the evidence.
Now I want to talk about the second part of MPI’s strategy – protecting New Zealand from biosecurity threats.
Earlier this month I spoke to a biosecurity conference at Auckland university where I outlined how biosecurity is my number one priority as Minister. I also know it is a very important issue to your organisation.
Overall New Zealand has a world class biosecurity system, and it is worth giving that some context.
As an island trading nation, there will be risk of an unwanted pest being introduced to New Zealand. It is simply impossible to eliminate all risk.
Even if we completely stopped all trade to and from New Zealand, even if we halted all movement of people in and out of New Zealand – something I’m sure no one in this room wants - we would still not completely eliminate all risk.
So the question is how we best manage this risk.
To illustrate our challenge let me provide some context - around 175,000 items come across our border each day, and we receive around 10 million travellers a year.
It is simply not possible, for example, to do an exhaustive search of every item in every container in every consignment that arrives in New Zealand.
So what we need to do, and what MPI do, is to work smartly to manage risk at every level of the biosecurity system and to provide the best level of protection.
Before I give more detail, I want to clarify an important misconception that some opposition parties have around this year’s Budget.
To make it crystal clear: funding has not been cut for biosecurity.
Appropriations for ‘border biosecurity monitoring and clearance’ were temporarily higher in last year’s Budget because $5 million in funding was brought forward from 2011/12 to pay for the Joint Border Management System (JBMS), and $1 million for the merger to create the Ministry for Primary Industries was also brought forward.
It is normal practice for costs for major projects to be variable across different financial years, and shows why it is misleading to just look at the headline figures.
Overall funding has doubled since 2000, and we now have a major programme of work underway to improve what is already a world-class system.
MPI are in the process, as trade increases again, of bolstering their staff. That is why late last year we recruited 45 quarantine inspectors. In January we recruited another 11, and we are in the process of recruiting another 30 quarantine inspectors.
MPI’s biosecurity detector dog programme has also expanded its operational capacity, with 34 teams now active nationally.
I visited Auckland Airport a few months ago to meet some of the new detector dogs, who you’ve just seen in action. I was lucky enough to choose the name ‘Clara’ for one of the young puppies.
I would also like to comment on the direct exit or green lane initiative which comes under political attack from time to time.
Let me be clear, every international passenger who comes through our airports undergoes a form of biosecurity screening. What this initiative does is it allows MPI staff to focus their resources on the high risk passengers, rather than the low risk passengers.
What those critics who hark back to the days of 100% screening don’t realise is that in 2007, with 100% screening, surveys picked up non-compliance in the order of 2%. With Direct Exit in place those same surveys are showing compliance that is as good as when we had 100% screening.
MPI and I are always looking to make improvements to our biosecurity system.
Today I’ve announced that eleven x-ray machines will replace existing machines at Auckland, Christchurch, Wellington and Queenstown airports used to inspect both the checked-in and hand luggage of people arriving in New Zealand.
Auckland and Christchurch will also receive new technology to reduce the amount of handling required to load and unload luggage onto and off the x-ray machines.
The new x-ray images will be of a better quality than we currently have, which will make Quarantine Inspectors’ jobs easier and more efficient. This is the first step of a major equipment replacement programme.
Earlier this month I announced that MPI will be trialling a new X-ray image transfer process with Melbourne Airport that will enable the biosecurity screening of luggage before it arrives here.
Any bag containing biosecurity risk items can now be matched with the passenger, who will face further scrutiny by officials upon landing.
In the longer term, X-ray image transfer could be applied to routes with higher biosecurity risk, such as those from South East Asia, parts of Europe and the Pacific.
New Zealand is leading the game here. A number of countries, airport companies and airlines are watching the trials of this technology closely. The system could provide another powerful tool for MPI to protect New Zealand from dangerous pests and diseases.
Good progress is also being made on the Government Industry Agreement on Biosecurity Readiness and Response (GIA). The GIA will provide an opportunity for industries to identify the biosecurity risks of greatest concern to them, and jointly invest with government to better manage those risks, across the biosecurity system.
I want to thank Horticulture New Zealand for their constructive engagement in this process.
This reinforces that biosecurity is the responsibility of everyone. As a Government we want to work closely in partnership with industry, councils and communities to continually improve our systems.
I am excited about the opportunities we have to boost productivity and increase economic performance in the horticulture sector.
I know that there are challenges to achieve the ambitious goals that we have all set ourselves. But, I am looking forward to working with growers to tackle these challenges, and to make the most of the opportunities that come our way.