Meat Board Amendment Bill

Hon JIM ANDERTON (Minister of Agriculture) Link to this

I move, That the Meat Board Amendment Bill be now read a first time. At the appropriate time I intend to move that the bill be referred to the Primary Production Committee for consideration, and that the committee present its final report on or before 27 July.

The Meat Board Amendment Bill clarifies the provisions within the Meat Board Act 2004 regarding the allocation of access to meat export quota markets. The bill will uphold the original objectives of the Meat Board Act 2004. But, by removing potential ambiguity in the original drafting, the legislative framework will ensure that the Meat Board can continue its longstanding practice of allocating quota to producers of export-qualifying meat who are registered meat exporters, regardless of whether they currently export meat products.

The bill also clarifies the fee collection powers of the board. Once again, this is to remove a potential ambiguity, to make it clear that the board may charge fees to applicants for quota, whether or not they have exported meat. I wish to make it clear that the bill does not modify the original objectives or intent of the Meat Board Act 2004, or the policy of the Meat Board in regard to the allocation of meat quotas or the charging of fees. The sole aim of the bill is to remove potential ambiguity, and thereby improve business certainty for all market participants and for the Meat Board, which is the administrator of the meat quota allocation.

The bill, then, is technical in nature and limited in scope. In these circumstances, I anticipate—hopefully, anyway—that the committee’s consideration will be of shorter duration than usual.

Under the Meat Board Act 2004 the Meat Board allocates, monitors, and manages all tariff quotas for meat of New Zealand origin. These quota markets in the European Union and the United States enable New Zealand meat products to enter those markets on preferential terms, with low or zero tariffs. Our meat industries are very much dependent on export markets. Around 83 percent of lamb production and 87 percent of beef production is exported. Approximately half of all New Zealand’s meat exports go to the European Union and the United States tariff quota markets. I must say to the House that when I was speaking to the National Farmers Union in the UK recently, I found that farmers in Britain were a bit gobsmacked to hear those figures and find out how export-oriented our agricultural sector is.

Quota access is of significant value to the industry, obviously, and to the economy. The viability of New Zealand’s meat industry depends, to a significant extent, on sustainable access to these preferred markets. Since at least 1997 the Meat Board has allocated quota on the premise that meat industry participants who produce export-qualifying meat and hold an export registration certificate are eligible to receive quota—whether or not they are currently exporting meat products. Export registration certification is easy to obtain and does not limit the number or type of exporters. The amendment bill will reaffirm the Meat Board’s approach to quota allocation, which will ensure that the financial benefits associated with New Zealand’s preferential access to quota markets will potentially be widely available to industry members. That is the point of the original Act, which this amendment bill will clarify. It includes some 30,000 sheep, beef, and dairy farmers, as well as those involved in the meat-processing and exporting sectors of the meat industry.

Although the New Zealand public may not fully recognise the economic and social importance of our land-based industries, the Government—and I am sure many members of this House—see the primary sector as critical to both our economic and social well-being. New Zealand primary industries collectively provide two-thirds of our export goods. Primary industries therefore provide the foreign exchange to pay for imported goods and to maintain our living standards. Put simply, New Zealand’s social and economic well-being is dependent upon the success of our primary industries. There will be no First World health, education, environmental, or even infrastructural systems unless those sectors of industry are successful in New Zealand’s interests.

Over the last 15 years productivity growth in agriculture, forestry, and related industries has outperformed the rest of our economy. Again, that is a fact I do not think many New Zealanders fully appreciate. Although the New Zealand economy recorded relatively modest average productivity growth of around 1.3 percent during that period, our primary sectors averaged productivity growth of 2.8 percent, which is more than 100 percent of the national average. Other manufacturing industries achieved just 1.1 percent. Those are remarkably successful figures.

