26 July, 2012
Speech to Riddet Institute Conference
It’s great to be here to have the opportunity to talk about the important contribution that agri-food sectors make to the New Zealand economy.
Agri-food accounts for:
• more than $24 billion of exports
• about 10 per cent of total employment in New Zealand
• over two-thirds of New Zealand’s merchandise export earnings; and
• more than half of New Zealand’s manufacturing.
That doesn’t include the significant contribution our fibre industries – wool and timber - also make to New Zealand’s economy.
We all know our comparative advantages within the agri-food sector. But as you know, we must now leverage these advantages to further benefit all New Zealanders.
To succeed, we must increase our level of production and increase the value of what we produce.
I congratulate the Riddet Institute for helping to do this.
Not only has the Institute shown leadership by sponsoring the Call to Arms: A Contribution to a New Zealand Agri-Food Strategy report that’s being released today, but it is demonstrating how working with industry creates success.
To the authors, I thank you for acknowledging the work the Government has done, and will continue to do, to accelerate growth of the agri-food sector.
As your Report states, Government has set the direction and committed increased efforts and resources – we have done a lot – industry must now act.
The Strategy Report highlights that if we are to achieve the standard of living we aspire to by 2025, we must treble the real value of our food exports to about $60 billion.
This is a real compound growth rate of around 7% over the next 13 years.
Quite a daunting task, as your report rightly points out, particularly in the currently economic environment.
To achieve this target of 7%, we must close a gap of current progress of around 3% - which is the focus of the report.
While the agri-food sectors have been successful, we need to grow faster.
To realise growth, we need to collaborate, be innovative, build on our strengths and continue to earn our reputation for safe high-quality food, produced in a sustainable manner.
The authors of the Call to Arms report challenge us all. They clearly state that if success is to be achieved, business as usual will not be enough.
Dr Kevin Marshall, also a foundation member of the PGP Independent Advisory Panel, will outline the strategy in more detail shortly.
Part of the strategy is trade access.
We all know that sustained profitability won’t come from relying solely on swings in the international market.
Nor will it come from New Zealand individuals and companies acting in isolation.
The sector must focus on where it’s heading longer term.
At an international level, the world economy remains precariously balanced.
The EU, the world’s largest economic trading bloc, faces a threatening situation as it deals with countries like Greece, Italy and Spain, and the US isn’t much rosier.
In the past, this would have had a huge impact on New Zealand.
After all, some of these countries were once our main export markets.
And although these traditional markets are still very important to us, we are lucky to have repositioned ourselves so significantly to Asia, and China is now our second largest trading partner.
In the last financial year exports to China have jumped by nearly 40 per cent.
This trade swap hasn’t happened by accident.
The Prime Minister’s ambition, shared by China’s leaders, is to double bilateral trade to China to NZ$20 billion by 2015.
We are negotiating Free Trade Agreements with the eight other Trans-Pacific Partnership countries, including the US, and now joined by Canada and Mexico.
We are also talking with Russia, India and South Korea.
There’s a lot of promise in these markets, but an ever-changing world demands ever-changing, adaptive and innovative industries.
We urgently need more innovation in the primary sector.
This Government is committed to working with our industries to grow New Zealand’s export earnings through more value-added products developed through market-led research programmes.
The Primary Growth Partnership is the most ambitious primary sector research and innovation programme ever seen in New Zealand.
In less than three years the Primary Growth Partnership has pledged a staggering $590-million dollars towards cutting-edge primary sector research and innovation covering everything from forestry, meat, dairy and wool to seafood and Manuka honey.
I want to finish today by reaffirming this Government’s commitment to New Zealand’s agri-foods sector.
I encourage you to always look ahead and take advantage of the opportunities that will make New Zealand’s agri-food sector even more successful in the future.
Please read and distribute widely the Agri-Food Strategy Report: A Call To Arms.
Like the authors, I challenge people - especially industry leaders - to take the lead and be even more proactive in growing the agri-food sector.
Our country’s future, like its past, will continue to rely on primary production. This Government understands and appreciates this.
So – let’s work together to accept the Government’s challenge to raise exports from 30% of GDP to 40% of GDP. If we do, we deliver prosperity to all New Zealanders.