Hon Jim Anderton

Minister of Agriculture, Minister for Biosecurity
Minister of Fisheries, Minister of Forestry
Associate Minister of Health
Associate Minister for Tertiary Education

Progressive Leader

17 August 2007 Speech

Organics Aotearoa New Zealand inaugural conference
Lincoln University, Christchurch

•Roger Field, Vice-Chancellor Lincoln University
•Doug Voss, Chair of Organics Aotearoa NZ
•Michael McEvedy, Mayor of Selwyn District
•Ken Shirley, former MP and outgoing Executive Director of OANZ
•Professor Ton Baars and Roger Hitchings, international guests and keynote speakers
•Morgan Williams, former Commissioner for the Environment

I’m very pleased to be able to join Organics Aotearoa New Zealand at this, your inaugural National Conference.

The conference is a significant achievement, particularly for an organization that only came into being 14 months ago. It is bringing together all the different parts of the organic sector and incorporating the annual gatherings of three of your constituent members, Bio-Gro NZ, the Biodynamic Association and Soil & Health. Congratulations on meeting the challenges to get this far. I see the conference as marking a ‘coming of age’ of organic production in New Zealand.

Earlier this month I read the opening paragraph in a rural newspaper, referring to this conference which said “The organic sector has decided it is time to investigate whether its future lies in a cottage or corporate industry.”
It is a good example of journalistic licence - clearly, as an industry you could see quite some time ago that organic production is a serious commercial option.

All over the world right now - and particularly in high value markets - consumers and regulators are growing more aware of environmental issues.
It is probably fair to say that for many of the pioneers of organics in this country it was an interest in environmental issues that got them started.
Now, both in New Zealand and internationally, organic production is going from strength to strength. Organic produce is estimated to comprise about 4% of the world’s food and beverage market - that’s worth about $40 billion US.

And sales of organic products are increasing globally by between 10% and 20% each year. This presents a very real opportunity for New Zealand’s organic producers, both to provide for an increasing demand domestically, as well as for export.

Clearly many of you here have not been slow to realize this - between 1999 and 2005 the amount of New Zealand land that was under conversion or was already certified as organic increased by more than 400%.

Let’s not forget that New Zealand’s economy is built on the productivity of the primary sector.

Agriculture, horticulture and forestry together represent eighteen percent of New Zealand's gross domestic product. Our agriculture is the backbone of our economy. More than two thirds of all foreign exchange earnings come from primary industries. No other developed economy is as dependent on exports of primary products as is New Zealand.

A lot of people don’t realise this, but our primary industries are actually becoming more, not less, important to us.

But we are a long way from anywhere, we are not the world’s cheapest producers, and we are facing much more competition from emerging nations, such as China and Brazil.

The continuing strength of the primary sector - if we are to remain the world's leading primary producer - will depend on us developing niche products that command a premium.

And we can attract a premium for our quality - for the desirability of produce from the world's freshest and cleanest growing environment and producers with responsible production practices.

The reason that a good reputation for environmentally sound production can help to generate premium prices is that world wide people are much more aware of the need to nurture the planet. There is a growing market for ‘ethically produced’ products.

We need to be responsive to the way consumer demand is changing. If we don't respond to the market - it will respond to us. One of the most important changes occurring in our markets is the rising concern- especially in the UK and Europe - about the way New Zealand food producers manage our environment.

Supermarkets are already saying, 'Unless you're sustainably catching a fish or sustainably developing a dairy industry we're not interested in buying your product.' This should focus our minds.

We should welcome the challenge, because we have as good a story to tell about our production as any country.

And one of the emerging trends is that consumers world wide will pay a premium for produce that is certified as organic.

Some figures - organic kiwifruit averaged a premium of 50% between 1996 and 1999; organic sweetcorn 57%; organic apples reap 100% premium and organic lamb does as well.

Organic production is not without its challenges, of course, but the Government recognizes that the organic producers are an important sector - key players in New Zealand’s future.

That is why the Government has been investing in the sector.

As you acknowledge, the organic community is characterised by a diversity of views, many held with a strong passion. Forming a national body to pull together your collective strengths, to provide leadership and to develop strategy across the sector was undoubtedly the way forward. And the Government could see that.

The Ministry of Economic Development Sector Initiative Fund provided seed funding of $1.5 million over three years to assist Organics Aotearoa New Zealand to get up and running.

As well, since the year 2000, $2.5 million has been made available from the Sustainable Farming Fund for projects relevant to the organic sector.

These have included funding for New Zealand Pipfruit to work on meeting the requirements to manage codling moth risk with respect to exporting organic apples to Taiwan. The Certified Organic Kiwifruit Growers Association was also funded by the Sustainable Farming Fund to look at ways to increase the production and profitability of its produce.

And another example has seen the Sustainable Dairy Action Group funded to develop more sustainable dairy production systems. This project is looking at the environmental impact of various systems of management and is exploring different strategies to minimize any negative impacts. In relation to organic production, this includes looking at how dairy farmers can achieve the best levels of production. There is no doubt that there is an increasing demand for organic milk and milk products world wide.

Another example of the Government’s active engagement with the organics industry is the $2.2 million that will be provided over the next three years for the Organic Sector Advisory Programme.

Given the striking growth in markets for organic produce, one of the goals you have as an organization is to boost the value of the organic sector to $1 billion by 2013.

This would require a 5-fold increase over 6 years, so it’s nothing if not ambitious. But good on you for setting your sights high.

The Government has seen the value of playing its part, so the Organic Sector Advisory Programme was supported in the 2006 Budget, as part of the co-operation agreement the government has with the Green Party.

$500,000 was allocated to cover 2006/07 and $750,000 will be allocated in each of 2007/08 and 2008/09.