The meat industry makes a significant contribution to the New Zealand economy in terms of its contribution to the gross domestic product, employment, and export earnings. From 1986 to 2002 the contribution of agribusiness to New Zealand’s economic performance rose from 14.2 percent of GDP to 16.5 percent. So, rather than those industries being a set of sunset industries, they are in effect a set of sunrise industries that we should be very grateful to have on our books. In the year ended June 2005, $4.6 billion worth of meat products were exported, which accounted for around 15 percent of the total value of merchandised exports from New Zealand.

The New Zealand meat industry is a high-performing and very productive sector by international standards. It has continuously improved its productivity over the last few decades. The industry has also achieved significant product development over the last 30 years. In 1971, 90 percent of export lambs were sent overseas in carcass form; today it is less than 5 percent. Many of us will remember times when freezing chambers around New Zealand were full of frozen lamb carcasses, which were then rendered down for pet food or fertiliser.

The profitability of sheep and beef farms over the last 5 years has been very good. We need to build on those successes if we are to confront the challenges our economy faces. Some of those challenges, of course, are the need to harness our creativity, the need to join global networks and work together to maximise our potential, the need to be customer focused, and the need to adapt to the rapid changes of the global economy. To achieve those things we need a competitive domestic meat industry. By clarifying the quota allocation and fees provisions in the Act of 2004, we will promote business certainty in the meat industry, and thus maintain the meat industry’s substantial and positive contribution to the well-being of all New Zealanders. I commend the bill to the House.

Hon DAVID CARTER (National) Link to this

National will support the Meat Board Amendment Bill going to the Primary Production Committee. New Zealand’s access to the quota markets has been hard-earned by this country over decades, and it is of huge economic value to our economy. So we look forward to the submissions we will receive on this bill, and I, as chair of the select committee, look forward to bringing the bill back to the House in a position where it can then be passed into law.

The original Act to which we are moving the amendment is the Meat Board Act of 2004. I was told at a meeting last Monday of the need to make the amendment. I was contacted by the Minister’s office, and I was briefed in confidence about the issue. On this occasion, I thank the Minister very much for arranging the briefing. It gave us a chance to understand exactly what the bill was about. I also take this opportunity to say that there will be times when a Minister needs to brief members of Parliament who are not part of the Government in strict confidence, and I implore members of Parliament to always treat that confidence carefully. It would be a very difficult situation if members were to treat that confidence lightly—it would make it very difficult for a Minister to be in a position then of being able to brief a member of the Opposition on a matter. So I appreciate the Minister’s involving National in that briefing.

As I understand matters, the reason for this legislation relates to the possible ambiguity of the 2004 Act. At this stage I make no judgment at all about whether the Act as passed in 2004 is in fact ambiguous. Suffice it to say that I accept the advice given by the officials, through the Minister, that there is indeed an issue around that. The process now allows any party interested in the matter to make a submission to the select committee, and we will then consider the points of view raised.

I recall the issues quite well at the time of the 2004 consideration, when the select committee grappled with the issues of access to meat quota. If I recall the issues correctly, there were two significant issues that we needed to get our heads around as a select committee. One was a mechanism that did allow any new entrants to ultimately have some access to the quota markets. From my point of view on that select committee, I was keen to ensure that there was a process by which a new, innovative company establishing itself in the market here in New Zealand as a processor of meat suitable for any of the quota markets at least had an opportunity to ultimately get access to those markets. I cannot see any legitimate argument for the quota markets to be closed off on some historical basis and restricted to those people who had previously been there. If that was to happen, the only thing we would successfully do from a “New Zealand Incorporated” point of view is stifle the necessary innovation still required in the meat industry.

The second issue that I recall we grappled with at the select committee was an issue whereby if any particular participant had access to the quota market and it looked as though, towards the end of any particular season, the participant had not used that market to the fullest extent possible, then there had to be a mechanism by which quota could be traded between the players. I fully accept that argument again, on the basis that at the end of the day this Parliament should be concerned about the way that “New Zealand Incorporated” can maximise the benefits of those quotas. So in my mind there clearly needed to be a mechanism to allow an end-of-season adjustment between the players involved in the quota markets.

