Speech to Federated Farmers 2015 Annual Conference

Good morning and thank you all for the opportunity to speak to your annual conference here this morning.

I would like to begin by acknowledging your President, Dr William Rolleston; Chief Executive, Graham Smith; members of your National Board; and all other members here today.

My congratulations go to Dr Rolleston who has just been elected as the Vice-President of the World Farmers Organisation.

I met with newly elected WFO President Evelyn Nguleka and Executive Director Marco Marzano in Europe recently.

As an organization “of farmers, for farmers” the main focus of the WFO is to represent the interests of its hugely diverse constituency in international forums where they are often the only voice for farmers.

William’s addition to this organisation will help promote a broad range of international agricultural policy issues including trade, climate change, and food security. 

I also want to acknowledge your conference theme of ‘Resilient Agribusiness’.

Farming in New Zealand in 2015 can be summarised in two words: challenge and opportunity - it is through resilience that the former turns into the later.

Whether it’s fluctuations in commodity prices or the weather, 2015 has already thrown many examples of farmers being presented with challenges and responding with resilience.

There will still be many challenges ahead.

Today I want to talk about how we can realise the opportunity that comes with each challenge.

I want to talk about how we need to start celebrating our own success.

I want to talk about how we need to start avoiding the common Kiwi ‘tall poppy’ mentality, and sell to the rest of New Zealand and the world the real journey behind our products.

Economic overview

But before I begin, it would be sensible to give the current economic context.

As many of you will be aware, MPI has released their Situation Outlook for Primary Industries.

It shows that total primary industries export revenue for the year to June 2015 is expected to be $35.2 billion – eight percent down on the previous year, due to falling dairy and forestry prices.

At the same time, this is slightly offset with increases from meat and wool prices that are expected to increase by 8.2 percent to $8.8 billion.
 
Horticulture has had a record year with total earnings topping $7.5 billion for the first time. Kiwifruit in particular has bounced back strongly from Psa with over $1 billion in exports, and wine also benefitting from significant growth. 

It will be a tight year ahead for the dairy sector with reduced commodity prices. While the global dairy markets look to be volatile for most of 2015 MPI expects dairy export revenue to recover in by June 2016, and rising to $18.4 billion by June 2019.

A build-up of log inventories and slower construction growth in China has recently depressed log prices. The outlook for forestry to 2019 is expected to see growth in exports to China and potentially India, while other key markets remain steady.
 
It’s very important for us to remember that the medium to long term outlook for all primary sectors is very positive, growing by 17% to over $41 billion by 2019. For example, as the Asian countries on our doorstep become increasingly wealthy, their demand for our protein and our products is only going to increase. 

We have over 3 billion customers just one long haul plane flight away.

Budget 2015

Budget 2015 was a very significant one for the primary sector.

You have heard me talk about Biosecurity being my number one priority since I became Minister and I'm proud of the extra $27 million that will help further strengthen the overall biosecurity system with more detector dogs, X-ray machines and people.

The international passenger border levy will also ensure, as future passenger volumes grow by 3-4 % per year, that this funding continues to increase. 

Droughts are challenging for our farmers and growers and most of the East Coast of the South Island has suffered a pretty tough drought. Even now conditions are still very dry in North Canterbury.

That's why the Government has a real focus on water storage projects and $25 million has been allocated for the Irrigation Acceleration Fund to help kick start these important regional projects. 

We are also focussing on skills and agriculture development with an extra $7.5m that includes boosting overseer and an extra $10m will help implement and strengthen the new Animal Welfare Act.

Celebrating our successes

What we don’t do well as Kiwis is blow our own trumpets.

Humility is always considered as an admirable attribute of every farmer.

But if we don’t celebrate our success, we offer no context to the general public, and we leave ourselves with no counter balance to the actions of a few bad eggs.

If we don’t celebrate our success, our industry will be forever tarnished by the actions of a very small minority.

We have no reason to be so modest, as we have a lot to celebrate across the primary industries.

Innovation / Primary Growth Partnership

As I said in my opening remarks, with every challenge comes an opportunity.

Making an opportunity out of a challenge is called innovating. And innovating is something that Kiwis do well.

I want to take this quick opportunity to acknowledge your recent announcement of the creation of your national water team, and your soon-to-follow national science and innovation team.

This initiative will help you to lead the priorities of your organisation and members across a range of very difficult and complicated areas, and is to be commended. 

The 2015 Budget provides for additional investment in science and research to bring total funding for science and innovation to over $1.7 billion in 2015/16.

This will include up to $25 million over three years to support the establishment of new, privately-led Regional Research Institutes, to support increased innovation in regional areas outside of Auckland, Wellington and Christchurch.

Protecting and enhancing the sustainability of our environment is an important part of the future of our primary industries, especially as we look towards ensuring its longevity for future generations of New Zealanders. 

I acknowledge that, in particular, national water standards present new challenges for farmers; the Government is working hard to provide new tools in the toolbox for farmers.

The Primary Growth Partnership continues to throw forward innovative solutions in achieving this.

Pioneering to Precision

The Pioneering to Precision programme will transform farming returns by enabling hill country farmers to grow more grass, without increasing the environmental impact.

At the same time, the programme will increase the environmental sustainability of hill country farming by minimising fertiliser application near waterways and wetlands. Accurate placement of fertiliser in the right amounts also decreases the risk of nutrient enriched sediment entering waterways.

With help from Massey University, Pioneering to Precision has purchased a Fenix hyper spectral imaging system — technology originally developed for use in the military to enable New Zealand scientists to capture unprecedented levels of data about the nutrient content of large sections of land that may have been previously inaccessible.

