Jim Sutton speech to Maori farming and forestry conference

Speech Notes

9am, 3 September 2002

Maori farming-forestry meeting, Rotorua

Tena koutou katoa.

Ladies and Gentlemen:I would like to add my voice to those who have welcomed you to this place.

You all participate in New Zealand’s biggest industry - the primary production sector. This sector earns New Zealand more than half its export earnings. Half those export earnings come from just three products: dairy, meat, and trees.

The Government I am proud to be a part of firmly recognises the importance of your sector.

In the Speech from the Throne, Prime Minister Helen Clark set out the Government’s agenda for this parliamentary term. It is an agenda that will involve your sector significantly, both as primary producers and as Maori.

The Labour-led government believes that the appropriate mix of policies can, over time, return New Zealand to the top half of the developed world.

We see New Zealand as a land where diversity is valued and reflected in our national identity; a great place to live, learn, work and do business; a birthplace of world-changing people and ideas; and a place where people invest in the future.

In February, the Growth and Innovation Framework was published, to set out a framework within which higher sustainable growth can occur.

Achieving that higher growth will require careful attention and energetic promotion of the key elements of economic transformation: human capital development, investment, innovation, export promotion and business and regional development. Investment needs to be attracted, in particular, into areas of innovation. The government has decided to concentrate on three areas: arts and culture, information and communications technology; and the one of most interest to you as primary producers: biotechnology.

The full potential of our economy will only be realised if we build on our sources of natural advantage and deepen the competencies that are associated with them. That means working with the primary production sector in agriculture, horticulture, and forestry.

Biotechnology, one of the three identified areas of strategic priority, is an area of both natural and acquired comparative advantage for New Zealand.

By no means all of biotechnology research involves genetic research, and by no means all of the latter involves genetic engineering or modification.

Ladies and Gentlemen: we in New Zealand have the capacity to develop exciting new products and new markets.

Many still perceive the primary production sector to be competing in price-driven food and fibre commodity markets.

In fact, agriculture and forestry industries encompass agritech, animal remedies , software, machinery, biochemicals and nutraceuticals. A major part of New Zealand's high value manufacturing and processing is directly dependent on agribusiness, including processing, packaging, agritech equipment, machinery and software.

The agribusiness and forestry sectors in New Zealand have the scale, global marketing capabilities, technical skills and natural resource advantages that not only make them core to our domestic economy, but also provide New Zealand with the platform for future growth and for diversification into new and non-traditional markets. The enthusiasm with which New Zealanders' are prepared to embrace new crops and techniques of growing older ones is indicative of an innovative farming and forestry sector.

Recent successes in areas such as olive oil production, avocado, kiwifruit gold, wine, and organic meat and vegetable production are indicative of what can be achieved. The Government is facilitating the growth of emerging industries, an example of this being the current trial into the cultivation of industrial hemp.

As over 80 percent of New Zealand's agricultural and forestry production is destined for export, factors which affect demand such as the global economic activity, international dairy prices, and access to international markets are of vital importance.

The international trading environment for agricultural products is seriously distorted by farm assistance and subsidies that developed countries give to their farmers. Unfortunately the political constituency for farm subsidies remains strong with the latest US Farm Bill being evidence of this.

The problem with farm subsidies is that they encourage surplus production, some of which comes on to world markets as subsidised exports and depresses prices received by agricultural exporters. The impact of subsidies on NZ agriculture and forestry is the reason why NZ puts such an effort into pursuing trade liberalisation through international forums such as the World Trade Organisation.

New Zealand dairy and meat producers have experienced two seasons of prosperity, firm land prices and exceptional net returns from international markets. This has resulted from strong market demand and favourable weather coinciding with and extended period of the New Zealand dollar being relatively weak. However, we have not just been lucky. The buoyant state of the sector also reflects increased responsiveness to markets and customers, strong gains in agricultural productivity and in downstream processing and marketing.

Forestry export earnings for the year ended March 2002 are estimated to have fallen by just over 1 percent, reflecting lower prices for all major products except paper. The forestry industry needs large scale processing investment, new product and processing innovation and new marketing initiatives if it is to maximise export earnings and wealth creation form rising wood volumes.

From mid-May, the New Zealand dollar began to strengthen as the United States dollar weakened. The combination of lower international commodity prices and a strengthening New Zealand dollar is causing New Zealand producer prices in the land-based sectors to fall in the short-term.

I think that farmers recognise that some to the recent favourable conditions will not continue, and many have concentrated on paying off debt and investing in productivity improvement. Others have taken on more debt to fund farm expansion, new acquisition and other investments. Farmers with recent investments in dairy conversions may find the going fairly tough as dairy returns fall.

As you well know, Maori working in agriculture, horticulture, and forestry have extra issues to deal with, particularly around multiple ownership of land and governance issues.

MAF has been putting significant effort into operational research and policy analysis to build a better understanding of Maori interests in agriculture and horticulture, with the objective of enhancing Maori economic development.

These operational research projects have included research on Maori farming in areas of the North Island and assessment of Maori opportunities in horticulture. Important issues have included the effects of governance and ownership structure of Maori land on its economic utilisation, and Maori access to and use of technical and other advisory expertise.

Building on this research, MAF developed some specific initiatives. One was this conference in collaboration with Te Puni Kokiri. Another is the farm improvement co-ordinator programme.

This programme co-ordinates a range of activities aimed at improving Maori farming performance in the Gisborne and Wairoa district.

Albert Horsfall was appointed as the co-ordinator of the programme in February 2001. A local Management Committee for the programme was established at the outset and is made up of key agencies and people, including Te Puni Kokiri, Maori Land Court, Maori Trustees Office, District Councils and the Federation of Maori Authorities.

A number of focus farms have been selected and regular discussion group meetings of farmers have been held on these farms. These have concentrated on improving pasture production and management in order to improve livestock performance.

>From the reports I have received and my own visit to one property using the programme, I know that significant progress has been achieved.

I am so impressed with the programme that I want to extend its work. I have asked MAF to prepare a paper looking at continuing the existing programme in the Gisborne-Wairoa area and extending it to other districts, such as Northland and the King Country.

Projects funded through the Sustainable Farming Fund also have relevance for Maori in primary production.

This fund supports community-driven project aimed at improving the financial, environmental, and social performance of land-based sectors. Rural sector sustainability is reliant on three interdependent outcomes: financially viable land-based businesses, sustainable rural environments and thriving rural communities.

The Fund seeks to: - Provide continuing opportunities for the adoption of new and improved practices; - Overcome production problems; - Overcome resource management problems and improve environmental performance; - Take advantage of market opportunities; and - Support projects which can be readily used and applied throughout New Zealand.

So far, the fund has supported 115 projects throughout New Zealand, and subject to the completion of individual project negotiations another 65 projects will proceed.

The first Sustainable Farming Fund project to be completed was the production of a Maori land use kit for the Opotiki district. This kit has been so warmly welcomed, that the team responsible for it have now applied for and received another Sustainable Farming Fund grant to develop a kit that can be used nationally.

Ladies and Gentlemen: Maori working in agriculture, horticulture, and forestry work in the most important industry within New Zealand. If Maori farmers and foresters are not tapping the full economic potential of their land, not only do they suffer directly by this, but New Zealand as a whole is poorer.

MAF operational research highlights that many Maori farmers and foresters are struggling to earn a good return from their businesses, hence the reason for this hui. We are here to provide a forum for representatives of some of the most successful Maori businesses to pass on practical advice to assist all Maori farming and foresters lift the performance and profit levels.

Na reira,
tena koutou,
tena koutou,
tena koutou katoa.

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