Address to the Meat Industry Association Conference

Thank you Bill Falconer for the introduction. Thanks also to Tim Ritchie for inviting me here today to speak at your conference.

The Minister sends his sincere apologies for being unable to attend and close this session. But such is the nature of politics.

Since taking up the role of Agriculture Minister in November 2008, the red meat sector has never been far from the spotlight.

There is now a concerted effort by Government and industry to turn this sector around - it has been dubbed the "Red Meat Recovery".

In my view, this "recovery" is not about a return to the past but about ensuring a balanced and diverse export sector. This means we must embrace the future and maximise our opportunities.

Over the past 20 years, sheep numbers have fallen 47 percent - from 60 million sheep in 1989 to 32 million sheep in 2009.

Meanwhile dairy production has risen 77 percent - from three million dairy cattle in 1989 to six million dairy cattle in 2009.

Over recent years, the need for industry rationalisation has dominated much of the debate.

To some people, structural change has appealed as a solution for industry to increase performance.

But structural change in itself is unlikely to bring about the high-performing globally-competitive meat industry that I see as the future of the sector.

Looking to the future means meeting consumer needs and their high expectations around food safety, animal welfare, and the environment.

The Government is a significant player in this recovery. However, what has always been clear is that for change to be successful, it must be driven from within the industry and owned by the industry.

Your industry must be the big part of the solution.

As you know, in June last year I launched the sector study ‘Meat: The Future'.

I was pleased to see the study reveal a degree of optimism about the future of the meat industry and that two-thirds of those surveyed agreed that the meat sector would be a good investment in 15 years' time.

The study shows a sector that recognises that change is both necessary and desirable.

This recognition of the need for change has been followed by some action. I want to again congratulate MIA and Beef + Lamb New Zealand for joining forces to drive its meat sector strategy.

This partnership between the two industry organisations representing farmers and processors is an obvious link to the sector's future profitability.

The Government has committed to supporting this initiative because we must all work together to bring back much-needed profitability to this industry

But most critically the strategy must be developed by the sector, for the sector.

Further industry action was confirmed last month with the announcement that Silver Fern Farms, PGGW and Landcorp had delivered a business case that ticked the boxes, measured up to the scrutiny and was worthy of the Government's Primary Growth Partnership innovation funding.

The partnership funding totals $151 million with $59.5 million coming from Government.

This is a plan by key industry players to turn around the sector by creating a consumer demand-driven integrated value chain for red meat.

This will have incredible flow-on effects for all of New Zealand, as the group will continue to seek wider industry collaboration in order to maximise benefits.

I would encourage all of you to take up the opportunity to collaborate.

With the Primary Growth Partnership now a year old, the combined commitment by industry and government is already $368 million; spread over five projects.

This is the biggest investment in primary sector innovation in decades.

And it shows how focused this Government is on boosting economic growth through primary sector investment by central government.

The Government committed this funding because better business innovation is one of its six drivers of economic growth.

Let me run through some of the others.

At a time when many other countries are being forced to consider income tax increases, we have delivered across the board personal tax cuts that take effect on October 1.

Our company tax rate will fall to 28 cents in the dollar - lower than Australia. This will ensure we remain competitive, attract foreign investors and encourage exports.

Thirdly there is our ambitious trade agenda. Free trade agreements will deliver more for New Zealand export businesses than anything else we do, short of completing the Doha Round.

My colleague Tim Groser yesterday will have bought you up to date with progress and challenges.

Another driver of economic growth is cutting red tape and regulation. We've already simplified the Resource Management Act to reduce costs and promote growth, and further RMA reform is underway in areas that cover water and infrastructure.

The final driver I want to mention is infrastructure. First-class infrastructure is no different to any other investment. It is a critical enabler of higher productivity and growth.

The first part of the plan is underway, construction of Roads of National Significance have been prioritised.

Soon you'll see the rollout of fibre in our $1.5 billion ultra-fast broadband plan.

In the infrastructure area I am also driving hard to guarantee better management of water resources.

This is all about using our water resource more wisely. It's about efficient distribution, better allocation, and most importantly water storage.

Getting water management right will stimulate economic benefits for generations and is a most obvious creator of growth and productivity in the primary sector.

I now want to look at biosecurity because I know it's a huge issue for all of you.