Understanding the nutrient content levels across properties is an important step towards lowering the impact of fertiliser application on the environment, and making the imaging system available to others will lead to benefits outside of the PGP.

The remote sensing technology, if successful in hill country fertiliser management, will have applications in a range of other sectors including lowland dairy farming and forestry.

The Transforming the Dairy Value Chain PGP programme

The Transforming the Dairy Value Chain PGP programme has placed a strong focus on environmental performance, and ensuring farmers have accredited experts they can turn to for advice. The benefits of this are now being realised.

The programme is reducing environmental impacts, with 590 dairy farmers in the Upper Waikato now completing Sustainable Milk Plans.

These plans detail a range of more than 4,700 agreed actions covering effluent, nutrient and water use management – and will make a significant contribution to local water quality in the region.

The Upper Waikato pilot was funded in part through the Transforming the Dairy Value Chain PGP programme and managed by DairyNZ and the Waikato River Authority - with strong support from the wider dairy industry.

Building on the work the PGP has supported, the project is now expanding to cover farmers dairying near and beside the Waipa River.

The Seed and Nutritional Technology Development

The Seed and Nutritional Technology programme has made good progress towards improved environmental outcomes through its development of forage crops that are drought and climate resilient.

The programme has successfully integrated molecular and field techniques to improve water use efficiency, develop new kale cultivars and hybrid brassica to deliver better yield and improve insect and disease (clubroot) tolerance and plant persistence from multiple grazing.

Clearview innovations

The Clearview Innovations programme is aimed at developing a suite of products to help farmers improve nutrient use efficiency and reduce losses to the environment. 

This programme has delivered N-Guru™, a software tool developed with AgResearch that enables farmers to tailor application rates to areas which are likely to produce the highest pasture response.

This technology can help to improve the efficiency of fertiliser use, by linking data from the farm with a nitrogen response database.  It enables farmers and farm advisors to forecast which parts of the farm are likely to be more responsive to fertiliser, and tailor its application accordingly.

Sustainable Farming Fund

The Sustainable Farming Fund provides Government investment for grass-roots projects that support farmers, growers and foresters to tackle shared problems and develop new opportunities.

One example being a platform to help educate farmers in the Clutha District to better understand water quality in relation to land use practice.

Projects like this deliver real economic, environmental and social benefits to help achieve a more sustainable primary sector.  

Balance Farm Environment Awards

The Ballance Farm Environment Awards, and more generally the work of the Trust, also embodies this vision, and it was great to host the annual awards in Parliament last week.

An important part of these Awards is the way the entrants act as positive role models for the farming community, showing how farming can be environmentally positive and profitable but, most importantly, achievable.

Sharing success stories with others in the sector is crucial, as farmers learning from other farmers is the best way for our industry to improve.

Also of great importance is the way the Awards spread good news stories about farming to the wider New Zealand public.

Rotorua winners John and Catherine Ford have a sheep and beef farming business that is in the top 5% of profitability and have built 200 detention dams to slow run off and reduce erosion. 

This is an impressive couple who I’m sure will be great ambassadors.

Global Research Alliance

One of the greatest untold stories in New Zealand innovation is the Global Research Alliance.

I recently announced that Doug Avery and Zach Mounsey have been selected as winners of the 2015 Global Research Alliance on Agricultural Greenhouse Gases (GRA) - World Farmer Organisation Study Tour in Argentina later this year.

The purpose of this study tour is to increase global understanding and engagement on agricultural greenhouse gas research. These two winners will have an important role as ambassadors for New Zealand in sharing environmental management practices that support sustainable productivity.

The primary sector comes in for a lot of criticism in regards to environmental performance and climate change, and we are often accused of sitting on our hands.

The reality couldn’t be further from the truth.

It’s often lost on these detractors that New Zealand is only 0.15% of global emissions, and the challenges of climate change are greater than any one country can address.

New Zealand initiated the establishment of the Global Research Alliance on Agricultural Greenhouse Gas Emissions to support collaborative research that would enhance productivity and reduce emissions intensity.

We need to work with other agricultural producing countries to ensure practical responses to the challenges are developed that help and do not hinder agriculture.

Research and innovation is critical to respond to this challenge; it takes many different forms depending on context, but at its heart always lies coupling the insights of farmers and land managers with the frontiers that science can provide; science without farmers is sterile; farmers without science will not keep up the pace.

The early breakthrough of our top scientists to potentially reduce greenhouse gas emissions from sheep and cattle by 30 to 90 percent without reducing production is cutting edge research.

There is still much work to do to develop a safe and commercially viable solution which may take over five years, but it’s very exciting progress.

We need to celebrate their successes.

Whanganui

Finally I want to acknowledge the difficult conditions in the wider Whanganui region at the moment.

Yesterday I was in the Hills West of Whanganui to announce  to announce that $8.8 million in funding grants over four years will be provided to help councils and farmers tackle hill country erosion.

The current round is supported by funding from local councils and landowners, and will provide funding that covers 549,724 hectares of erosion prone hill country.

I’ve seen firsthand the serious damage that erosion has caused after the severe storm in the Whanganui, Rangitikei and Taranaki regions, both economically and environmentally.

This funding round is timely, given that $4.7 million out of the total $8.8 million is going towards the Horizons Regional Council. This has been badly affected in places by the flooding and landslides.

The fund gives local councils the opportunity to plan and deliver initiatives over the next four years to tackle this problem. This includes projects like tree planting, farm planning, modelling and targeted treatment works.

Closing remarks

To conclude, I would say that farming in New Zealand this year is about challenge and opportunity. There are plenty of both.

I will continue to be your champion for the primary sector in Parliament and make sure your important voices are heard at the Cabinet table and beyond.

Thank you once again for the opportunity to speak here today, and all the best for your AGM tomorrow.