I have no doubt that when this bill is before the select committee, all the parties who have an interest in access to quota markets will be given a chance to come and air those issues again. As the chair of that select committee, I am sure that I speak for the other members of the select committee, many of whom were not sitting on it at the time of the 2004 election, when I say that all members of the select committee, who do work well together, will have the opportunity to revisit this matter via the submission process. I am sure that all the arguments presented by submissioners to the select committee will be discussed and well and truly examined in the select committee process.

I note that the Minister has given us a 27 July deadline and then asked that we, hopefully, progress this matter quicker than that. I can almost guarantee that we will be able to do that. The select committee workload at this stage is not very busy. In fact, at the select committee today, I took the opportunity to try to bring more work before the committee. I was taken by the comments of the Associate Minister for Economic Development, the Hon Dover Samuels, when he publicly raised the issue of the lack of progress in aquaculture. He said he was quite happy to work with members of the select committee to see whether we could assist the Government out of a bind that it has obviously got into, whereby past legislation has absolutely gazumped further development in aquaculture.

I put it to the select committee today that maybe the Hon Dover Samuels was indeed a man of his word and would be prepared to work with us to see whether there was a way to fill in some of the spare time we have on the select committee, initiate an inquiry, and assist the Government. I was absolutely staggered, I must say, when the Hon Dover Samuels then voted against us initiating that select committee inquiry. I guess, from the point of view of the Hon Jim Anderton, that does just clear the desk and give us plenty of time to look at these issues and call for submissions. Hopefully I can get this bill back into the House as quickly as possible—and substantially before the 27 July deadline.

I look forward to working through the issues on the select committee, which now includes as a member Colin King, member of Parliament for Kaikoura. On looking through the notes we have, I realise that it had previously slipped my mind that he was a director of Meat and Wool New Zealand and therefore a director of the New Zealand Meat Board, which examined these quota issues, right up until his recent resignation. So, among the many experts we have around our select committee, we will have Colin King, member of Parliament, with an absolutely intimate knowledge of the discussions that have occurred within Meat and Wool New Zealand and within the New Zealand Meat Board about the way the legislation has been working. In fact, from the point of view of a former director of Meat and Wool New Zealand, we will know whether the board itself had any concerns or whether the officials, and, thereby, the Minister, are the ones with the concerns.

Dr ASHRAF CHOUDHARY (Labour) Link to this

I will take a brief call in support of the bill.

SHANE ARDERN (National—Taranaki-King Country) Link to this

I also rise in support of this bill going to the Primary Production Committee. It is important that that important select committee—the most powerful committee in Parliament, I would suggest—look at the bill. But the question that remains, of course, is this: how come, so soon after the legislation was passed in the first place, we are back considering these amendments? I guess that in the fullness of time the officials may be able to explain that, but what I think it demonstrates—and the Minister certainly touched on it in his opening comments—is that things are not always as black and white as some of our officials and some members of Parliament might think. So I say to the select committee, of which I am not a member—I was at one stage, but not at the moment—that it should make sure that it goes through the detail with a fine-tooth comb so that we are not back here having to amend it again.

It is important that Meat and Wool New Zealand—the Meat Board, as has been referred to in the bill—has the ability to manage the quota. The reason for that is that we have markets overseas that have taken years to build up. The Minister of Agriculture noted in his comments how important those markets are to the social and economic well-being of New Zealand. I agree with him entirely, and I thank him for his comments. In fact, I was heartened to hear them from the new Minister. The Minister was, of course, in the Lange Government for a little while—the very Government that said this was a sunset industry and the sooner 8,000 farmers walked off the land, the better. So I was heartened to hear the Minister say—and it is obvious to anybody who spends more than 30 seconds studying these industries—how important they are to New Zealand.

