Farming is the sunrise

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WEBSITE WWW.FEDFARM.ORG.NZ
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30 June 2011

Farming is the sunrise

Penultimate speech by Don Nicolson as Federated Farmers President on day two of Federated Farmers 2011 Annual General Meeting at the Distinction Rotorua.

Before we commence a packed and exciting plenary session, I wish to use this opportunity to thank the farmers of New Zealand.

If anyone deserves tribute it is the hard working folk who aspire to better things. A better farm, better productivity, better returns and a better life.

Every one here knows I am passionate about property rights.

I’d hasten to add that a few journalists are looking forward to speaking to my successor without the discussion turning to regaining authority over property.

To some it’s the essence of liberty but to others, it’s as alien as communism is today.

Take the subsidies Federated Farmers worked hand in glove with a Labour Government to remove in the mid-1980’s. Subsidies perverted farming in a downwards spiral.

It was also that Labour Government which, in 1988, saw David Lange infamously say,

"Farming is a sunset industry and manufacturing and tourism will take its place."

If Mark Twain was writing today, he’d probably observe with the entire agricultural sector accounting for 71 percent of all exports, that,

"The rumours of agriculture's demise have been greatly exaggerated."

I’ll put it to you another way, the export economy, from Fisher & Paykel Healthcare to a farmer on the Chatham Islands, is worth more to New Zealand than the net benefits of hosting a Rugby World Cup every single week of the year.

Assuming of course, the Rugby World Cup delivers on the promise.

The Ministry of Agriculture and Forestry’s latest situation and outlook for New Zealand agriculture is much more bullish. Between 2010 and 2016, just the growth in export value from the agricultural sector, will outstrip all the revenue currently generated by international tourism.

This is genuinely good news. It turns that 1988 misstep on its head. Agriculture has never been a sunset industry and how could it? Humanity continues to expand and we produce what every human needs to survive, food.

In the past three years we have strived to tell that story to the policymakers, which still held onto the notion that ‘something’ may emerge to replace what they saw as the old economy.

We’ve seen the knowledge wave, we’ve seen venture capital, we’ve seen money thrown at a whole gaggle of things from the plausible to the ridiculous. Anything but agriculture in a kind of inverse snobbery.

How could an OECD nation be an agricultural exporter?

It is the twin curse of the late David Lange’s belief agriculture would be replaced by manufacturing and tourism, with Harvard’s Professor Michael Porter, who convinced a generation of policymakers that agriculture was low value and structurally unattractive.

That is the recent past that has affected us for some 23 years until the past four years when Michael Cullen came to appreciate very late, the value of agriculture.

This current Government is backing agriculture with trade policies like the China Free Trade Agreement, which now has that country as our number two trading partner.

We see this in the immense potential of India. Where our expertise can vastly improve that country’s agriculture giving us unparalleled market access. As two Commonwealth countries, we share a common history, language and legal system.

The only threat is a lack of ambition.

I’ve asked where are our indigenous versions of Monsanto, Bayer, De Laval and Rabobank outside the farm gate?

Surely we can leverage off our world-beating skill inside the farm gate to support global agriculture. In the fertiliser cooperative’s Ballance and Ravensdown we have glimpse of that potential.

There is another threat and that is of non-tariff barriers being erected using an environmental pretence. Just as the European Union is adding to the cost of long haul flights in the name of the environment, food miles, water footprints and carbon footprinting are cut from the same cloth. Potential barriers to trade.

The issue for New Zealand is whether this trend, prevalent in Europe, is worth the effort and the cost when we have an increasingly affluent Asia on our doorstep?

Take the National Identification and Tracing scheme or NAIT for short. Who would have thought a contaminated bean sprout would unpick its very logic?

Our food assurance standards are world class yet the contaminated vegetables in Europe take the need for traceability down to an almost impossible level. Down to the level of an organic bean sprout.

We need to step back, take a deep breath and ensure systems with checks and balances are in place to prevent a similar event happening here. And we do.

What happened in Europe had disastrous consequences for Spain with its vegetables wrongly implicated. It had little to do with traceability but everything to do with food standards and systems for food safety.

Given Federated Farmers called for the existing tracing schemes to be unified and given we were highly dubious about the technology platform, its delay comes as no surprise. Yet the Federation acted on principle using reason and logic throughout.

While we were criticised at the time, we have been proved right, as we have been proved right over the past 113 years. Delegates and farmers, Federated Farmers gets far more things right than we ever get wrong.

It is easy to be pressured to change a position but much braver to believe in the strength of conviction. Let’s put the NAIT dogma to one side and get to a sensible resolution for al farmers.

The same applies to the ridiculous notion of surcharging exporters to meet the cost of an importer’s catastrophe. General Industry Agreements are akin to the Police handing a bill to a victim of crime for half the cost of an investigation.

At Feildays, one of our senior staff was told that MAF Biosecurity NZ, views itself, not as a protection agency like customs, fisheries or the police, but as a risk management agency.

This goes to mission and that outlook is deeply concerning because its foundation rests on probability and odds, not on detection or eradication.

Federated Farmers has three solutions to improve biosecurity delivery and funding.

