Financial Review Debate — Ministry of Agriculture and Forestry

We can see from the financial review that, by and large, agriculture is doing pretty well in this country, despite the high dollar. In this environment it is easy to be complacent, but I think we have to be aware that there are some worrying signs on the horizon. It is clear that milk solids are still very competitive internationally, but that is virtually the only commodity that is so. It also will face some serious crises in the future, and we need to be thinking about them now.

Let us look at our niche markets in agriculture that are doing exceptionally well. Let us look at wine. Internationally there is a wine glut. In many places one can get only about $2 a litre for wine. Has that had the remotest impact on New Zealand wine? The answer is no. New Zealand wine is doing very well. The reason for that is quality. We produce the best wine in the world. Let us look at kiwifruit. Zespri has marketed itself extremely well. It has gone for low chemical inputs and high-quality products. It is doing very well. Let us look at Saxon wool. The bottom has fallen out of the merino market. Saxon is at the top end of the range. It is doing exceptionally well. We do quality well.

We need also to be aware that consumers are becoming very aware of things other than appearance and taste in food. They are concerned about pollution, animal welfare, chemical residues, and “food miles”, which is a major problem for us as a little island in the South Pacific. Clean, green food products are what New Zealand does well. We have been doing them for many years, and that is the way we have marketed ourselves for many years.

I urge members to look at the report of the Parliamentary Commissioner for the Environment entitled Growing for Good, because it has highlighted a number of difficulties that New Zealand farmers will face in the future. We can see those problems as barriers to growth and development, or we can see them as opportunities. I think we need to look at them as opportunities. For dairy farmers, effluent runoff and fertiliser runoff have become significant social and environmental negatives. But we can turn to balancing fertiliser inputs. We can fence off riparian margins and plant them with trees. Those may be expensive things in the short term, but they are a great medium-term investment.

We also need to look at natural events. The storms in the Manawatū and Whanganui last year caused enormous slips in the high country at the headwaters of streams. There were huge sediment dumps in the lower reaches of many of the rivers. We need to identify those marginal lands—and almost all of them have been identified—and retire them from grazing, because grass simply cannot hold the soil together. The areas need to be replanted. If those areas, along with riparian margins, are reforested, it will slow down the amount and velocity of runoff.

But fundamental to farming in this country is economics. That is what it is all about. As a country we earn 65 percent of our export income from primary production. As farmers we have to be aware that the focus is moving away from productivity and on to quality. No longer do we have to say that every blade of grass counts. We need to farm smarter. The people who are doing very well are the people who emphasise quality. Again, we should look at what is happening with producers of wine, kiwifruit, and Saxon wool. They are smart operators who are striving for quality. They leave no stone unturned, and they are doing exceptionally well.

Dairying cannot be complacent. Farmers are doing well at the moment, but there are big problems ahead. Consumers are increasingly concerned about pollution, runoff, effluent, and the way farmers treat their animals. As a farmer, I am aware that it is often not popular to consider doing things differently. There is a lot of peer pressure in farming to continue doing the things we have always done. But we have to think about the pressure that consumers can bring to bear on us. Let us look at what happened to the Australian meat industry when it was discovered by consumers overseas that farmers were mulesing their sheep. I will not go into what mulesing is all about, but it became a huge issue in terms of the pressure on Australian farmers.

I take the opportunity to speak on the review of the Ministry of Agriculture and Forestry. The report back from the Primary Production Committee is testament to the lack of issues the select committee exposed when going through the review. I compliment all the staff at the ministry on the brilliant work they are doing. Those main industries, agriculture and forestry, are, of course, the core of export generation in this country. As a Government we acknowledge that, and I think it is important for us to acknowledge it as a Parliament at this particular point.

I will run through a few of the operational issues that the ministry has been confronted with. Biosecurity, which was raised very briefly by the Green member Ian Ewen-Street, is a very important issue on which the ministry focuses. The ministry has been party to Exercise Taurus, which the Green member, as a member of the select committee, has observed. It is very important that we have structures in place so that the ministry can react to any breach of biosecurity in this country. I think that it has done a lot of excellent work; that is supported by the fact that the select committee did not identify any problems in that regard.

The issue of genetic modification was not raised by the Green member—I was quite surprised. He was very focused on the “clean and green” issue. The ministry and this Government is very focused on clean, green food production. We are cautiously approaching the issue of genetic modification. Officials are working through all those issues, and, in spite of the Green member’s cynicism, we will not have widespread production of genetically modified organisms. We will look at that science and investigate it very carefully, as officials are doing, before we move ahead in that area—we must do.

The officials are involved heavily with trade negotiations. They are providing advice to the Minister, Jim Sutton. It is very important that we break down the barriers to trading our clean, green food products in the world markets. It is a very big part of the focus of the ministry, and it will continue in that area.

The Sustainable Farming Fund has to be one of the highlights of the Government’s initiative in terms of agriculture and forestry. It has committed another $10 million on an annual basis to that fund, which is assisting hundreds of projects up and down the country to look at better ways of utilising land, labour, and technology in order to give us sustainable production into the future. Those are projects that would not otherwise get under way. They needed seed funding and the support of officials from the ministry, and we have seen some brilliant outcomes from those projects. Again, I compliment ministry staff, the Minister, Jim Sutton, on his initiative in initially putting that programme in place when Labour came into Government, and the Government on continuing to fund it.

💬 Ian Ewen-Street: Why didn’t the Nats speak on this?

I would just like to highlight those things for the member. He quite rightly pointed out some of the positive things that are happening, and I thought I would follow on from his good initiative.

💬 Ian Ewen-Street: Why didn’t the Nats speak on this?

I am not sure why the National Party is not speaking about this. It has traditionally seen itself as the so-called champion of the agricultural sector. I know, and farmers know, that we as a Government have done more to focus on sustainable production into the future than the National Party has. We have not been bogged down by ideology about producer board reform. We have worked with every industry to put in place better law to assist development into the future. There are some challenges ahead of us for a number of those sectors—particularly the apple industry and horticulture—but industries are getting on with it in the knowledge that this Government will assist them. It will not tie them down, or tie them back, to an ideology as the National Government did.

The issue of water, its allocation, its utilisation, and the protection of its values is very, very important. It is one of the big areas that the ministry has focused on. The ministry is doing a lot of work on that. It is in the early stages of working through consultation. As part of the Water Programme of Action it has undertaken consultation with communities in 27 centres in New Zealand. That programme of action is vital for all New Zealand—for the production of our exports and the protection of our waterways and our way of life. The ministry is also focusing on the area of access in order to assist in attaining the appropriate balance between access to waterways and the protection of farmers’ rights.

I have every confidence that the good work the ministry did in the previous year will continue on into the future under this Government. I take the opportunity to thank each and every member of the ministry staff for the good work they have done, and the select committee for being astute enough to realise that the ministry has done that good work. We look forward to working with the ministry for many years to come.

Report noted.

Ministry of Education