As the Minister said, 87 percent of beef is exported, as is 88 percent of lamb. That makes New Zealand unique. Nowhere else in the world would one find an economic producer of protein-based, land-based products where the export content of what is produced is as high as that. In fact, in most cases the exact opposite is the case. Mostly one finds that 80 percent, 90 percent, or up to 95 percent of what is produced in a country is consumed in that country, whereas New Zealand has to go out into the world, compete against huge multinationals, and succeed. So I thank the Minister for the initiative of making sure that the quota management system is handled well.

Not too many New Zealanders actually know what such industries do and what this industry is about. The New Zealand Meat Board—operational name, Meat New Zealand—exists to further the interests of New Zealand’s 32,000 meat producers. I got these figures from the parliamentary Bills Digest, but I suspect that the figure of 32,000 is too light. I suspect that it is bringing meat producers down to trade names rather than individual farmers or producers. I suspect that the figure is too light, but I am able to be challenged on it. I know that there are 70,000-odd farmers in New Zealand, and I also know that the dairy industry, which one would not consider to be linked with this, is 40 percent of the meat industry. So it is a meat producer even though its main income would be registered as being dairy-product producers. So I challenge that figure. I have no facts or basis on which to challenge it, I just suspect that it is wrong.

The board is there to manage the interests of those producers, and it is funded through a levy on stock slaughter. Its main purpose is to develop and enhance market access. That is its main purpose. I have to say, having just attended a recent meeting with a large number of my colleagues—in fact, I think 32 National caucus members attended the meeting, which was a very good meeting—I was heartened to see just how strong the leadership in that industry is and where it is going.

R DOUG WOOLERTON (NZ First) Link to this

New Zealand First supports the Meat Board Amendment Bill because we believe in exports and we believe in making right everything that will assist our farmers to export to foreign countries where every single barrier—both tariff and non-tariff—that can be put up against our exports is put up. We must make sure that we have the legislation right to enable our people to go about their business, because there are men and women who work their butts off around the world, on our behalf, to make sure we gain entry into these countries. It is all very well to be talking about getting the beef off the farm and about what should happen with shipping, and all of that sort of thing, but unless we can make the regulations work that enable us to enter these countries on favourable terms we are fighting against the weather, as we say in farming. It just will not happen. I was going to use another colloquial term, but I thought I had better not.

I think it is also right to remember, as this legislation is passed through the select committee, that this industry is constantly changing. As previous speakers have said, the industry has gone from being a commodity industry—mainly carcasses shipped overseas—to being an industry dealing in all sorts of finer meats, packaged meats, fancy cuts, etc. I am absolutely positive that the select committee, even without my presence, will make a good job of this. I am alarmed to hear that only Labour and National are represented on it, but nevertheless I am sure that under David Carter’s able chairmanship this bill will be progressed quickly.

I personally do not think it will be quite as easy as one would imagine it should be. I think that this will be, shall we say, an unexpected chance for people who did not think they were heard properly the first time to come along and have a second bite of the cherry. I am sure the experienced members of the committee realise that. When we take meat into another country, or any produce into a quota market in another country, that is seen as a privilege enjoyed by members of meat-processing industries, and so on. There are always new entrants to the processing industry—and Mr Carter referred to this earlier—who want to push the barriers. They say we should be able to export without going through this bureaucratic nonsense, without going through the Meat Board, and without having to rely on these sorts of regulations.

It is very difficult but necessary to keep those people in some sort of order and to say: “Hang on, sunshine, first these criteria must be met, then we will look at your applications.” Again, as the Hon David Carter said, one does not want to stifle enterprise, but that has to be balanced against—excuse the language—stuffing up the markets that have been put in place by previous generations.

There is also a change down on the farm in this industry, led from the markets, to have what we can call “from the pasture to the plate” tracking. Great sophistication is entering the farming and production chain in the way of tagging and electronic tagging in order to follow one single beast from a farm, right through to the supermarket counter and on to the plate. I commend the industry for that, because it is a huge undertaking. I must just say, being a little bit controversial, that that is one reason why I cannot understand the outrage of farmers towards the so-called chipping of dogs. In every other part of their industry, the chipping or electronic tracking of animals is right at the forefront of what the market is wanting. It wants those animals tracked from the paddock to the plate, so it is rather naive and quite unbelievable for farmers to say that there will be a big industry built around tracking dogs. That is nonsense, because the whole industry is involved in that process as we speak, and the chipping of dogs will be seen as just another addendum to that as time goes on.