First is an independent Biosecurity Conducts Authority to investigate post-border biosecurity incursions and complaints

This authority would examine systems, processes and people looking to close gaps. We do this with the Police and air traffic accidents, why not something as important as biosecurity as any failure could be financially crippling.

In late April, Federated Farmers suggested an alternative to GIA’s. That being a dedicated low level charge on sea and air containers landed in New Zealand, along with dry cargo, imported vehicles and passengers.

I was pleased to see KPMG expand upon this concept in May for if placed into an EQC type fund, it will provide the immediate means to deal with future biosecurity incursions.

Although it would add marginally to our costs given a lot is imported for use by agriculture, it demonstrates how costs would be more fairly spread than making the victims pay for someone else’s error.

The final area is an impending Ministry that ought to be for Primary Industries.

Last year we anticipated this development but we stress again the need for the word “for” to be in its title as that goes to mission. I have been told MAF’s current role is not to lobby for agriculture.

If that’s true, we need to push for an amendment ahead of our new super Ministry you cannot tell me, the Ministry for Culture, Heritage and Sport, doesn’t lobby with NZ Music Month, or the Rugby World Cup or Team NZ’s sponsorship for the America’s Cup.

You can’t tell me that the Ministry for the Environment is an impassive bystander on environmental issues either.

These things said, I wish to acknowledge and publicly thank our Minister, the Hon David Carter.

At times I will admit there has been tension. As a lobby group we want things ‘our way’ while the Minister has to negotiate a byzantine Yes Minister world.

I’ve known the Minister for a number of years and he is an honourable man and a fine farmer.

I can honestly say that we agree many more times with the Minister than we disagree

We share the same view that agriculture is the sunrise and I value what he says and does for us all. He has pushed water storage up the political agenda and is leading the re-merger of MAF with the Ministry of Fisheries.

With 71 percent of New Zealand’s merchandise trade behind it, this Ministry for Primary Industries is the policy partner we seek. One that will have the swagger in Government to get what we need to build a future for New Zealand and all New Zealanders.

Can I also thank Tim Groser who is doing frankly an outstanding job on the trade front as well as Kate Wilkinson, who is realigning the Department of Conservation while looking hard at things that block sensible outcomes.

And of course, there is the dynamic duo of the Prime Minister and the Minister of Finance.

These two see agriculture as the sunrise. As the key to prosperity while unlocking the door to related industries and exports. Given pastoral imagery is used to sell New Zealand as a tourist destination, farming I can say, is a tourism ace too.

There are still outstanding issues and of course, the notion that the world’s gaze is on New Zealand single handily saving the planet by slashing a fraction off the 0.2 percent of the global emissions attributed to us.

At this point I can almost see Phil Goff re-tweeting his gibe that we’re the "Nats in blue gumboots". At the time he said that, John Hartnell was meeting with Christchurch City Council for a combined Farmy Army and Student Volunteer Army effort in that battered city.

Mr Goff, it was an ill-timed, insensitive and frankly rude. Federated Farmers has not only invested huge amounts of resources in Christchurch and Canterbury, but meat and fibre farmers, meat processors and meat company workers have donated $325,000 to Christchurch in recent weeks.

Federated Farmers has been far more effective on agricultural issues than the opposition because we are apolitical. Or as our CEO Conor Englsh rightly puts it, “we don’t care who is in power so long as they agree with us!”

I know Phil Goff and I like him but sir, you are a much better person than those comments.

Labour will one day form government so we must keep the lines of communication open as we did speaking at its 2009 conference in this city. As well as being the only major business organisation to participate in its shadow banking enquiry.

Today’s Opposition is tomorrow’s Government and we must play with a straight bat.

While I don’t wish to sound like an Oscar’s Speech, I do wish to thank the Hon Rodney Hide for starting a revolution.

He is frankly the best Minister of Local Government I have ever dealt with. It is my hope his legacy will be an all encompassing review of local government funding and the Regulatory Standards Bill.

Talking of revolution, I wish to fly a kite with you on the topic of land stewardship.

Our native biodiversity is priceless and peerless. Through voluntary covenants or by force with Significant Natural Areas, farmers are protecting vast tracks of land in the public good.

It is time for the public to recognise this by rewarding stewardship. That’s by valuing protected land more than productive land and then paying that to the landowner to assist with the costs of stewardship.

It would be financed by council’s if a Significant Natural Area, or by Government, if voluntarily protected under a QEII type trust covenant.

This reflects the real costs involved with fencing and active pest control. It would enhance biodiversity without the need for a National Policy Statement.

Stewardship rewards and supports landowners reflecting a partnership between the land’s steward and the public who want our precious biodiversity protected.

Remember my mantra about maintaining authority over property?

Stewardship meets that test by rewarding the landowner forgoing their property rights while helping to meet the substantial and enduring costs of controlling pests and fencing. If we want more private land protected this is one means without the state taking an unearned and undeserved increment.

Delegates, I believe "farming is a sunrise industry and farming related manufacturing and tourism will take New Zealand forward".

Tomorrow you will elect our Federation’s 28th National President.

For me, old presidents never die; they just fade from frontline farmer politics.

As I prepare to fade from this particular stage, perhaps to something new, I am full of appreciation and admiration for this great and august body, Federated Farmers of New Zealand.

ENDS

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