Headline: Horticulture’s place in New Zealand’s future: speech to Horticulture NZ Conference, 30 July 2013
Thank you for the invitation to address you today. Before I continue, I would like to take this opportunity to acknowledge your outgoing president, Andrew Fenton.
Andrew has been a key player in your organisation both as a pioneer in commercial kiwifruit growing and as an industry representative.
With more than 20 years involvement in grower representation and governance capped by eight years as the inaugural Horticulture NZ president, his departure will leave big shoes to fill.
Congratulations to you all. Your combined sectors in horticulture are the star performers in New Zealand’s economic progress. Since the year 2000 your export contribution to our economy has more than doubled. You are now over 7.5 % of total exports, the 6th largest sector at a time when the world population is growing and demand for food expected to increase dramatically.
Some say we are sitting pretty. The reality however for many Kiwi growers and producers is that payments for our exports and the cost of production have not always delivered better returns for people on the ground.
Coincidently over the last couple of months I have been told by a few visitors to New Zealand that our food is very expensive. One incident was at a coffee cart where two backpackers from Germany could not believe how much food costs in this country. The second was a Kiwi friend who has lived around the world and now resides in California. They could afford to pay the retail prices but they did wonder how many Kiwis managed, particularly those on lower incomes.
It’s a strange reality for too many in a country that survives on our ability to competitively produce safe food which we export to countries around the world. The obvious conclusion that many consumers draw is those who grow and produce the food are making a lot of money. That is, as you know, far from the reality for most growers.
Combine the food situation with the housing costs in this country that are some of the highest in the world relative to our average incomes and we have a challenging situation…..in a country that grows and exports some of the lowest cost sustainably harvested timber in the world.
So how can we claim to be Godzone when the basics in life are so difficult to obtain for so many low income Kiwis. Not just those in abject poverty but good hardworking Kiwis on average wages who have been brought up believing we have the best country in the world.
Well the analysis says we have a number of challenges. The vast majority of farmers and growers of food don’t receive the premiums that consumers would believe from the prices they pay. Meat, milk, vegetables and fruit all cost a lot more than farm gate returns and these farm gate returns are just viable for many of our farmers.
Why then does everything cost so much? Fingers are pointed, but excuses are many and varied. Most of the simple conclusions are generally wrong.
I don’t know the answers, but I do have some theories and they point to the other side of the Tasman. Supermarkets, banks and big business all play a large part in our Kiwi cost of living and we rarely connect the dots to begin a process for improvement.
There have been a number of reports analysing the primary sectors over the last few years starting with the wasted Red Meat Strategy and running through a number of bank industry updates. The most comprehensive is the third KPMG Agribusiness Agenda. This year it is being released in a number of documents and I recommend it as a very worthy strategic read.
It has correctly identified for the third year running the number one concern for agribusiness leaders in this country. That is …… Biosecurity.
Under the last Labour government, we doubled funding for biosecurity from about $90M to approximately $180M in line with the increase in tourist and import activity. It also coincided with the doubling of production from the horticulture sector.
The current Minister for Primary Industries no doubt also told you this morning that funding had doubled since the year 2000.
What he failed to tell you was that his Government has contributed nothing to that additional resourcing in the last four years and our country faces major risk because of that failing responsibility.
The single biggest horticulture sector, Kiwifruit, is plagued by PSA because of the failure of the government system to protect NZ from its introduction.
Unfortunately industry participants must also carry some responsibility for this biosecurity disaster. We have just recently discovered the giant white butterfly – a threat to brassica in the Nelson region and possibly further afield if the Department of Conservation cannot adequately control it. That delegation of responsibility to the underfunded DOC rather than core biosecurity staff is in itself a major concern. But it is in line with current central government objectives to shift responsibility onto industry and anyone else who shares the potential cost of any incursion.
The KPMG report noted “There is a clear view that the industry needs to take greater ownership of the biosecurity system to ensure relevant risks are identified and managed appropriately”.
For me, a comment like this is alarming. It reflects what has happened to our biosecurity system over the last four years. On-going cuts in front-line biosecurity inspections, a determination to relax import standards, and the creation of a super-Ministry that has seen hundreds of experienced and knowledgeable staff out of a job has meant that in reality, farmers and growers are very exposed to biosecurity failure.
The Minister’s announcement that he will now purchase a few more x–ray machines is a bit odd when for so long he has claimed that x-ray checks at the border are unnecessary.
This Government’s enthusiasm to allow imports and tourists to flow through our borders with ease is compromising our border security. Under the new Government Industry Agreements, sectors regardless of their capability have to share in the cost of a biosecurity incursion but with limited input to the border controls that reduce the risk.
We have two current examples of this with the pork and beekeeping industries joining forces to take court action against MPI’s determination to lower import health standards and allow imports that could potentially introduce disease and viruses fatal to our domestic industries.
And it was down to two Kiwi farmers who had to make a privately-funded visit to Malaysia to check out palm kernel facilities and bring back proof of biosecurity lapses there before MPI would take their concerns seriously. Even then it took another seven months after their return before MPI acted.
I have just today received a list of some of the organisms that have hitched a ride in PKE.