As mentioned by Shane Ardern, this is a huge industry, and it is one that we in New Zealand First take a great deal of interest in. If we are looking to address our balance of payments problem in this country—brought about by too much consumption and not enough exporting—industries like this are the only places we can look to for the sort of bulk money that we need to address those balance of payments deficits.

Everybody knows that a small percentage increase in a big industry will be what produces the dollars, rather than rushing around looking for the silver bullet, as in the new industries that have years and years of start-up time and are simply incapable of doing the job. So it is the land-based industries that will help this country with its balance of payments deficit, it is the land-based industries that sustain our standard of living, and it is those that we must protect.

I do not have much time, like many farmers—or, in my case, ex-farmers—for ticket clippers. Mr Ardern mentioned those. We see far too often people who are to one side commenting and involving themselves in discussions on this industry. They are not directly involved in the industry, they do not take the risks, and they do not put up the money, but they have all sorts of ideas about how these things should work. In my experience they are very big on talking about getting a share of the industry. They always want to get their foot in the door. They always want to take a percentage of the profit without taking a percentage of the risk. It is bills such as this that are designed, not necessarily to keep those people right outside of the door, but certainly to make sure that they serve their time before they come in the door. We certainly understand that aspect of the industry.

I just close by commending the Minister of Agriculture, Jim Anderton. Like Shane Ardern and the Hon David Carter, I well remember when perhaps the Minister was on the other side of the fence from where he is now. I commend him on a speech he made in England—I think it was in Birmingham. I do not know how many farmers there are in Birmingham, but that is where the conference was held. He made the point that within a few hundred kilometres of that conference centre were something like 80 percent of the serious customers of the British market who ate that sort of produce. In our case, we are many, many thousands of kilometres away, yet we are still able to compete with them, unsubsidised, by the good efforts of our mum and dad farmers who have been spoken about before. I commend those people. New Zealand First supports this bill. It is essential that it be passed.

TE URUROA FLAVELL (Māori Party—Waiariki) Link to this

Hopefully, it is no secret to those of us gathered in the House today that Māori tangata whenua have earned their livelihoods through the spilling of blood on abattoir floors throughout the country over many years. Indeed, my first holiday job was at Gear Meat Processing at Pētone, feeding the chain and picking up mountain oysters. Minister Horomia would no doubt confirm that they are delicacies in his area of Tolaga Bay on the East Coast. My honourable colleague from the north, Mr Harawira, also did his training in the freezers and on the gut floor of the now-closed Moerewa freezing works. He considered himself at that time not a freezing worker but a meat processor, and now, of course, he is a parliamentarian. Our co-leader, Dr Pita Sharples, prepared the sheep for slaughter. He was in the shearing gangs that produced fodder for the works. Our other co-leader, as this House will well know, was an amateur vet. She was involved in the artificial insemination of her dairy herd, the bobby calves of which ended up in the meat-processing industry.

So, for the record, the Māori Party has 100 percent involvement in the meat, sheep, and dairy industries. Almost 32,000 are employed in meat processing and manufacturing, many of them tangata whenua. What I am saying should not in any way diminish the contributions of other people—the farmers and former meatworkers who are also present in the House. I mihi to them all. Tēnā koutou.

The industry operates major plants in Dargaville, Karaka, Waitoa, Paeroa, Te Kauwhata, Tīrau, Te Puke, Horotiu, Te Kūiti, Taumarunui, Waitōtara, Waipukurau, Takapau, Ōringi, and other locations—locations, where, coincidentally, there is a Māori workforce to support the kāpata kai, the food cupboard, of Europe. Of course, there are all the other locations where meatworks have been closed. They exist no longer, and we must never forget the impact of the devastation of the closure of the meatworks, such as Tōmoana and Whakatū, in which hundreds of families felt the impact of poverty, unemployment, and alienation.

