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Andrew Little's Speech to Federated Farmers

Thanks very much for having me here today. I'd particularly like to acknowledge Outgoing National President, William Rolleston; Anders Crofoot, National Vice President; Members of the Federated Farmers Board; the National Council; the Provincial Presidents; Damien O’Connor, my Primary Industries Spokesperson; and farmers all around New Zealand.

The future of New Zealand’s primary industries can be summed up in two words — science and sustainability.

These are the twin pillars of Labour’s approach.

Modern farming is a scientific endeavour. Scientific innovation drives advances in plant cytology and animal husbandry, land management and product development. From the farm gate to the supermarket shelf, the guiding hand of science is signally evident.

But scientific progress and the application of science to your business only makes sense if it is employed on a sustainable basis. Every farmer knows their relationship with the land is a relationship of trust.

No-one ever possesses the earth beneath us in an absolute sense. It is not ours to use and cast off as we wish. It entrusted to our care for the use of both present and future generations. Every farmer knows their relationship with the land is an act of guardianship.

Environmental sustainability is the foundation of our agricultural industry. Sustainability is exactly why none of you continuously graze on the same paddock for years without giving it a rest. Your future depends on the good practice of your members. You cannot allow this future to be compromised by the short-sighted practices of an exploitive minority who see farming as an extractive industry.

Farming is the backbone of our economy. Your success is New Zealand’s success. Continuing our shared success requires us to keep moving our agricultural products up the value-chain. To focus on developing products which add maximum value here in New Zealand and capitalise on our clean green image. It requires the successful marriage of science and sustainability.

The dairy industry has already made significant progress in moving our agricultural products up the value-chain. Fonterra is constantly widening its range of value-added products. It has also broadened and deepened its market reach. It no longer simply functions as a major commodity producer and exporter. It has set up powerful manufacturing and distribution networks in offshore markets and it has driven product innovation and development back home. This is great progress.

But it’s not just Fonterra. A host of smaller suppliers have also developed boutique, value-added products for both the domestic and export market. These products cater to the growing market for gourmet products. In terms of maximising the industry’s value to New Zealand this is particularly promising. It generates employment in the regions, builds their economies and sustains them as vibrant and progressive communities.

We are also seeing impressive product diversification in other primary sectors. The range of specialty cuts and gourmet products now produced from our beef and lamb is evident at every local supermarket. These products cater to both domestic and international consumers who are ready to pay a premium for top quality, sustainably farmed products. Imaginatively designed and packaged food products that are underwritten by sound environmental credentials. We can even chart the path of many of our beef and lamb products from farm to plate. It is the ultimate consumer guarantee. They leverage our clean, green image by matching it with high quality production standards and sharp marketing that anticipates market trends.

But there’s more. Our wine industry is a world leader focussed on the production of premium varietals that have an international following. It is committed to continuing renewal and diversification. Each year new varietals are put into production and older ones brought to new levels of sophistication. It has also developed valuable complimentary crops such as saffron grown in conjunction with grapes. Similar possibilities also exist for the production of gourmet mushrooms and Chinese ginseng as by-products of our forest industries.

Our horticulture sector is also constantly developing new varieties of produce. We are again world leaders with more new varieties of apples, pears and kiwifruit to our credit than any other country. We have successfully employed advances in plant cytology and breeding to develop new varietals for both developed and emerging markets.

These developments also extend to less high profile products such as seed crops and new varieties of onions and potatoes.
The common thread that links all these industries is the ability to put science into commercial production and sustain consumer demand through a constant process of innovation and renewal.

Many farmers have also taken advantage of this broad diversification and developed mixed-use farms that combine horticulture, viticulture with more traditional products. This enables farmers to compete more effectively on the world market.

However, a number of clouds on the economic horizon suggest that we should think hard about how we maximise the contribution of agriculture.

Much of our ability to sell produce at a premium is based upon maintaining the clean, green image of New Zealand overseas. If we tarnish this image, the price of our goods will fall.