The most recent scare was the discovery of an animal limb in Palm Kernel Expeller (PKE) on a Bay of Plenty farm. It took MPI 4 weeks to visit the property and weeks more to identify the limb which is a sign of the National Governments new Biosecurity system.
God help us all.
Your commitment to Country of Origin Labelling is in my view and now that of the Labour Party, absolutely necessary to capture value for our high quality produce from the international market place. And it’s also good for Kiwi consumers. I have proposed to the Minister that she remove the current exemption that we have from the ANZFSA agreement by changes to the Food Bill that she wants to pass through Parliament smoothly. We wait in anticipation.
Country of origin labelling is required in Europe, US, Canada and Australia. Although New Zealand shares the Australia New Zealand Food Standards Code, the labelling requirement only applies in Australia. Here is it voluntary.
The official reason stated for not adopting mandatory country of origin labelling is that the costs to consumers, industry and government far outweigh the benefits. That is bovine excrement.
I say that New Zealand’s approach is out of step with other developed economies.
I also argue that New Zealanders have a right to know where the food they eat has been grown and produced.
We have irradiated Australian tomatoes and no means of giving consumers here a choice about whether they want to eat them or local non-zapped produce.
With the recent industry agreement that certifies New Zealand produced infant formula, we have a ridiculous situation. Chinese mothers will now be fully informed about the source of their Kiwi infant formula powder but New Zealand mothers will not be able to know this because our labelling system is voluntary.
As your domestic customers here increase their demand for clean, green and safe food, produce coming from other parts of the world should be labelled to show where it comes from, how it was grown and processed.
You can offer food that customers want – food with a story of environmental protection, low or zero residues, animal welfare, safety, and traceability. Not every producer in the world can do this and consumers should know the difference.
I have previously applauded Horticulture NZ for the strategic approach you have taken to industry and sector development.
Your target of a $10billion industry by 2020 was ambitious and necessary if NZ is to grow its export earnings. I hope you still aspire to that goal.
The organisation is necessary and beneficial for the large number of strong minded business leaders from different product groups who all face the same challenges in the international market place.
However there has been and will always be, challenges to the mandate of Hort NZ and your levy income because of dual payments for industry good activity in sectors from different business and philosophical positions. I see this conference is no different.
Some stakeholders question how much leadership and coordination is necessary across horticulture.
I have always supported and advocated for coordinated and collaborative marketing that offers some strength to countervail the ever growing dominance of international supermarket chains and purchasing consortia.
However individual levy payers and sector groups should always scrutinise your activities to improve the functions of Hort NZ if it is to remain a relevant and viable industry organisation. I am concerned that the previous Ministers direct attack on Horticulture NZ for your strong advocacy for better biosecurity has resulted in a more timid approach to Government from this organisation.
When the going gets tough – the tough get going. And I’m still waiting for more action from Hort NZ and individual sector groups while we face constant and arguably increasing biosecurity threats from systems that have been squeezed and experienced staff who have been side-lined.
I am not in favour of protectionism nor am I anti-trade but there are two kinds of food traded in the world and we have to decide where we sit.
On the one hand, we have the produce that enters the giant commodity pool, cheap products that get moved around the world with no focus on where they are from. The producers of these ingredients get low prices and capture very little of the value chain with most of that generated in processing and retailing.
And then there are the high quality foods, products with good reputations that customers will pay more for. Real food grown by real people in a real country that stands behind its food exports. The producers of real food know their customers and capture much of the value from the consumer all the way back to the point of production.
This is where New Zealand primary produce must and does sit and this is what we risk if we lower our biosecurity standards just so we can fast track tourists through the airport or allow our produce to be dumbed down and sold cheaply.
Labour in government will help all exporters through monetary policy that considers the effects on exporters not just inflation. We will place appropriate controls on speculative investors in the housing and rural property sectors. This is to prevent overvalued and unaffordable Kiwi assets that contribute to demand for borrowing and put upward pressure on our already over-valued currency.
We will ensure that manufacturers who are the value added component of our primary based economy are not swamped by low value imports. We believe in an economy that is competitive with the rest of the world but collaborative internally so that we maximise our opportunities from great skills, talents and our natural resources.
There are many issues that I could speak on today relating to your future. The current review of the Horticultural Export Authority Act must improve the ability of sectors to implement disciplined marketing particularly in small and emerging product groups such as feijoas.
The generous allocation of funding for some sectors from the National Government’s Primary Growth Partnership programme seems to have overlooked the value and potential in horticulture. This must change.
The widespread use of the Recognised Seasonal Employer scheme is a core component of horticulture production but questions remain over its potential for expansion at a time when New Zealand faces unsustainably high levels of unemployment. Labour introduced and backs RSE but is committed to employment for every New Zealander who wants to work first and foremost.
In regard to environmental management by regional councils, I believe that it is very important to share responsibility for water quality while reminding the towns and cities that untreated urban run-off is a huge contributor to water degradation. The region with the worst quality water in the country is Auckland in fact not Manawatu.
Attracting and retaining the smartest and most talented youngsters into horticulture is vital to the success of this sector. I applaud the initiative that will be celebrated tonight in the Young Grower of the Year awards.
To conclude, I can assure you that Labour will offer leadership in primary industries where and when it is needed to ensure the best possible returns for growers, stakeholders and our country.
Thank you.
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