Jim Sutton Speech To Dairy Insight Seminar

Ladies and Gentlemen: thank you for the invitation to speak tonight. The aim of this strategic framework is something I find easy to support: that of being the world's best.

New Zealand is a trading nation. We are dependent on access to other countries' markets for our well-being. More than 80 per cent of all the dairy products, beef, and other primary products grown in New Zealand is exported to overseas markets. Whatever barriers to this trade that we can reduce can have huge impacts on the livelihoods of everyone in New Zealand.

I can assure you that this Government is doing everything possible to ensure our producers continue to have that necessary access and that it is improved.

Contingent in that happening is a commitment by New Zealand producers to continue to produce safe, high quality products ? in a mix continuously responding to the evolving tastes of the world's most discerning customers.

The last big round of international trade talks, the Uruguay Round, was the first to include big changes in agricultural trade.

Research carried out by MAF on the quantitative benefits of the Uruguay Round, showed in the single year of 2000 (the year that many of the gains of the Uruguay Round kicked in) the beef, sheepmeat, and dairy sectors gained about $590 million from product price and volume increases in the major markets of the United States and European Union.

That works out to an average increase in earnings for each dairy farmer of $11,500 a year. And that was from changes in our trade with just two of the 146 members of the WTO.

Combined MAF and MFAT research has assessed the overall benefits from the Uruguay Round as at least $9 billion over the 10-year implementation period of Uruguay Round changes, and about 17,600 additional jobs throughout our economy, including 2000 in agriculture in particular.

But the Uruguay Round was only a toe in the door, for agriculture, which is still one of the most heavily protected sectors in the world.

The Doha Development Round has even greater potential. Next week, there is a significant meeting in Geneva, of ministers and officials, where I hope we can forge agreement on the way forward, towards successful completion of the round. I promise you that Team NZ ? one of the very best in the business -will be doing its best there for New Zealand and for you.

Ladies and Gentlemen: since subsidies and other taxpayer-funded supports were removed in the mid-1980s, New Zealand agriculture has responded dynamically to market signals. It has gained significantly more productivity that the rest of the New Zealand economy. Farmers and other agricultural producers have seized opportunities, adapted new technology, and been highly innovative.

For our country, and our economy, to achieve the way we want it to, this level of innovation must happen across the board. The Government has highlighted three "horizontal enablers" ? information technology, arts and creative design, and biotechnology ? as areas that, if they attain their growth potential, can add value across the broad scope of the New Zealand economy.

A report from MAF to the Growth and Innovation Advisory Board last year assessed the importance of primary industries to New Zealand's economic wellbeing and highlighted that while primary production has been extremely innovative, there is plenty more potential remaining.

Organizations such as Dairy InSight play an important role in developing that potential.

The sweeping improvements to health, education, and family incomes announced in the latest budget - Budget 2004 - could not have been afforded without economic success ? in significant part, that of rural New Zealand. Our primary producers ? people like you, together with those who supply you with inputs and prepare your outputs for sale ? provide about 60 per cent of all our country's export earnings.

This Budget included measures directly targeted at primary production such as the continued increase in biosecurity funding, up another $46 million over the next four years. That makes a funding increase in biosecurity baseline funding of 57 per cent since the Labour-led Government was elected in November 1999.

Funding also increased for trade negotiations with China and Thailand and for scientific research and development.

More broadly, this Budget was one of growth and opportunity, balancing economic and social investments. This budget will take New Zealand ahead ? it is good for families, and good for the economy.

The budget provides for close to half a billion dollars over the next four years for directly strengthening economic performance. The investments include developing our export markets, increasing our R & D spend, and attracting quality offshore investment.

We are increasingly looking for skills and the people with them to continue the innovation in our industries, especially in our primary industries.

This Government is trying to promote excellence and to develop an environment where people are encouraged to develop their skills and highlight winners.

And we are looking for active partnerships with the private sector. Too often, our land-based industries have given the impression that they are obsessively concerned with penny-pinching cost-cutting, while neglecting the bolder opportunities for adding value.

That such a forward-looking strategy can pay off is amply demonstrated by the performance of our most profitable dairy co-operative Tatuanui. Their suppliers are much envied by some of their fellow farmers ? but the origin of their success is clear: a long-standing commitment to product and market development; a willingness to save now to build a better future ? not just on-farm, which is a New Zealand tradition ? but well along the value chain, beyond the farm gate.

Ladies and Gentlemen: it's encouraging to see such significant industries as the dairy industry actively working to maintain and enhance the excellence that is increasingly necessary in today's world. New Zealand is a small country, but we have a big impact on the world stage at the moment ? from excellence in dairying to our creativity as shown in Lord of the Rings and Whalerider.

The momentum of that will not be maintained if we are complacent about it. It requires work to maintain, and that excellence and innovation need to be strived for.

I congratulate Dairy InSight on this Strategic Framework vision, and I wish you all the best in the future.

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