Meat industry products account for about 17 percent of New Zealand merchandise, I am told. The figures are astounding, really. Between 1998 and 1999, 91 percent of lamb, 83 percent of beef, and 79 percent of mutton were exported overseas. In real money terms, as I understand it, New Zealand exports more than $4 billion of beef, sheepmeat, and goat meat, with 65 percent of it going into quota markets that rely on country-specific tariff quotas.

This bill is another example of legislation being posited as standing as a model for Aotearoa meeting its international treaty obligations relating to quota markets. The question must be again asked in this Chamber about how the Meat Board Amendment Bill honours the obligations the Crown has to Te Tiriti o Waitangi. This House should be aware that both the courts and the Waitangi Tribunal have determined that the principle of partnership includes the obligation on both parties to act reasonably, honourably, and in good faith. Indeed, the courts have also found that an aspect of the obligation to act in good faith is the duty to make informed decisions through consultation. The Waitangi Tribunal has emphasised the value and appropriateness of consultation in upholding and strengthening the Treaty partnership.

Yet what do we have here? Māori meatworkers we have contacted in the very recent past—in fact, this morning and yesterday—about this bill have absolutely no idea that it is even on the Table. But it gets worse. It seems that the bill, which the Minister is promoting as “optimising positive economic outcomes in the domestic market”, has not even been passed through the hands and by the eyes of stakeholders in the industry. Meat Industry Association of New Zealand policy adviser Dave Harrison said that the bill had taken the organisation by surprise. The media reports him as commenting: “ ‘The bill’s been a bolt out of the blue for us … It was done without consultation—we haven’t had a chance to form a view on it.’ ” So the Māori Party has to ask whether this is another case of policy change by stealth.

Although we were told that access to quota markets will be kept open to all registered meat exporters, regardless of one’s previous export history, the question has to be asked as to why the Meat Industry Association did not know about something of such fundamental importance to its core business. More important, why did Māori meat producers not know about this change? Māori produce 15 percent of New Zealand’s total meat, for goodness’ sake! Multiple-owned Māori incorporations also tend to be among the country’s biggest farms in stock-number terms. Collectively, Māori are the largest natural grouping of pastoral farmers in New Zealand—farming an effective area of 720,000 hectares, and growing. Some impressive initiatives have also been pioneered by Māori in the meat industry. We recall a group of Māori entrepreneurs who bought a third of the shares in the Richmond meat plant from the Meat Board. They subsequently sold two-thirds of their stake to Dunedin-based PPCS.

Māori meatworkers have traditionally formed part of the backbone of the meat industry itself. They are men who, because of the conditions they worked under, aged before their time. However, within the industry itself, important steps have been made to demonstrate consultation with tangata whenua, and I make particular mention of the Federation of Māori Authorities, which almost a decade ago lobbied for, and won, legislative changes laying down voting procedures for the Meat Board and the Wool Board in order to encourage greater Māori participation in those two industries. The one farm, one vote system was changed to a system based on production that recognises the greater size and productivity of Māori incorporations. The Federation of Māori Authorities says that this new system has generated greater Māori participation, in the sense that more people are registering, voting, and attending board meetings.

This determination by the industry is a very positive move that we would like to see replicated in the Meat Board. We recognise the contribution that Māori professionals such as Wayne Walden and Gina Rudland had in their membership of the Meat Board.

The bill amends the 2004 Act to clarify that the Meat Board may allocate access to quota markets to meet industry participants who hold an export registration certificate, whether or not they currently export meat products. I want to raise here the possibility that an opportunity could exist if Māori meat producers take advantage of it to form an entity to enable them to enter the meat export market. Is this an opportunity for indigenous marketing in relationships with countries such as Bolivia, Colombia, and Venezuela? It seems slightly ironic that while, as I understand it, AgResearch is currently right in the middle of a 12-stop tour of the North Island to encourage Māori dairy, meat, and wool farms to realise their potential and increase productivity, here today we have a timely and significant opportunity to do exactly that. One wonders whether AgResearch is talking to the Minister.

