Annual Review Debate — Agriculture and Land Information

We turn now to the financial review for agriculture and land information—Hon Damien O’Connor in the chair.

Thank you, Madam Chair. It is my pleasure, as the deputy chair of the Primary Production Committee, to speak to the primary sector annual review report, and I want to start by acknowledging the work from members across the House on this report. I’d also like to thank the Ministry for Primary Industries—MPI—for making available their senior leadership team to answer the committee members’ questions. That was incredibly helpful, as we were able to drill in to some detail on a wide variety of topics. I just want to thank Land Information New Zealand and Landcorp Farming Ltd—Pāmu—for coming in and answering the committee’s questions, and the Minister for being available, as well.

I just want to acknowledge at this point that the backdrop to our annual review hearings was, of course, the COVID-19 global pandemic, and while some of our primary industries fared well or better than expected, others were more affected by the COVID-19 restrictions that we saw last year. It’s also worth noting that as a result of funds from the COVID-19 Response and Recovery Fund, the ministry was able to fund initiatives from the primary sector, including retraining programmes for workers who had lost their jobs as a result of the global pandemic—for them to be able to retrain and move into primary sector work. There were also initiatives in pest control, food waste, and support for rural communities and animal welfare. I’m sure that during the course of this debate, the Minister will share more about the Government’s support for the primary sector and primary sector exporters throughout the global pandemic.

Mycoplasma bovis was also a focus of our committee. The committee heard that of the 260 herds identified in New Zealand with the disease present, 251 of those herds have now been cleared of M. bovis. The ministry advised that since the eradication programme began in 2018, over $180 million has been paid out in compensation. The ministry’s work to contain the disease is continuing through increased surveillance and tracking activities, and the National Animal Identification and Tracing system is a key part of this. The committee was pleased to hear that significant efforts have been made to eradicate M. bovis, but ongoing challenges are faced.

The committee was also very keen to discuss primary sector workforce needs, and in July 2020, we heard that the ministry launched the Opportunity Grows Here campaign to attract workers into the primary sector industries. The campaign’s focus is on providing job transition and promoting positive working conditions. There are challenges to meet workforce demands due to ongoing border closures, but the Recognised Seasonal Employer scheme has definitely helped, and there’s further work under way, we understand, to encourage more Kiwis to consider the primary industries as a viable career option.

Also of interest to the committee was Fit for a Better World—Accelerating our economic potential, a road map that seeks to support the recovery from COVID-19 and address some of the longstanding issues that the sector has faced. Forestry and wood-processing, and aquaculture were given as two examples of where the primary sector can grow its export value in the next 10 years. Water reforms, mānuka honey, and Pāmu’s conversion of some farms to organics, and the impact that that’s had on the improving of their farming practices, were also topics that were canvassed during the hearings.

As you can see, the Primary Production Committee had some robust conversations, resulting in a very thorough annual review report. Thank you.

Thank you, Madam Chair, for the opportunity to question the Minister through the annual review process. We were assured that this Government would be transformational, the problems that it addressed would be fixed and altered—a change for a better New Zealand. Why hasn’t this happened in rural New Zealand? Child poverty is worse, better educational standards are falling, and remedying housing issues in rural New Zealand couldn’t be any worse under this Government.

The rural sector has seen a plethora of shoddy lawmaking. Freshwater reforms? Well, far out! What a fiasco. Part of the National Policy Statement for Freshwater has asserted sweeping changes for rural activities. What does that mean to a farmer? I am one and I don’t understand it. Notwithstanding that the intentions are honourable, the asserted methodologies are asinine and vacuous.

Let’s take the sowing dates, if I can discuss that with the Minister. The Minister and I have discussed this at length. Still no answers are forthcoming. If you don’t have your crops sown by a certain date, a farmer would have to go through a Resource Management Act review process. This is under the suggested frameworks that may be adopted. Forcing farmers to plant crops by either 1 October or November in some areas of New Zealand is idiotic or fantastical, to say the least.

This is, unfortunately, the kind of Government and its understanding of rural New Zealand going forward. To force the issue that this is not acknowledging regional activity, regional rainfall, soil, and soil aggregate farming methodologies just shows that this Government is totally out of touch. And I challenge the Minister to make good with some of his previous assertions. Sadly, it’s a one-size-fits-all way of looking at regulations. It totally fails the common-sense sniff test. If you’re a farmer—and I challenge anyone in this building who isn’t farming, to make good with any of these assertions, and I guarantee there’s probably few or no one in the building that is actively farming.

