Thursday, July 7, 2022

Minister takes positive view

Nathan Guy put a dampener on things at his first meeting with farmers as Minister for Primary Industries. Or rather, he was given the credit for it when rain rolled into Hawke’s Bay and Gisborne on February 5. “The rain should help to recharge some farm dams and waterways and this could take the pressure off irrigation bans in some parts of the country,” Federated Farmers president Bruce Wills said. It also seems that inviting what he described as ‘our’ Minister was Federated Farmers version of a rain dance, as it happened before with former minister Jim Anderton.

“Any minister who brings the ‘weather with you’ is welcome.”

When it came down to business that day, Guy was briefed on the transformational Ruataniwha water storage project. Wills described this as arguably Hawke’s Bay’s major climate adaptation tool.  

“It is one that could lift farm output here by $160 million each year creating 632 new full-time equivalent jobs.”  

Ruataniwha is just one project out of around 11 nationwide. Wills is a strong champion of such schemes, saying storing water in times of plenty to use in times of shortage is a ridiculously simple strategy “especially when the secret recipe to our economy is ‘just add water’”.

Guy doesn’t disagree. Water looms large in his considerations and is on his legislative agenda.

Asked to identify the three biggest problem issues facing dairying, first on his list was “managing our natural resources more efficiently”. This included water and nutrient run-off.

“And you can expect to hear a lot more from me over the next 12 months as the Government moves into reforming water systems and the Resource Management Act (RMA),” he said.

He feels his style will be similar to the man he replaced, new Speaker David Carter.

“We are both from rural backgrounds, we are both farmers, we are both still actively farming, albeit less than I used to.

“And I’m going to be very open and accessible, getting around the country.

“I’ve got a lot of visits planned, and already the invitations are flooding in for industry groups wanting to come and meet me.”

He ventured that maybe he represents “a bit of a younger generation”.

He is certainly optimistic about the prospects of the businesses embraced by his portfolio.

“The future of our primary industry industries looks great.”

Before taking over from Carter, he had been Associate Minister of Primary Industries and the two had worked closely together on the issues affecting primary industries over the previous 15 months.

So what was the highlight for him over that period?

As Associate Minister, Guy was delegated to look after forestry.

“And I really enjoyed working with the forestry sector,” he said.

“It’s an industry that generates around $4.5 billion in annual exports and they’ve got a target of growing that to $12b in the next 10 years.

“A highlight for me was just getting around and understanding their industry. We had some robust discussions through the emissions trading scheme (ETS) changes that we made last year and I’m pleased that the Government decided to proceed with the second tranche of compensation for the pre-1990 forest owners.”

He had spent quite a bit of time in Christchurch and believes the forestry/timber industry should be excited about the opportunities opened by the city’s rebuild.

“There’s an opportunity there to really showcase timber products,” he said.

“Timber has been widely used in the housing space before, of course. But there are a few commercial guys who are really excited and doing some buildings as we speak out of a combination of timber, steel and concrete, but emphasising the aesthetic values of timber and bringing those to the fore.”

Guy had given Associate Minister Jo Goodhew forestry issues.

Asked about any disappointments in his former role he said the forest industry had a bright future “and I really enjoyed engaging with them, so no, I didn’t have any disappointments”.

Strong outlook

Guy sees a bright future for the dairy industry too.

“I’m very passionate about it and the outlook is incredibly strong. New Zealand is a world leader. We have one of the most efficient competitive and productive dairy industries in the world. Of course the Government has stepped up to the plate with our primary growth partnership.”

This was backed up with industry funding in a variety of projects.

NZ had a strong reputation around the world for safe products, too, and was “really hooked into the Asian market”. The world’s population was growing, “and on our doorstep we have wonderful opportunities. Asian consumers, and consumers around the world, want to consume more protein.”

But the industry can’t rest on its laurels.

Among the major challenges on Guy’s radar screen are continuing to drive up production, using new technologies and managing the environment for future generations to continue to enjoy.

The Government was helping with an ambitious programme for continuing the momentum with free trade agreements (FTA).

“There are half a dozen of them in train.”

What weaknesses does he see in the industry?

He thinks there are issues around capital constraints. These had been slightly addressed with the changes made by Fonterra’s trading among farmers (TAF) “but I would say that’s still a bit of an issue”.

Growing the industry’s skill base was another challenge.

“As farmers age, we need to ensure that we are supporting the younger generation coming through,” Guy said.

And thirdly there’s the challenge of managing the country’s land and water resources more efficiently.

He regards encouraging more immigrants as hugely important.

Technology transfer issues are important too.