Consider this amazing statistic - 175,000 items a day come across our borders.

As more people and goods enter, the potential for harmful pests and diseases to arrive increases.

Now consider that the primary sector is responsible for 66 percent of our export merchandise earnings.

A major breach of biosecurity would affect the livelihood of every New Zealander. Not only could biosecurity breaches devastate our primary production, it would put access to some of our best markets at real risk.

A huge amount of money, three quarters of a billion dollars, is spent annually on biosecurity in New Zealand.

This Government recently announced a range of measures to boost biosecurity preparedness and strengthen partnerships with industry.

These measures were not a snap decision. They are a considered response to the realisation that we can't stop all incursions, and we can't afford to eliminate all incursions once they're here.

We have decided to build and implement government/industry agreements, which will deliver better biosecurity preparedness and responses to pests and diseases.

This is not about spending less but about making better decisions with industry.

The Government also has signalled it will continue Crown funding of $30 million a year for managing bovine Tb, through to 2015. This decision has been made because it's crucial for our beef, dairy and deer industries and their ability to compete in global markets.

This leads me to a shift we are seeing with the current global trade situation. This is a change in what consumers are demanding.

Retailers are outdoing themselves to meet this demand by appearing to be ethically and environmentally responsive.

Simply, the consumer via the retailer is the new regulator.

In New Zealand we have a robust international reputation for safe and high quality commodities from a clean, green environment.

To protect this reputation some regulatory activities must be viewed as a necessary investment rather than just another compliance cost.

Investment in biosecurity, traceability, and emissions research are part of the Government's response to these new demands.

We already know what an asset New Zealand's reputation for food safety is.

Consumers are simply asking for another level of connection; to know that the food or fibre is safe, as well as ethically and sustainably produced.

We have the ability to provide this through strong verification of our credentials and enabling consumers to trace their products back to the paddock.

New Zealand is moving in this direction with the National Animal Identification and Tracing scheme.

It will provide greater guarantees around food safety, which is core to satisfying the demands of our export markets.

Purchasing food is an act of faith. Breach that faith and expect no mercy from the market.

Also in the event of a disease outbreak, NAIT would help give assurance to our export markets that New Zealand had identified and contained all the affected animals.

Advances in trade and innovation are of little value to the meat sector if New Zealand's reputation for safe and reliable produce comes under threat.

The Government is also working closely with industry to reinforce the green credentials of our primary products.

Since 2008, we have partnered with industry to implement a Greenhouse Gas Footprinting Strategy. This now covers over 80 percent of our primary sector exports - including projects on lamb, venison, beef, mutton, wool and dairy.

Action under this Strategy has helped improve our knowledge of New Zealand's key food and fibre exports - including identifying potential efficiency gains, emissions hot-spots, and areas for performance improvement across the value chain.

All important in a world that is increasingly counting carbon.

Government is also well aware of the challenges in reducing greenhouse gas emissions from agriculture. Especially at a time when the world needs to be increasing its food production.

There are two key initiatives underway in New Zealand to increase agriculture's ability to create wealth in a carbon constrained world:

The first is the New Zealand Agricultural Greenhouse Gas Research Centre: this is receiving PGP funding of $50m over 10 years to bring together all of New Zealand's scientific expertise in agricultural GHG mitigation research.

And the second is the Global Research Alliance: Government has committed funding of $45m over four years; it aims to strengthen international efforts to address agricultural GHG emissions. We now have 30 member countries in this Alliance and no one should underestimate the international kudos that New Zealand has gained in developing this initiative.

Ladies and gentlemen, in conclusion, the OECD forecasts world meat and dairy consumption will increase by almost 20 percent by 2018. That's only eight years away.

This means an improved outlook for prices and an opportunity for New Zealand to expand its export markets.

The challenge we have in New Zealand is to position ourselves to take full advantage of this.

In closing I want to take this opportunity to reaffirm this Government's commitment to ensuring that New Zealand farmers stay at the top of the global game.

There will always be new challenges, but also new opportunities.

To remain competitive in the international marketplace we must continue to nurture our strengths while at the same time taking responsibility for overcoming our weaknesses.

It is crucial that we continue to work together to invest and innovate.

I wish you all the best, and again, I apologise that I can't be with you today.

Finally, thank you Murray for delivering this speech on my behalf.