It doesn’t allow for regional acknowledgment of erosion, regional farming activity, soil aggregate, and rainfall, notwithstanding the areas around New Zealand that are zone indicative. Did anyone actually tell the ministry and the Minister that you can’t get heavy machines on farm paddocks in most places in New Zealand in the latter part of winter and/or spring? Doesn’t seem to listen. Under the Minister’s advice, these crops would absolutely fail if these methodologies were enforced.

I challenged the Minister and the ministry to make good with the common-sense claim that, as we farmers know, no crop in the winter scenario would ever germinate in under 11 degrees. Now, I’m not even sure if the Minister is aware of that, but at that time of the year most of Southland is under snow. So I’d like to see how that would work. I think this Government’s completely out of touch with the regional activity at a regional level. Government’s just got bloated and it simply needs to be handed back to council to rectify these problems.

Coupled with the extra costs—who’s going to pay for this? The simple reality is if this generic comes in at a central government level, those costs are going to be deferred to council and those will ultimately be shared by ratepayers. Is the Minister going to make good on asserting what sort of costs and revenue earnings the local councils will have to uptake and the farmers will lose by revenue earnings at the farm gate? Does this Government know? Does the Minister know? I’d like to challenge him on those figures. And if he doesn’t have them, why doesn’t he have them, because rural New Zealand is at complete odds with what this Minister and the ministry is trying to assert.

The ratepayers and the farmers want to know how to operate. The council wants to know how to operate. We’re sick and tired of generic policy-making out of central Wellington that does not understand on-farm regional activity. Thank you.

Thank you, Madam Chair, and I’m happy to answer questions. It’s very hard to answer, or respond to, a statement, but I’ll try. Firstly, I would like to take the opportunity to acknowledge the incredible work, and the previous member there, Mark Cameron, as a farmer, is in a group of people in this country that has done an incredible amount to commit to work their way through COVID, alongside the good people at the Ministry for Primary Industries (MPI), to a point where we saw a marginal drop of 1 percent in the net export revenue from our primary sectors—an incredible achievement through the COVID year. And next year, because of that good work working with Government people, MPI people, and others—Land Information New Zealand as well—across the primary sectors, we have a forecast increase of revenue of 3.6 percent, the envy of many countries around the world. And so I’d just like to put that on record.

In response to the statement around water quality, this Government put some ideas. It made a commitment to improve water quality. We worked together to put out some draft proposals that we accept were wrong, and we have put them to one side. We’re now working through with all the agencies across the primary sectors to ensure that we come up with a pragmatic set of proposals that will give us, on the ground, changes that will improve water quality, which is what we need in some particular areas—not all across the country. The one size fits all was that bottom line that we as a Government and as the nation have to have. We have to have a bottom line, but we hope that the vast majority of farmers and people who own the land actually will be better than that. I’m sure they will. Many are actually far better in terms of their farm management already. But we have to work through a process. We’ve got 12 months to do that, and I’m saying to farmers, let’s work together. Let’s step up and show the wider public that—as we have in export earnings—we can achieve an amazing amount for our country.

Thank you, Madam Chair. So, Minister, you said they were draft proposals. Were they designed as a draft, those regulations that came out last year, then?

No. Some of those were proposals that, as I say, they were, with the best of intent, a way of putting in line a bottom line. The planting dates need to be worked through—issues like tagging. So the slope maps and the maps that were put out there were clearly mistakes, and we are working through to rectify that. I don’t think that we would ever claim perfection. We’ve acknowledged that mistakes were made. But the intent of what we want—and that is better water quality for all New Zealanders—is one we’re still determined to achieve.

OK then. So the 190 kilograms, is that going to be reviewed or not?

No, that won’t be. And in terms of nitrogen applied, I’ve had extensive conversations and discussions with farmers across there, and the vast majority of them say, “Actually, 190 is OK. We can live with that.” And where beyond that is being used anywhere in this country, you are probably wasting money and you are probably not making the best utilisation of your land or your stock or the grass that you grow.

Is the nitrate type acidity rate going to stay as it is?

Those issues have been worked through. In fact, we will still aim to achieve those target figures of the nitrate toxicity. As I say, we don’t have a dissolved inorganic nitrogen figure in there. It is a complex area, but those bottom lines will still be there. In terms of how we get there, those are the things that we are discussing.

So is that a yes, that the 95 percent is retained? [Interruption] The 95 percent nitrate toxicity rate will be retained?

💬 Hon Damien O’Connor: The 95?