What about the dairy industry’s competition regulations? Yashili International had just announced Pokeno would be the location for the first Chinese milk processing plant in NZ, subject to Overseas Investment Office (OIO) approvals. The plant will produce up to 52,000 tonnes of finished and semi-finished milk product/year, buying its milk from a successful tenderer.

Further Chinese processing operations are being planned.

“In my view there’s plenty of competition currently in the industry and there will continue to be niche producers who pop up from time to time,” Guy said.

“We’ve got a very competitive dairy industry. I think Fonterra would acknowledge that, and I think the smaller players would acknowledge that as well.”

And no, he did not think this competition was to the detriment of Fonterra, “because Fonterra has very much a global outlook. It’s important that Fonterra compete on the ground for supply and it’s important that we have our small players in there able to compete in the marketplace as well.

“Competition is healthy, and I think we’ve got the balance about right.”

Climate change

Climate change issues and the Government’s handling of them are high among the industry’s concerns.

Guy had nothing fresh to offer on that front. He reiterated that agriculture has been deferred from coming fully into the ETS until 2015, but meanwhile it makes a contribution through fuel and electricity imposts.

“The Government is very aware we need to be partnering and investing in new technologies to address climate change issues, and we’ve invested about $45m in the global research alliance, which is doing good work,” he said.

“A lot of other countries are partnering with us and we are looking at new technologies to help address greenhouse gas (GHG) emissions.”

On animal welfare, the minister foreshadowed new legislation. He credited farmers with being very much aware that animal welfare issues would negatively impact on the industry.

“I reckon farmers are as a whole are doing a pretty good job with animal welfare,” he said.

“There are some scallywags out there and the Ministry of Primary Industries (MPI) addresses those individuals.

“So we are doing pretty well in that space, and I just need to make sure that our current policy settings are right. I’ve got some legislation going through the House this year.”

When it came to questions about food safety, Guy deferred to Nikki Kaye as the minister in charge. But he was confident NZ had “a fantastic system” and an enviable record.

“We are showcased around the world for having highly regarded, tried and trusted food safety systems, and we need to ensure we continue to maintain the good work that we do, because we are an exporting nation and we rely heavily on getting our products to market.

“Any perception of safety issues could be detrimental to us.”

But did the system stand up to the recent incident involving the discovery of dicyandiamide (DCD) traces in some dairy products?

“I think there will be some lessons to be learned from the DCD issue,” Guy said.

“So we’ll work through those at the appropriate time.”

Security challenges

As with food safety, he was confident NZ had a world-leading biosecurity system – “it’s much better than it was when we came into office”.

But it would always be tested thoroughly, because NZ had 10m travellers crossing its borders every year, and 175,000 items come across the border each day.

“So I’ll be engaging closely with MPI officials on the biosecurity system.”

He said the Government last year had one of the biggest intakes of new staff into biosecurity – 46 new people including dog handlers working on the front line.

But “we need to ensure we are making the right investment in new technologies and systems and we are a lot more sophisticated with our use of intelligence and information to better understand emerging risks.”

The Government is also working with an array of industries on industry-government agreements. Guy described these basically as 50/50 partnerships between industry and government to ensure NZ had the readiness and response capability for an adverse event. For the dairy industry, the next stage would be drafting up a memorandum of understanding and then will come work on a draft deed.

“And of course we’ve got the national animal identification and traceability (NAIT) scheme. That’s continuing to be rolled out,” Guy said.

“My understanding is it’s working pretty well.

“That helps us to trace products – where they come from, and ultimately right down to farm level if need be. Basically it’s the animal’s passport.”

On his relationship with Fonterra, Guy said he had been in several meetings with the cooperative previously with Carter.

“Fonterra needs the Government and the government needs Fonterra,” he said.

“We need Fonterra to help us drive our very ambitious goal of doubling exports by 2025. So we’ve got a very strong working relationship with Fonterra.”

Fonterra chair John Wilson was scheduled to meet the new minister and Guy said if there were issues, “we’ll pick up the phone and talk about them”.

Fonterra also had a good working relationship with MPI officials.

Dealing with Federated Farmers is much the same. Guy recalled that one of his first visits had been to the drought-troubled Hawke’s Bay a week or so earlier, facilitated by the federation to meet dryland farmers.

“It rained the day I visited,” he said but, anticipating any suggestion he might have been responsible for the rain, he hastened to add “I can’t make it rain for you, though, if you ask”.

Back on his own family farm in Horowhenua, water didn’t seem to be an issue.

“We are in a reasonable position in Levin,” he said. “We got rain a week ago.

“I am conscious of the fact farmers need rain now to get them in a stronger position in the autumn, and particularly going into the winter.”

But he was obviously conscious too that he doesn’t have to travel far to get home and away from his ministerial workload.

Water or not, “the good thing in my role is I enjoy getting back on the farm at the weekends.”

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