I want to congratulate Organics Aotearoa New Zealand on your achievements to date:

I understand that the Organic Advisory Programme has now been rolled out across the country, while the Task Teams are working on market access, education, extension and research and communication/advocacy.

A strategy for research and development is in place, working with research funders and providers, as well as farmers and growers, to ensure that the needs of the science community and grassroots producers are being met.

Uptake of "Smart Start" consultations has been greater than you anticipated. Consultations have included sheep and beef, pip and stone fruit, nuts and garlic.

And 15 successful groups are receiving funding under the Industry and Community Defined Packages Programme.

On top of which, the Organics Advisory Programme website is now live and functioning as the primary source of practical information about organic production systems within the OANZ umbrella site.

And when I went to the Mystery Creek National Fieldays in Hamilton this year, I saw that Organics Aotearoa NZ won the Best Site Award.

So, all the hard work that it takes to get a new national organization up and running is paying off.

But, like everyone in the primary industries, your industry is not without challenges.

No-one is immune from the effects of climate change. The true measure of our character is how we meet our challenges and build on our advantages.

Climate change is not a trivial issue. No developed country is more exposed to the issue than we are. We are further from markets than any other producer, and so we are more vulnerable to the food miles issue. And because we are more dependent on primary production than any other country, we are more vulnerable to changing weather patterns.

If we want to defend our markets we have to be able to make a very convincing case that New Zealand's production is the most sustainable in the world. That's why the government has announced a goal of making New Zealand the first truly sustainable country in the world.

There is a great opportunity for New Zealand if the focus switches from the current fixation on the spurious argument about ‘food miles’, to how well we care for our natural surroundings, because we have some of the best practices in the world.

Just a couple of days ago I launched the new Forest Environmental Code of Practice drawn up by the Forest Owners Association. It will help to ensure that our forestry takes its place among our primary industries as a leader in environmental practice.

This is a commercial issue for us because we can achieve a premium in global markets for products that are produced more responsibly.

As Fisheries Minister I’ve been following with interest the successes of organically certified aquaculture producers, such as Ormond Salmon, who are at the every top end of the market.

And the Government has allocated $4.6 million for the four years 2007/08 to 2010/11 towards independent eco-labelling of key New Zealand fisheries - this, and organic certification, fit into the Govt's sustainability and economic transformation agenda.

The Government is actively supporting greater research investment as part of the Sustainable Land Management programme and the work on climate change.

And when we look around at the tools we have to mitigate the effects of climate change, there is no doubt that organic production has a role to play.

Internationally, research into ways to reduce the environmental footprint of all land-based industries has taken on a new urgency. Organic production is certainly one pathway but it is not the only one.

Within all sectors of New Zealand agriculture and horticulture there is a general thrust to reduce the use of agrichemicals. Organic production provides a valuable test bed for learning about many issues involved with minimal and/or nil use of agrichemicals that could benefit conventional systems.

It is not realistic that all NZ's agriculture will convert to certified organics, even in the medium term and probably not ever. But organics has much to teach conventional agriculture. Rather than just pushing conversion and certification at the margins of the industry I suggest that the organics sector use its new unity to step up and engage with the wider agricultural community in improving their practices, not in a preaching way but by being there to assist. Then over time more and more farmers and producers will be edging their practices closer to organics and in effect will be in various stages of transition. Each incremental step by the conventional sector makes the next step easier.

My long-time economic advisor Petrus Simons recently completed a PhD in agricultural economics, entitled 'Tilling the Good Earth - The Impact of Technism and Economism on Agriculture’. Pretrus makes a rather pessimistic assessment of modern industrial agriculture. He writes "Whether or not agriculture produces good quality food, features healthy farm animals and a flourishing bio-diversity is not considered essential, provided there are markets that take the produce ... It can be argued that the current large scale production systems represent false economies inasmuch as they do not pay sufficient regard to the health of soils, animals and plants.

You will be pleased to know that he concludes, "On the whole we may be confident that biological farming will win out, simply because it applies biological methods to a practice that is biological in nature. As the present, often tentative, attempts to introduce biological farming improve, further steps become possible, so that eventually a truly sustainable agricultural practice emerges that preserves the capital of soils, water, microbes, plants and animals in all their diversity and natural ways of behaviour, with a wise use of organisms to control and prevent pests, in pleasant landscapes and with a good and regular harvest of healthy food."

I see from your conference programme that you will be spending the next couple of days discussing and debating a broad range of issues. The organics industry has come a long way from the days of disparate, small production enthusiasts to what is increasingly a vibrant, national and cohesive production sector.

I should like to see Organics Aotearoa New Zealand represented at the Primary Industries 2020 Summit which I will be hosting in Christchurch on the 28th and 29th November 2007. I hope you will take up the invitation.

I talked earlier about how the rapidly changing global environment is compelling New Zealand's primary sector businesses to develop innovative ways of meeting consumer demand, and to explore new business models that will maximise their economic, social and environmental performance.

The Primary Industries 2020 Summit is the first event for over two decades that will provide business leaders from all sections of New Zealand's primary industries with an opportunity to:
•examine the key trends that are driving changes in consumer demand
•assess the impact these changes could have on our existing markets and sectors
•develop ideas on how their businesses and sectors can build and maintain competitive advantage

As an industry organization with an important leadership role, it would be good to have you there to bring the organic perspective to the debate.

There is already a website: www.primaryindustries.org.nz, and you can enrol online.

In the meantime, I congratulate you on what is an impressive achievement to date, and I look forward to seeing this sector grow from strength to strength, becoming an increasingly important part of New Zealand’s economy.
Good wishes for the remainder of your conference and for success in the years ahead.

ends

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