The whistle-stop tour is aimed at doubling Māori farm productivity from its current $800 million to $1.6 billion by the year 2020. We are not happy that yet again a significant piece of legislation is being processed on the shop floor, as it were, without the robust consultation that we suggest is desirable for any policy change.

We will, however, support this bill through to the select committee to enable the Meat Industry Association, meatworkers, the Federation of Māori Authorities, Māori meat producers, AgResearch, and other key players to have a say about how to strengthen the historical backbone of our primary industries.

GORDON COPELAND (United Future) Link to this

I rise to take a call on the first reading of the Meat Board Amendment Bill and immediately signal that United Future will be supporting this bill—I expect not just through the first reading but all the way until it becomes the law of the land. As I mentioned in my general debate speech yesterday, my own involvement in the industry—peripherally it must be admitted—was in the early-1980s. It was not just in the restructuring of the meat industry but in its total reformation.

Shane Ardern mentioned it was a 19th century industry. I tell him that it was actually a colonial industry. About the only thing that New Zealanders owned in the meat industry was the meat itself. The meat was grown here, processed mainly in British-owned freezing works, shipped on British-owned ships across to the other side of the world, went through British-owned wholesale markets, then sold through British-owned retail markets.

COLIN KING (National—Kaikoura) Link to this

I rise in support of this bill. I would imagine that in the first instance many in the House might consider that I rise to declare of a conflict of interest. However, when I was elected to this position as the member for Kaikoura I resigned my position on the Meat Board, and therefore congratulate my successor in the northern South Island ward, Andrew Fox, a farmer from Scargill. He will do a wonderful job and he will have some interesting challenges ahead of him, having been a serving director of PPCS.

Given that we are talking about the Meat Board Amendment Bill, I point out that at this particular time farmers are probably more interested in how the ram is joining with the ewes and what sort of lambing percentage they will have, and they are still smarting over the fact that the Government decided there would be a microchipping process for all working dogs. Interestingly, for 5 years now where I come from, in Marlborough, the council has been running two categories of dogs. It has a category for working dogs, numbering 2,500, and it has a category for non-working dogs, numbering 6,500. To register a working dog costs $15 and to register a non-working dog costs $45, representing the number of times the dog pound has been used by non-working dogs. There were 192 occasions in the last 12 months, none of which were working dogs.

I will get back to the Meat Board Amendment Bill. It is technical in the sense that the word “ambiguity” has been used. I would prefer to use the word “clarify” to reinforce the express purpose.When we talk about these details it has to be borne in mind that there is a huge history behind this quota management mechanism. A lot of it started as far back as 1882—when Mount Tarawera was blowing up—with the first shipment out of Port Chalmers of frozen meat. What grew out of that was a relationship that connected New Zealand to England, because we were able to supply frozen meat, which was very innovative at the time, on the shoulders of, and out of season to, the lamb crop and meat crop over in the UK in the northern hemisphere. That being the case, we built up a market because, in fact, we were complementing the existing home market by being able to supply lamb all year round. So that started way back in 1882. It was actually a wonderful thing for the sheep industry, because up until that stage it was purely reliant on wool and rendering down the tallow of sheep. That shipment going out of Port Chalmers was a marked leap forward for the economy of this country.

