Nathan Guy

5 AUGUST, 2015

Speech to Pipfruit NZ Annual Conference

It’s an exciting time for your industry which is having a really strong year. Let me give you a few highlights worth mentioning:

• Apple & Pear export revenue exceeded $570 million last year.
• Fruit exports are worth $2 billion
• Horticulture exports are now worth just over $4 billion, and have grown 17 percent growth over three years.

Overall, I believe your industry’s success doesn’t get the coverage or kudos it deserves.

The New Zealand Pipfruit industry is world leading. It produces the safest and tastiest fruit for the world’s most discerning customers.

Improved productivity, new varieties, and innovation are driving your success.

Traditional apple varieties like Braeburn are being replaced with newly developed varieties such as Envy, Rockit, HoneyCrisp, SweeTango, Kanzi, and Koru.

Last week I was at the Horticulture New Zealand conference where we gave the industry’s premier award - the Bledisloe Cup - to John Wilton, recognising his outstanding career in the pipfruit industry.

The future looks bright too with the growth of Asia right on our doorstep. Currently the Asian market continues to expand, taking 33 percent of apple and pear exports in 2014 compared with 15 percent in 2006.

The Pipfruit industry has made a commitment to becoming a billion dollar industry by 2022. It’s great to see your industry setting an ambitious goal and fits in well with our goal as a Government to double the value of primary sector exports by 2025.

Trade

Increased trade access is going to be a big part of that goal.

According to Horticulture New Zealand, export growers pay an average of around $38,000 each year in tariffs to other countries.

You may be disappointed that we couldn’t reach agreement on the Trans-Pacific Partnership (TPP) negotiations over the weekend, because your industry is keen for improved access into foreign markets.

The TPP offers huge opportunities for our exporters, with roughly half of all international trade flowing through the Asia-Pacific region.

Trade minister Tim Groser is still very hopeful that we will reach an agreement that is in the best interests of New Zealand, and Trade Ministers have agreed to meet again as soon as possible to finalise the deal.

New Zealand already has preferential access for Pipfruit into a number of our top export markets, and with the conclusion of TPP, we could also see this for Japan and the US, opening up greater access to the first and fourth largest economies in the world..

A good recent success story is the FTA with Korea which reduces tariffs that New Zealand growers and exporters face in this highly competitive horticulture market, especially for kiwifruit, buttercup squash, apple juice and cherries. Kiwifruit and buttercup squash exports to Korea alone account for around $55 million

The agreement signed with Chinese Taipei (Taiwan) is another success story, as tariffs on apples and cherries were eliminated overnight on 1 December 2013.

Research and Innovation

We all know that growing our exports can’t come through just increasing volume. We need to keep innovating and adding value to what we produce.

As a Government we fund around $300 million a year into research and development in the primary sector.

In the 13 years since it began, over $5 million of Sustainable Farming Fund (SFF) funding has been committed to Pipfruit projects.

Government is also co-funding, through MBIE, the national apple and pear breeding programme (PreVar) valued at around $22 million up to 2017.

Pipfruit NZ will also receive $4.35 million over seven years for the ‘Apple Futures II’ Partnership from the Government. The aim is better market access for apples to high-value Asian markets by developing new knowledge of pest and pathogen infestation and nil-detectable residue solutions.

The PGP remains our flagship programme for the primary sector with Government and industry co-investing $720 million into 20 programmes, with 17 currently underway.

There is only one horticultural PGP programme at the moment, NZ Avocados Go Global. This means there is enormous opportunity for the Pipfruit sector to undertake a PGP programme with MPI.

MPI encourages anyone working in our primary industries to get in touch with them if they have good, workable ideas that will address a specific industry challenge or opportunity. They’re also keen to hear from people if PGP investment will achieve greater benefits within shorter timeframes, than would have otherwise been possible.

Skills in the industry

Another big challenge your industry faces, like much of the primary sector, is attracting and retaining enough workers.

In the next 10 years MPI predicts the horticulture workforce will need to increase by
8 percent, or around 10,000.

Increasingly skilled labour is going to be required across the whole value chain—from production, to processing, and to marketing. Special skills will be required in areas like food safety, biosecurity, environmental management, and plant science.

Both Government and industry are acutely aware of this challenge. We know that we need a reliable supply of both seasonal and skilled labour from which the next generation of leaders can be developed.

This is why, amongst other projects, MPI is working with the industry and schools to raise the profile of the primary industries amongst young New Zealanders.

We are working to ensure there are strong curriculum and career resources for schools.

We are supporting the EPIC High School Challenge to increase awareness of the primary sector and influence subject choices for Year 10 students.

MPI is running three pilot programmes linking Principals with industry opportunities. These are happening in Ashburton, Picton and Kerikeri, with the Kerikeri pilot involving horticulture.