There are very real environmental constraints on growth and we need to question the value of simply sweating our existing assets. We need to think hard about how we make our farming sustainable for the long term.

These constraints, and changing market preferences, give us opportunities as well as threats.

For example, the growth in pharmafoods or neutraceuticals is, in spite of its rather bizarre name, an important and growing industry. In plain English, it’s the market for dietary supplements and food additives — products like protein supplements and vitamin-enriched milk. Products that can claim specific medicinal properties.

Current New Zealand examples include Manuka honey and Chinese ginseng both of which possess unique and scientifically certified properties. Manuka of course is native to New Zealand and we are also one of the few countries that can successfully grow ginseng.

Our ability to deliver the higher margins for foods based on their health qualities or their natural production methods needs to be better supported by government and the sector. Our industry will also be challenged by the growth in products such as manufactured milk and laboratory grown meat which is likely to change the nature of meat and dairy consumption in the developed world.

Although these products will never completely displace natural products they will reduce demand in the longer term. This presents both an opportunity and a threat. Although it may reduce overall demand it will also increase specific demand for natural foods produced according to environmentally sound practices. This is why it is so important that we protect our clean, green image and all the positive associations that go with it.

The world has entered a protectionist phase and this could result in our farmers facing trade barriers in some markets. Labour is a party of trade and will look to reduce trade barriers wherever it is in the national interest.

Farmers are also facing economic threats from climate change, both in terms of seasonal change, and in terms of extreme weather events. We need to be working together to reduce emissions from farms, and to increase the ability of farmers to respond to likely future challenges.

To yield its full benefits, innovation must be driven by a national strategy that articulates a vision for the future of the industry. KPMG’s Agribusiness Agenda 2017 has articulated this need well. KPMG’s Recipe for Action calls for:

…a values-led framework for the industry, recruiting and training the best talent, rapidly deploying leading edge technology, exploring new business models , getting closer to customers and ensuring operations meet the expectations of the wider community.

This is the type of framework we must develop in partnership with business. To achieve it we must invest more in research and ensure that agriculture attracts our best and our brightest.

Labour has the research and training and educational policies to make this happen.

We also need to look hard at the establishment of national standards for our products. The dispute over the certification of Manuka honey needs to be resolved immediately.

New Zealand also has the potential to reap huge benefits from the rapidly growing demand for organically produced food and produce. Yet we currently have no system of national certification.

There is an immediate need to address these issues. Government accredited standards are needed to secure our integrity of these and other new and emerging products. Labour will deliver those standards.

But we cannot fully capitalise on new research and national standards if many of our farmers can’t readily access it. National has failed to deliver vital broadband services to many rural areas. It has poured millions of dollars into the coffers of Vodafone but failed to deliver services where they are needed.

Labour will reverse this. We will ensure that our rural communities have access to efficient and reliable broadband services without continuing to pour millions more into corporate coffers.

Labour’s got a fresh approach to innovation in agriculture. Here’s what I believe: If we are to meet the challenges of the future it is essential that we increase research and development.

Labour introduced a R&D tax credit in Budget 2007. The tax credit was designed to increase investment in these vital areas.

One of National’s first acts in government was to axe the R&D Tax Credit. This went against Treasury advice that an R&D tax credit would help to expand the economy through innovation and higher productivity.

Labour will introduce a new Research and Development Tax Credit so that business has some certainty that they can put the time and money into new ideas.

Over the past nine years the National Government has spent $350 million on Primary Growth Partnerships. This has been matched by industry on a dollar for dollar basis to reach a total of $700 million. This expenditure has resulted in fewer breakthroughs than were anticipated. It has also come at the expense of our agricultural research institutes that lack the funding security needed for research in critical areas such as soil science and water management.

Labour will ensure that funding is directed back into core research.

