• John Luxton
Associate Minister of Agriculture


Special guests, ladies and gentlemen. I am pleased to be here this evening as the Associate Minister of Agriculture, responsible for the Vegetable industry. Your industry is an important industry and your contribution as professional growers, processors and marketers is important to the economy.

"Situation Analysis of the Vegetable Industry" by Crop & Food, gives some interesting figures;

Land used for vegetable production 50,000 ha

Number of commercial growers 4,000

People employed 25,000

Farm gate value $405 M

Total retail value (estimate) $1.25 B

Household spending, fresh vegetables $430 M

Household spending, process vegetables $45 M

Export value, fresh & processed, FOB $327 M

Hospitality, Restaurant & Institution spending $495 M

In 1996 vegetables accounted for 3.65% of New Zealand's $9 B total food and beverage exports, about the same as kiwifruit and apples and pears.

Traditionally most vegetable exports were processed, but over the last ten years the industry has begun to export large quantities of fresh vegetables. The total value of fresh vegetable exports has increased from $60 M in 1989 to $170 M in 1996. Volumes increased by approximately 40% from 1993 to 1996 and values went up by 25%. Processed exports went from $77 M to $157 M in the same time.

Fresh exports are dominated by two products - onions and squash - accounting for 80% of the market. In recent years there have also been significant increases in fresh and/or processed potatoes, asparagus, carrots, corn and capsicums. Interestingly, we export more onions by value at $65.4 million, than exports of wine at $63.5 million!

The world however doesn't stand still. As you have probably heard before, those that do stand still, eventually get run over. So where to from here? How can we build on what has already been achieved?

The point of this meeting is to seek to facilitate co-operation by exporters with the NZ Vegetable & Potato Growers' Federation in the ongoing development of a strategy to carry the vegetable industry into the next century. We must do this on a sustainable, and growing profitable basis for all the parties (growers; auction houses; NZ retailers; exporters; & all the distribution links in the system - overall, quite a substantial economic impact in the domestic economy).

VegFed has been working for two years, with the support of Crop & Food and TRADENZ, to pull together the strands of a strategy for the industry. So far, most of the work has been with growers and the domestic market, although I understand that at an earlier brain-storming meeting in Auckland exporters made some valuable contributions.

The industry is continuing to work on its strategic development, and in terms of the export side, this means close consultation with exporters.

"Foresighting" is a concept which the industry is embracing. Many of you may be familiar with the foresighting work which the NZ fruit industry has undertaken over the last few years. In the Foresight process, an industry decides what future position it wants to command in the market - say, in 10 years time. It provides a target.

Having decided where it wants to be positioned, it then decides on strategies to carry the industry from where it is now to the desired future position. Foresighting is not a matter of reaching forward from existing paradigms, but imagining new paradigms and then figuring out how to reach them. It can be a tool which enables us to get ahead of our competitors in the future.

This Government has undertaken a similar foresighting exercise with its document "Towards 2010" because we have to ensure that we are headed in the right direction as a country in order to keep pace with change both domestically and internationally.

It is an increasingly competitive world. Retailers (not producers or exporters) wield huge and increasing market power, vegetable consumption is fairly static, there is increasing competition and pressure on prices, and consumers can be fickle. They are pushing on factors such as food safety, food fashions, and price. It is important that our free enterprise vegetable export industry is aligned in terms of where it is going & how to get there.

Tradenz espouses the idea of "co-operating to compete". Working together in terms of the industry's strategy development in general and overseas market development can powerfully enhance the individual efforts of exporters such as yourselves.

This approach has been used in a wide variety of export sectors out of this country. Sometimes this is done formally through the Horticultural Export Authority, at other times has taken place through Joint Action Groups (JAGS).

It is in New Zealand's interest that we co-operate to align our strategies, so that we maximise the value of foreign exchange earned for our country by the vegetable industry. This will maximise the economic and social benefits which your industry contributes to New Zealand.

In conclusion ladies and gentleman, thank you for having me here this evening. I would like to reiterate the benefit for everyone in this important and vibrant industry in developing an overall industry strategy as you meet the challenges of marketing into the increasingly dynamic international market for your produce. Thankyou