6. JO GOODHEW (National—Rangitata) Link to this
to the Minister of Agriculture
What reports has he recently received on the state of New Zealand’s primary sector?
Hon DAVID CARTER (Minister of Agriculture) Link to this
This week the Ministry of Agriculture and Forestry launched its annual publication Situation and Outlook for New Zealand Agriculture and Forestry. The comprehensive report looks at issues facing the primary sector currently, and forecasts performance over the coming 5 years. It reinforces the absolute economic importance of our farmers, foresters, and growers, and the fact that our primary sector has ridden out the global recession remarkably well. I commend the report to the House.
What are the key findings of the 2009 Situation and Outlook for New Zealand Agriculture and Forestry report, and what outlook does it present for the primary sector?
The report essentially tells two stories. The first is that the global recession has had a challenging impact on the sector, with profitability falling some 62 percent since last year. However, the other, and much more positive, story is that the outlook for farming and forestry is bright, with sectors forecasting steady increases in return over coming years. Thanks to the ever-growing demand for food, our primary sector will play a key part in New Zealand’s export-led recovery.
Hon Jim AndertonHas the Minister seen a report from Federated Farmers stating that the results of its inaugural farm confidence survey “make for ugly reading and illustrates that the recession’s full bite is yet to come,” and that “farmers remain deeply pessimistic about the state of the general economy and their own prospects for the next 12 months.”, and does the Minister believe that farmers know more or less about their own business than Treasury or the Ministry of Agriculture and Forestry?
I have seen that report and I make two points. First of all, the survey was an email survey sent out to 2,000 farmers, of whom around 270 responded. I suspect that the fact that those people chose to respond may be a bit lopsided towards pessimism. The second point I make is that the situation facing many farmers, particularly dairy farmers, with the payout moving from $7.90 2 years ago to an indicative $4.55, will obviously bring some pessimism to the sector. However, the Situation and Outlook for New Zealand Agriculture and Forestry report, which I am talking about, looks at the primary sector over the next 5 years.
What message does the report send to the primary sector on the importance of a strong focus on innovation?
The Situation and Outlook for New Zealand Agriculture and Forestry report makes it clear that if our primary producers want to continue to improve profitability and to take advantage of new trends, they need to concentrate on innovation and productivity gains. That is why this Government established the Primary Growth Partnership, which will see $140 million a year being invested in primary sector innovation. We support the sector in making sure that it continues to be the economic engine room of New Zealand.
Hon Damien O’Connor Link to this
Given the statement in the report that “Effective biosecurity is an important element in ensuring the sustainability of all of our forestry environments. The New Zealand forest estate faces a potential threat from invasive forest pests.”, and a statement in the recent Ministry of Agriculture and Forestry meat industry report that identified that most survey respondents thought New Zealand would probably have a significant biosecurity incursion in the next 10 to 15 years, why did the Minister allow the Minister of Finance to cut 60 front-line, skilled jobs and $1.9 million from the biosecurity budget?
As I explained patiently to the member last week, we risk invasive pests at all times. That is why it is critical that we focus our biosecurity resources very, very carefully. As the member knows, or should know, there has been a significant downturn in trade at the borders. Because it is cost recovered, it would be irresponsible of us not to adjust accordingly and thereby save other importers that continue to face that concern. I point out to that member, as he was told at the select committee, that biosecurity baselines actually increased in the Budget and were not decreased, as he attempts to mislead particularly rural media.
If the outlook for the forestry sector is so positive over the next 5 years, why has Winstone Pulp International Ltd just announced a closure of its Gisborne factory, with the loss of 65 jobs, saying that the international pricing position and the state of the New Zealand dollar make it impossible for its business to remain viable?
Three issues face the forestry sector in the short term: the current log price; the exchange rate; and, to be fair to the sector, the uncertainty around any emissions trading scheme. That is why I am determined to bring forward an emissions trading scheme, in cooperation with my ministerial colleagues, that will give some certainty to the sector. As the Situation and Outlook for New Zealand Agriculture and Forestry report points out, over time there is good reason to be confident about the forestry sector. That member, as a former Minister, would do better than to bag the sector at every occasion.