Office of Hon Jim Sutton

Apple and Pear Industry Act Repeal Bill first reading speech

Mr Speaker, I move that the Apple and Pear Industry Restructuring Act Repeal Bill 2001 now be read a first time.

This Bill was introduced into this House on Tuesday 19 June 2001, and I will shortly seek that it be referred to the Primary Production Select Committee for further consideration.

New Zealand's pipfruit industry is important to our economy and is a significant contributor to export earnings and to employment in regions such as Hawke's Bay and Nelson. It is innovative, and has led the world in new variety development and in on-orchard productivity.

However, the pipfruit industry is currently facing financial difficulties. The international market for pipfruit is mature and oversupplied. We are facing increasing competitive pressure from Southern Hemisphere competitors such as Chile and South Africa that increasingly are matching us in quality and varieties.

To help restore the industry's international competitiveness and profitability it is important that we have the best possible framework to govern pipfruit exporting. This Bill is intended to liberalise pipfruit export marketing, give growers a choice of exporter, and focus the pipfruit industry on meeting the needs of overseas markets and customers. I propose that this Bill take effect in time for the next pipfruit season, beginning 1 October 2001.

The existing regulatory framework for pipfruit exporting was established through the Apple and Pear Industry Restructuring Act 1999 and the Apple and Pear Export Regulations 1999.

The current framework gives ENZA a regulated export right over pipfruit exporting, and requires any independent pipfruit exports to be only through permits issued by an Apple and Pear Export Permits Committee. The existing regulations are controversial and are no longer supported by most growers and exporters. They are now considered to impose excessive costs on growers, to constrain entrepreneurship and new market development, and to impede our responsiveness to overseas markets and customers. The New Zealand pipfruit industry has been burdened with an excessively high cost structure, and this has been exacerbated by some poor investment and foreign exchange management decisions made within the industry.

New Zealand can no longer achieve a sustainable competitive edge by trying to restrict its export volumes through the current regulatory regime. Instead, the industry must improve its responsiveness to markets, be more entrepreneurial, reduce the cost structure of exporting and enhance its quality standards.

The Apple and Pear Industry Restructuring Act Repeal Bill will remove regulatory barriers to the export of apples and pears from New Zealand, and give growers a choice of exporters who will compete for pipfruit supply on an equitable basis.

The Bill disestablishes the New Zealand Apple and Pear Board and the Apple and Pear Export Permits Committee, bodies that are set up under the Apple and Pear Export Regulations 1999. The Bill includes provisions for the vesting of any residual assets and liabilities of these bodies. As a consequence, the Bill also removes references to the Board and the Committee from the First Schedule of the Official Information Act 1982. The Bill also provides that no compensation is payable by the Crown for any loss or damage arising from the enactment of the Bill.

The Apple and Pear Industry Restructuring Act Repeal Bill 2001 is a necessary but not a sufficient condition of restoring the profitability of the pipfruit exporting industry. It is highly desirable that the industry focus in future on international markets and customers rather than domestic politics. The Bill facilitates this by allowing growers and exporters to get closer to markets, develop responsive and sustainable relationships with customers, and exploit new market niches.

I also hope that exporters and growers will work together to address industry good issues such as market access, product integrity, and generic information that is of value to the industry as a whole. They can do so, if they choose, by forming a product group under the wing of the Horticultural Export Authority.

The Bill creates new opportunities for ENZA as well as for independent pipfruit exporters. ENZA has a global marketing network, skilled people, a strong brand, commercialisation rights over some key pipfruit varieties, and good skills and assets in marketing and logistics management. It is hoped that ENZA, independent pipfruit exporters, and the growers who supply them, will prosper in the new environment that will be in place from next season.

Over the last two years the Apple and Pear Export Permits Committee has considered and approved applications from independent pipfruit exporters for permits to export pipfruit that is complementary to ENZA. This has been crucial to the emergence of a group of independent pipfruit exporters who have developed their own relationships with overseas customers, and built up a track record of service delivery and achieving viable returns to growers. This means that New Zealand can go into the next export season with both ENZA and a group of niche-oriented exporters who can develop new markets and offer growers a choice of exporter.

I wish to thank the members of the Export Permits Committee for their work in managing the permits process in difficult circumstances. It may have seemed a thankless task at the time, but history will recognise that their work was critical to managing the transition from single desk to fully competitive pipfruit exporting.

I believe this Bill will help give new life to the pipfruit industry and allow it to address the challenges it faces in international markets. I intend that Parliament refer this Bill to the Primary Production Select Committee and that the Committee report back on the Bill by no later than 6 September 2001.

At the conclusion of the first reading, I will be moving that the Primary Production Committee be able to meet while the House is sitting to consider this Bill.

I commend this Bill to the House.

ENDS

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