Thank you to Graeme Williams for your introduction. It is good to be here in Gisborne.

As this is my first official speech in the Gisborne region since becoming the Minister of Agriculture, Forestry and Biosecurity I thought I would spend some time talking about the challenges and opportunities facing primary industries and my priorities as your Minister.

The first challenge I want to bring up is the drought local farmers here are facing. You are going into your third rough year. Even though I have brought the rain, I know with the drop in soil temperature it will be too late for the much needed grass growth.

For this reason I have today announced Government assistance for drought affected farmers in the Gisborne/Wairoa region. This includes provision of tax assistance measures, funding for farm management advice and funding for Rural Support Trusts to provide help.

Before coming here I met with the local drought committee. As your Minister, I encourage those affected to act early and seek advice so as to make good planning and management decisions. Government, sector groups, local government, farm consultants and the Rural Community Support Trust are all there working together to get farming families through this.

It won't be much consolation to locals here tonight, but I can report the Gisborne and Wairoa regions seem to be the only areas of New Zealand that haven't enjoyed a reasonable autumn. In contrast to last year, the price of supplementary feed is down and the price of store stock is up - these factors of course will be of some help to local farmers.

I have done a fair bit of travelling over the past month and farmers up and down the country are positive, despite the global economic situation.

For good reason, I too am very optimistic. The New Zealand primary sector has some great things going for it and I believe it will be our sector that leads New Zealand's recovery.

These are the reasons why:

Sound financial systems - Unlike other countries, our financial systems and banks are sound.

Trade - The Government is working incredibly hard on free trade agreements, especially across Asia, which will help to maintain and grow our market access through these turbulent times. Although the World Trade Organisation Doha Round is halted, progress is being made in New Zealand with a number of multi and bilateral free trade agreements. We have a large number of trade negotiations proceeding with countries as varied as South Korea, Malaysia, India, Hong Kong, Japan, Brunei, Chile and Singapore.

If even half of all these trade agreements come to fruition within the next few years, the difference they will make to market accessibility for New Zealand primary producers is staggering.

Free market - Our farmers and foresters aren't subsidised. New Zealand farmers survived the 1980s when government subsidies were removed. In fact they showed their resilience to the world. Without subsidies our farmers are market driven and more productive than ever before.

Water - Perhaps Gisborne is not the best example at the moment, but in general New Zealand has plenty of water. We are blessed with the magic ingredient for growing grass and trees. The key is harnessing this potential - clearly we could do this better. Water storage and infrastructure is a priority for this Government.

These are just four reasons for my optimism, but there are challenges we must face as a sector too.

Recently I have spent a fair bit of time talking about the importance of the forestry sector to New Zealand - only last month I addressed delegates at the International Forest Biosecurity Conference in Rotorua. I have visited the Crown Research Institute Scion and since becoming Forestry Minister I have met with foresters in Wellington, Blenheim, Tauranga, Rotorua, and Christchurch.

From these meetings it is clear that the biggest challenge, and one I want to acknowledge and talk about in detail tonight, is the uncertainty created by the Emissions Trading Scheme review.

Let me explain where we are up to.

Prior to the election, National campaigned to review Labour's Emissions Trading Scheme. The Act Party campaigned to scrap the ETS. The result post-election is a Select Committee review that we must now facilitate as quickly as possible.

At present, we are in a period of dramatic change as the Government comes to terms with New Zealand's contribution to global efforts to reduce carbon emissions and combat climate change.

I understand, and so do my colleagues in Cabinet, the need for certainty on forestry's role in this effort. That said, there is also a pressing need to review the Emissions Trading Scheme we have inherited, to ensure it meets the balance between economic needs and environmental responsibilities.

Forestry is in the unique position of being part of the current ETS, while a review takes place. Getting an enduring solution is a priority for me as your Minister.

