NZ Grain and Seeds Trade Association annual meeting Christchurch

Ladies and Gentlemen: despite the best efforts of men and machines, farming is still at the mercy of the elements.

Sometimes we need to be reminded of that. And right about now, we¡¦re going to be reminded of it by the hit in our wallets.

Yesterday¡¦s Christchurch Press said it all: ¡§bread, fruit, vegetables and some sorts of meat look set for price rises because of bad weather¡¨.

¡§The drought in Australia is behind an expected 50 per cent hike in the price of wheat, while too much rain and cold weather in New Zealand are expected to affect fresh fruit and vegetable prices.¡¨

Other media reports say the drought, the worst in a century, has slashed Australia's wheat crop by up to three-fifths, resulting in higher prices of Australian flour, which in turn could lift the price of a loaf of bread by around 10 cents and up to 20 cents for a traditional meat pie.

They go on to say chicken and pork prices may also rise, because farmers are paying more for grains used in stockfeed.

Local wheat growers can meet the demand for flour in the South Island, but the North Island relies on imported flour, most of it from Australia.

The drought in Australia is likely to put significant pressure on you. In order to supply customers with the grain and seeds they want, it is likely that you will be searching hard for alternative markets.

That in turn will put pressure on the Agriculture and Forestry Ministry, who maintain the import health standards.

Revision of the standard and schedules for sowing seeds will improve clarity. It is also intended to introduce the requirement for a phytosanitary certificate to be issued by the supply country for all seed.

MAF intends to consult with industry about this review in autumn next year, with an introduction planned for either late next year or early the following year.

There is an urgent need to revise the species and genus schedules for some species within that standard.

So far, we have draft schedules for: Barley (Hordeum), Broad bean (Vicia), Green bean (Phaseolus), Oat (Avena), Pea (Pisum) & Wheat (Triticum). These schedules will be out for consultation by the end of this month with their introduction planned for early next year.

Then there is the review of the import health standard for the importation of grain for processing and consumption.

MAF has been conducting a review of the import health standard Importation of Grain for Processing since the end of 2001.

There are several problems with the current standard. These include that:

„h The phytosanitary requirements are primarily based on the presence of weed seeds. „h There are limited numbers (up to five) of other pests identified as being of concern „h The measures are not equivalent to those for seed for sowing (in other words it is possible to sow Class I grain (cleared at the border ¡V only inspected for the presence of weed seeds) without the seed being treated). „h The current supply is limited to three countries (Australia, Canada and the US). This is historical and has no technical justification. The requirements are not based on robust import risk analyses.

MAF is aware of both the inadequacy of the standard and the supply problems that affect the import industry from time to time and is reviewing the standard based on the pests associated with the import/production pathway. Depending on the end use of the grain and the possibility of ¡§in-built¡¨ measures, importers should have a far wider and more flexible source of supply countries from which to import. This will help with forward planning.

An integral part of the revised standard will be the recognition and approval of post border activities undertaken during processing. Depending on the regulated pests present in a supply country, MAF will issue import permits to the operators of those facilities/systems that are able to be accredited (subject to ongoing audit) as being able to ensure there is no introduction of such identified pests.

MAF has already contracted AgriQuality (funded by industry) to develop the standard (based on hazard analysis) against which operator systems can be approved.

While all this is going on, MAF will be reviewing and developing the individual schedules for the importation of different types of grain. This will involve identifying the pests associated world wide with the movement of grain and ascertaining which of these are present in what potential supply countries.

As part of the process of this review, MAF will be undertaking risk analyses for the pests associated with grain and developing measures accordingly.

The review of the generic IHS schedule for Triticum (wheat) grain has been completed and it is currently being sent out for external consultation.

The industry consultation period ended yesterday, and - barring unforeseen problems - the wheat schedule should be approved in early next month.

Even though the onshore operator/facility/system aspect of the standard will not be completed, it should still be possible to import wheat form ¡§other¡¨ countries, albeit MAF intends to restrict this to flour processing in the metropolitan areas of entry ports only.

Other end use options will be considered by MAF following the development of the full standard.

MAF is also working on IHS schedules for maize, barley and oats.

Obviously, the decisions MAF makes could have considerable impact on you and your businesses.

MAF views consultation with stakeholders as extremely important, and officials there need to ensure all information is taken into account and implications understood by industry. They will communicate with you in various ways: directly with companies and industry groups, through MAF¡¦s magazine Biosecurity, and through automated email notification.

Communication is a two-way street. If there are things you are unhappy about ¡V or happy about ¡V let us know. If we don¡¦t know, we can¡¦t fix it.

This Government is committed to partnership with industry to improve the lives of our citizens.

Thank you for your time today, and I look forward to answering any questions you may have.

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