You know, research and development is just one part of Labour’s fresh approach to agriculture. So many of our other policies also help your sector.

Recently I announced a new immigration policy which will reduce immigration by 20-30,000 a year.

I said at the time and wish to make it abundantly clear here today that Labour will ensure that business gets skilled migrants when there is genuine need. This includes the agricultural sector.

We’ll also make it easier for regional New Zealand to attract the skills it needs. Currently, few skill shortages are targeted to the regions that actually need them. Labour will work with local councils, unions and businesses to ensure that regions get the workers they need.

Regional development is important to Labour. We want to see growth across the entire economy. We don’t want talent and opportunity driven out of the regions.

This is what Labour’s $200 million Regional Economic Development Fund is about. We’ll invest in infrastructure and value-added industries to lift wages and drive local development. Projects like those we’ve already announced for a timber plant in Gisborne, a Centre for Digital Excellence in Dunedin and Port Restoration in Whanganui.

Our young people need jobs, training and opportunities. Currently, there are 90,000 of our young people locked out of the economy. Neither in work nor training, they are the victims of a generational divide that has robbed them of hope, robbed them of a future — of the prospect of a worthwhile and fulfilling life.

Labour’s going to help them, and help employers, in several different ways:

1. We’ll develop partnerships between schools, businesses and training providers. Those partnerships will enable industries such as yours to build direct links with our secondary schools and promote job opportunities directly to school leavers.

2. We’ll prepare our young people for the workplace by giving them hands-on experience while still in school with flexible approaches like our Gateway programme.

3. Labour’s Ready for Work programme will give unemployed young people a job for six months doing work of public value, so they can gain work experience, develop good work habits and build the confidence to enter the job market.

4. For every employer who takes on an apprentice pay them the equivalent of the unemployment benefit through our dole for apprenticeships policy. Labour will support business with apprenticeship and training programmes that provide employment opportunities for our youth.

We’ll ensure our young realise their full potential and secure the long-term future of business in industry and farming.

All this will be of little value if we do not protect our environment and the value of our clean, green image in international markets.

Labour is committed to sustainable farming. We want to help extend best practice throughout the industry. Sustainability is and must always be the foundation of our agricultural Industries and to protect this we must put in place effective policies which will reverse the pollution of our waterways and depletion of our land.

Labour commends those farmers and other land users who strive for excellence in their environmental stewardship, while running profitable businesses. Many of your members have shown that dairy and other farm systems can be profitable without degrading our land and waterways. You have shown that precision irrigation can minimise the loss of nutrients and pathogens to groundwater, as can practices such as stand-off areas, appropriate stocking rates, and riverside plantings.

Labour will put in place active policies that will:

• Promote best practice land use
• Minimise the environmental impact of fertiliser and effluent
• Ensure compliance with nutrient budgets.

Labour will support productive, profitable agriculture that protects the environment.

We’ll work with you to ensure farm practices benefit from the latest technology.

We’ll look to include riverside plantings within the Emissions Trading Scheme.

And we’ll explore the opportunities for dairy companies, meat and horticultural processors to take greater responsibility for the environmental performance of their suppliers.

The quality of our water and waterways is also a broad social issue that extends beyond the immediate needs of industry.

Adoption of better practices will improve agriculture’s public standing and confirm that farmers are responsible corporate citizens.

These are all policies that will help secure the future of our most important industry. After nine years, it’s time for a fresh approach. It’s time for the government to step up to its responsibilities, to play its part in investing in the regions — to generate growth and jobs throughout the country. We need a new and inclusive vision of the future of farming.

A future based on science, sound environmental management and investment in rural communities.

We are in this together. Our prosperity as a nation depends on our facing the future boldly. It depends on our willingness to put science into practice. It depends on our ability to manage our most important industry sustainably. And it depends on honouring our guardianship of this land — our trust to future generations that this too will be theirs. Theirs because we valued and cherished it and shared in the aura of this land.

Thank you.