The Meat Board does not have all that long a history, but it has quite a chequered history in the sense that at one stage, about 1985, it marketed, in a single-desk manner, everything to do with meat in New Zealand. It was an abysmal failure, and we have heard from other speakers today that the industry itself was controlled from England and there was no New Zealand ownership. Even what New Zealand ownership eventuated in the early stages was particularly shaky. We think of the Waitaki situation that occurred post-1985, and how the farmers had to put their hands back in their pockets again to put together models and structures of companies that would serve their interests best. They succeeded hugely, especially in the South Island, where they put together cooperatives in which farmers are shareholders and are able to capture value back to themselves. So successful have been the South Island cooperatives that when we look around today, we see that one meat company, PPCS, owns 52 percent of the meat industry. It has paid for that with shareholders’ money and it is doing remarkably well. It is still capturing value back to itself. It was interesting that the Māori Party speaker talked about the business that was done by a group of Māori in taking over 16 percent of Richmond shares and selling them on to PPCS. I would say that that was the winning of the battle for control of Richmond by PPCS. So that is just of historical interest.

Moving forward, I just want to draw members’ attention to the Bills Digest that we were given. It concerns me a little bit that when we look under the heading “New Zealand Meat Board” in the “Background” section, we see that it talks about participants in the meat export industry—as my learned friend Shane Ardern refers to, 32,000 meat producers. Well, that is pretty comfortable. I have to take exception, though, with the mechanism that it states the Meat Board is actually funded by. It states that the board is funded by a levy on stock numbers slaughtered. In broad terms one could just about let that pass, but it is not factually correct. The management of the quotas—the quota allocation system—is paid for by those participants who actually operate and move that meat over to the European or US markets. So I would like to see that corrected. I am sure the Meat Board would be horrified to think that it is still spending farmers’ money in managing the quota, and I am sure that Federated Farmers’ Meat and Fibre Producers’ Council Chairman, Ian Corney, would be surprised to see that the Bills Digest actually says that, when in actual fact he has been beavering away over the last 2 years to ensure that the meat companies actually pay their share in administering that quota. So let us just bear that in mind and look for some correction.

I will mention two very important dates. In 1997 there was the move to put some controls, management, and accountabilities back on the Meat Board so, in fact, there was more attention given to what farmers’ and the industry’s expectations were. At that particular time the board was reinforced; it stopped being a producer board and actually became an industry board. That is when we got meat industry directors around the table. I believe that that was a very smart move, because unless the industry is running in tandem with the producers there is no way to ever be sure that the best value is effectively being captured for the product in the quota market, to be brought back to this country. So that has been very good.

Where are we today? Well, the 2004 Meat Board Act has been enacted, and we are back here again to clarify some of the details. Anything that comes out of this process will not be changing anything because it is not broken. The process that has been run does have a new-entrance allocation situation. It has very, very strict criteria for new entrance. My advice for people going into the meat industry is that instead of trying to get a minute or minuscule part of the quota, they should get their mates together, put their hands in their pockets, flesh out the millions of dollars, and buy an existing business, because to actually gain significantly out of the new-entrance allocation is very hard—although in saying that I have to pay tribute to a particular individual inside the Meat Board who is about to retire, Graeme Harrison. He put together and built up a remarkable organisation that is now called Anzco Foods Group. He benefited, to use his own words, greatly from the assistance of the new-entrance allocation aspect of it.

I do not find that we will have too many difficulties working with this process. I welcome it, as did the Meat Board itself when it heard that this bill had come before the House. I believe it took the board by surprise, as well. A point we want to bear in mind is that the Crown owns the quota. Companies do not own the quota. A unique aspect of our quota into the European Union—there are 1,200 quotas into the European Union—is that we manage them within New Zealand, and on that basis we are able to capture the quota rent back to the New Zealand farmer, industry, and nation as a whole. Studies done at Lincoln University have established that the value of that quota is in the region of some $300 million annually. So it is very important that, whatever we do, we do it in a very level-handed manner and welcome people’s opinions.

I am perfectly relaxed to see what does come out as a result of the process of this bill going to the Primary Production Committee. Having been a shearer and the son of a meatworker, I am truly honoured to be on the Primary Production Committee, and I am grateful for this opportunity to speak in support of the Meat Board Amendment Bill.

Hon LIANNE DALZIEL (Minister of Commerce) Link to this

I move, That the Meat Board Amendment Bill be referred to the Primary Production Committee referred to Primary Production Committee