However, one thing is clear. This Government is committed to a price-based mechanism to reduce emissions and meet New Zealand's international commitments under the Kyoto Protocol. Recent figures released by Climate Change Minister Nick Smith show forestry is an essential part of the solution to climate change. At this stage, pending the outcome of the review, an ETS is the Government's preferred option - and forestry will be part of that mechanism.

This undertaking means foresters can invest with some certainty, knowing that the carbon removed by the trees they plant now will be recognised in some form in the future.

Agriculture can't argue to be entirely exempted, but my belief is a combination of farming and forestry offers the chance for farmers to counter their own emissions.

Besides the ETS, the Government is offering two carbon-credit schemes to choose from; the Afforestation Grant Scheme and the Permanent Forest Sink Initiative.

The Afforestation Grant Scheme is designed to encourage greater levels of greenhouse gas absorption by increasing the area of new, Kyoto compliant forest in New Zealand.

It provides a government grant for planting new forests on land that was not forested on 31 December 1989.

Participants own the new forests and after 10 years can earn income from the timber and, unless the forest owner joins the Emissions Trading Scheme, deforestation can occur without any liabilities.

The Government wants to encourage tree planting, especially on marginal land and hill-country.

The Permanent Forest Sink Initiative may be an attractive alternative to the ETS, especially for those who want to plant land with trees to create a forest where there is no intention of clear-felling.

Under this scheme participants have a covenant registered against their land title for a minimum of 50 years and up to 99 years. Carbon credits are earned and they can be retained or traded.

This scheme could be an ideal opportunity for someone who wants to plant slower growing trees including indigenous species; something I believe has great appeal and potential for farm foresters.

Let me be quite clear at this point - as a farmer myself I firmly believe that farming and forestry make the perfect fit and I believe we need to see more partnerships between farming and forestry.

There are economic benefits that can follow an expanded forest estate.

But the form of forestry planting may differ, reflecting the areas that will be planted and the motivations of the individuals or companies.

On eroding hill country farming blocks, a patchwork of planting may develop, while on higher altitude sites there may be a wider range of plantings, reflecting the terrain and climatic conditions.

Another point is the use of forestry to prevent erosion. There is no better example than the East Coast Forestry Project - initiated after Cyclone Bola.

Increasing the number of plantings on the farm provides many benefits besides simple erosion control; provision of shade and shelter for stock welfare, enhancing aesthetics, encouraging biodiversity and providing an income.

I want to close by letting you know that forestry is a priority for me as your Minister. Many of you may know me as a farmer, but I want to assure you that agriculture won't be placed ahead of forestry or biosecurity under my leadership.

I believe if sustainable land use in terms of partnering agriculture and forestry is ever to be anything more than just a catch-phrase, then landowners need to have a better understanding of the multiple benefits of forestry.

I recognise that forestry has a critical role to play in land management given its ability to reduce flood impacts, improve water quality and management.

I want to finish with what I believe are some opportunities within the forestry sector that would help in lifting us out of this recession and further drive the New Zealand economy:

• improving productivity throughout the value chain, thereby improving profitability


• attracting new investment in forest growing and wood processing


• developing new markets and increasing New Zealand's share in existing markets


• ensuring forestry and wood processing are attractive career options, especially for young people


• opportunities to differentiate New Zealand products so we don't compete solely on price


• high tech sawmills with greater scale where the resource enables this


• spreading risk through incorporating carbon farming opportunities into the business


• greater efficiencies in transportation (logistics and logging truck configurations)


• small scale forest owners looking to collectively maximise the value of their resource.

As I said earlier, there are both great opportunities and great challenges facing the primary sector.

The importance of forestry and farming to East Coast and the fundamental role it plays in this community is abundantly clear to anyone who visits. Never forget you are the backbone of this community and of this country. You are also the reason I am an optimist.

I hope the weather is kinder to you for coming seasons and suggest, next time, you invite the Agriculture and Forestry Minister, who is well-known for bringing rain, at the earliest opportunity.

(Please note this speech may differ from delivery.)