Percent toxicity rate.

The target figures that we put out there for nitrate toxicity will remain in place.

Cool. Have you done any analysis of what that’s going to mean for mid-Canterbury and the number of hectares that will go out of dairying?

There has been some analysis done by the Ministry for the Environment (MfE), some by the Ministry for Primary Industries (MPI), but I don’t necessarily accept the figures that have been bandied around. I think the innovative approach that most farmers take in this country means they will adapt, and is already what we are seeing, and the underlying assumption that if you irrigate land it will go into dairy is, in my view, a faulty one. And we are already seeing other high-value land uses across the Canterbury Plains in terms of seed production, making good utilisation of that water.

Yeah, so with that, what are those projected numbers, that are existing dairy, that would go out of dairy under those rates? If you say you’ve got MfE and MPI, can I have both of those numbers in hectares, please?

Look, I can’t recall. I’m happy to get, for the member, the figures in terms of what areas may adjust. If I can go to, I guess, a more recent report in terms of direction of travel for agriculture, and that is to the Climate Commission’s report, in terms of our target for emissions reduction, they were talking about a 15 percent possible reduction in stocking rates, which has alarmed some farmers because they think that someone is going to come in and impose that on them; they will not. What the commission has said is that with existing technology, if we are to reach those targets, we might end up seeing a reduction as farmers opt to do different things. But what they have said is that production, they think, will remain the same.

I think a very good example of what people thought would never be achieved would have been a halving of the number of sheep that, effectively, occurred from 1985 to now, but retaining the same volume of production from those sheep. So the same kind of innovation, I am sure and confident, will occur across the livestock sector from whatever sector it is.

After the Minister’s decision to delay the intensive winter grazing regulations for a year, what are the criteria or standards for intensive winter grazing that farmers must meet to satisfy the Minister that he doesn’t have to impose regulations?

We have under way consultation on farm freshwater management plans. So each farm will be expected to have in place a freshwater management plan that gives an indication of the high-risk areas, the stocking rates, and assurance that nitrate flowing from that farm or that property in that management system will reduce over time. That’s what we hope to achieve from that, and we’re trying to incorporate those freshwater management plans into integrated farm plans, which are not a set template; it’s a concept where farmers will roll into one plan their obligations around health and safety, around biosecurity—M. bovis being a challenge for all of us now that wasn’t there—animal welfare standards that are expected by all those people who buy our projects, freshwater management and soil protection, biodiversity, and, of course, labour management on a farming operation. All of those things are legal requirements. Some of them need to be laid out in terms of definition, and those are ones around freshwater biodiversity yet to be clearly defined. But, if you run a farming operation, ultimately, be it the regional council, be it the processing company that buys your stock, or the customer in the market that wants to consume your products and check the production system used, they’ll all want reassurance that you’ve done it in the right way.

So what modelling has been done on the economic impact of the environmental policies on farm viability and the ability to accelerate the economic potential of agriculture?

As I stated before, there has been some economic modelling done, which I don’t necessarily accept. The economic potential of agriculture is unlimited, in my view. As we move from volume to value, or to values, I think that what we produce from this country by way of pure, safe nutrition that, through innovation, can be turned into recipes for individuals in terms of their nutrient needs—I believe the sky is the limit. Because if we, through the ethical methods of production and assurances through farm plans and certification—I think that people will be actively seeking to buy products from our country, just as we’ve seen with mānuka honey, where, perhaps, the prices in some markets might be seen as ridiculous by New Zealanders but actually they’re seen as reasonable by the very customers who purchase it. That’s the space that we need to move into as a food-producing and fibre-producing nation.

Thank you, Madam Chair. I wanted to touch on some of the issues that have come out of the organics bill. But I also wanted to thank everybody that has been helping and supporting the passage of the bill through the House. Because we know that, hopefully, it will create certainty for people locally and overseas who want to buy organic Kiwi products.

We know that people around the country and the world want their food to be produced in environmentally friendly ways. They want to know that when they put dinner on the table for their kids and families, it has been produced sustainably, helping to create a greener future for current and future generations. A part of that is understanding that clear and trusted national organic standards will help us produce food and other products more sustainably.

I think it’s really important that we do ensure that we have the voices of the growers and the producers and the people who have made this their lives, that understand that when we live holistically with the land it’s not just about the economic benefits but it’s also about how we engage and work holistically with the environment.