MPI started a new Ambassadors programme late last year which gets industry leaders into schools talking to young people about their careers and the possibilities out there.

One sensible solution to assist growers is the Recognised Seasonal Employer work policy, which has been a real success. As a former Minister of Immigration I think this has been a win-win policy, and last year we increased the cap from 8000 to 9000.

The contribution RSE makes to New Zealand’s relationships with our Pacific Island neighbours, and the positive impacts it has for those communities is significant. It is now a part of the New Zealand brand and reputation.

A few weeks ago the Government also announced changes to immigration policy settings, giving more priority to skilled migrants with jobs outside Auckland. This will further encourage the supply of labour to the regions.

Biosecurity moves

Of course, we are never going to achieve our ambitious goals without protecting our borders from pests and diseases. This is why biosecurity has been my number one priority since I became Minister.

In Budget 2015 I was proud to announce $27m in new funding for biosecurity, which will fund more dogs, x-ray machines and border staff.

Our biosecurity system is facing increasing pressures due to growing international trade, greater mobility of people and increasingly complex global supply chains. To give just one example – air passengers have increased by 18% since 2009, and this growth is expected to continue.

That’s why the Government has decided to bring in a committed border levy as a fairer way to fund these services. This will ensure that as future passenger volumes grow by 3-4 % per year, funding continues to increase to match this. It also means that foreign travellers who make up around 55% of passenger numbers will be directly contributing.

We have already beefed up the border over last two years with 130 new staff, new x-ray machines, and increased the number of detector dog teams. We’ve also brought in Government Industry Agreements (GIAs) which will involve shared preparation and response to biosecurity threats.

Today I’m pleased to announce to your conference further biosecurity measures that MPI will be implementing, in response to increased passenger numbers and the heightened threat of Queensland fruit fly.

Expected to be in place by December for the busy summer season, there will be:

• 20 new biosecurity detector dog teams.
• Five new x-ray machines.
• Trialling a mobile x-ray machine that can shifted to different sites.
• Introducing new communications to target passengers more likely to carry Queensland fruit fly host materials.

I want to stress that we already have 100% screening of all passengers by biosecurity officers. Since the Queensland Fruit Fly incursion earlier this year in Auckland, we now have 100% screening of all incoming international passengers by detector dogs at peak times, which we know are the most effective tool at finding any fruit fly host material.

MPI is also planning to use detector dogs to screen passengers much earlier in the arrival process for international passengers – as close as possible to where they leave the aircraft. This will give us more opportunity to detect risk goods, particularly within hand-held baggage, where passengers often carry fruit and other food.

Biosecurity 2025 and GIA

It’s also important we take a longer term look at biosecurity. Earlier this year I announced Biosecurity 2025, a major review project to update and replace the founding document of New Zealand’s biosecurity system, the 2003 Biosecurity Strategy.

The review will provide a clear direction for the biosecurity system and identify any changes or improvements needed over the next ten years. It will be led by MPI and overseen by an independent panel of three peer reviewers. Submissions have closed and there has been plenty of good feedback received.

The final output will be a Direction Statement, which I intend to have completed before the end of the year.

I am grateful for the input that Pipfruit NZ has already provided to MPI officials, and I encourage you to get involved when the draft Direction Statement is made available for public consultation later this year.

I’m very pleased that since I spoke to your conference last year, Pipfruit New Zealand has become an official signatory to the Government-Industry Agreement deed.

The GIA is based on the idea that Government and industry can work together on biosecurity readiness and response, bringing both resources and expertise to the table. As part of this, Allan Pollard has represented the Pipfruit Sector in recent responses.

On that note, we are confident we will eradicate the localised population of fruit fly. We moved quickly and effectively to respond to the threat and no new adult fruit flies have been detected since early March.

The response is a team effort and highlights the value of GIA. Pipfruit NZ and Kiwifruit Vine Health have been closely involved in the decision making and response, and we have valued their input.

Pipfruit NZ has also been very active in negotiating an Operational Agreement to address the threat fruit fly poses to New Zealand. Operational Agreements are the formal agreements that sit underneath the GIA Deed where we agree who will be doing what, and what costs will be shared amongst the signatories.

This agreement is in the final stages of being completed and details of what has been agreed in principal will be announced in the near future.

Conclusion

So as you can tell, there is a lot happening in my portfolio and a lot that directly impacts on your industry.

I’m pleased to have a good working relationship with Pipfruit New Zealand because we have a lot of challenges and opportunities ahead of us.

Attracting workers, investing in innovation, opening up new markets and protecting our borders – these are all areas where industry and Government need to communicate well and work together.

Thanks again for the opportunity to say a few words, and all the best for the rest of your conference.

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