But I have two questions, which kind of fall underneath that. We know that when we transition from one regime to the next—and I understand that’s what I see is happening—what support policies will be put in place to ensure that the organic system, the organic sector, will be carried from this regime to the next? And also, has the Minister also thought about advocating for a preferential procurement of locally produced organic products to help grow the organic sector?

Attached to that, I have a related question, and that’s since 1 December 2020, the Ministry for Primary Industries (MPI) have been calling for proposals for projects that would research regenerative farming practices. On the website, it says that projects could be under way by mid-2020. So I’d like some clarity around what’s happening with that, how many proposals have been received, the dates and how many have been funded so far, and what else is the Government doing to understand the value of regenerative farming for Aotearoa New Zealand? Thank you.

Kia ora. Look, I’ll attempt to answer a few of those questions incorporated in there.

Firstly, is Government considering direct support for local purchase of organics? No, we’re not. In fact, we believe that the market and the demand for it is building to the point where, actually, production is the challenge, and that’s indeed where the organics bill comes in. We need to give the consumers, who often pay a little more for organic products, an assurance that, indeed, the product is what it says it is, and it’s been produced in an organic way, with credibility. We’ve had in place in New Zealand, through a couple of agencies like BioGro and Demeter, a couple of certification systems that have been deeming products to be organic if the growers meet the standards. We’ve seen growth in that area to the point where exports of organics is a significant part of that sector. We’ve negotiated with each country an assurance that says that when we sell products off-shore that are claiming to be organics they are. Some of those countries have accepted that standard, but it’s been a country-by-country negotiation.

What a number in the organic sector have said is that, actually, we need a national standard that we can go to any market around the world and say, “This is certified by our Government, by our country, as organic, and you can trust it.”—because Government-to-Government certification is usually the most credible.

So we’ve worked through a piece of legislation, we’ve worked through draft regulations that are currently out for discussion, and the concern seems to be around the cost, which is a legitimate one. We don’t want to add any further cost, but ultimately we do want to, as Government, be able to say to whoever buys organic products from New Zealand that these are truly organic in the production system used. So it comes down to should we contract that out to a non-Government agency to say it’s organic, or should we keep it with the Ministry for Primary Industries (MPI) or New Zealand Food Safety to say it’s organic?

Ultimately, a Government agency backed by us, through legislation, through regulation, is the safest way and the most secure way through to market. We’ve accepted some of the arguments and some of the points raised in select committee, but ultimately I believe, and Government will believe, that certification by MPI or New Zealand Food Safety is the best way to grow the organic sector.

When will farmers in the Southland region know what criteria they have to meet so that you are satisfied and your colleague is satisfied that the modular process will have done an effective job at creating the environmental outcomes that you desire to avoid the implementation of the freshwater rules next year? Secondly, what is the anticipated cost on local councils—regional councils particularly—of implementing those very programmes?

I don’t have a set date for that, other than to say that if we can, through winter grazing practice this season, show that there’s real improvement for not only water quality but for animal welfare standards—and that’s the law around that. We have, two years ago, of course, raised this issue, been through an independent process, and given some clear guidelines about animal welfare standards for winter grazing. If we do the right thing there, I’m sure water standards will improve.

In terms of the cost, and if we were to go to a consenting process—that is, if you were seeking, as proposed, to plant in places that were steeper than we’d talked about or that may have ended up being in a high-risk situation close to a river, then the cost of that consenting process is something we can’t estimate, but it might be significant depending on the regional council. I’m trying to avoid that process, if we, as a farming sector, can prove that what we put in a farm plan will be adhered to and does make progress with freshwater quality and with animal welfare standards.

So what’s the definition of real progress?

I think it will actually be a somewhat subjective assessment this year. That is, I think if we see images of water pollution and if we see images of ill-cared-for animals, then the public will expect that we do more to bring those farmers into line, and other farmers will expect us to have regulations to bring them into line.

So if your test is images—and it’s fairly easy for anyone to take a photo in Southland in the winter of any stock in a winter grazing environment and picture it in a way that may be seen as negative—so if visual images are going to be your test, what is the standard that you will consider to have breached what the public rules will be around that?

We are working with the regional council, Environment Southland, down there, in terms of Southland. All other regional councils will be partly responsible as well, as will the Ministry for Primary Industries (MPI) through inspectors for animal welfare. We’ve been clear, we’ve been upfront and, actually, most people are reasonable and they understand what is unreasonable. So, you know, the councils with MPI will be working through that process in a fair way, but it will be a reasonable way and will conclude, I guess, at the end of winter as to whether we indeed have made progress, which I hope we have.

Environment and Ocean and Fisheries