In 1882 the first shipment of frozen meat left New Zealand. It was a turning point for New Zealand's economic history. The Adoption of an innovative idea opened up new possibilities for farmers.
Our vision for New Zealand's agriculture is one where greenies and farmers are on the same page. An industry that's supercharged the no.8 wire approach - an industry where smart innovation has added value to our exports, and farmer's back pockets. Our vision is that farmers can take advantage of technology and the added value to ensure that their children's children can make a living on the land and enjoy the same clean rivers and healthy environment you remember from when you were young.
There are two roads we can take when it comes to the future of farming in New Zealand. We can try and feed the world with anonymous shipping containers of anonymous products that enter the giant commodity pool, cheap products that get moved around the world with no focus on where they are from or their other qualities. They are industrial food commodities. Industrial food commodities are defined by their price, their cheapness. The producers of these ingredients get low prices and capture very little of the value chain - most of the value is added in the processing and retailing, and in this model that value is captured by others.
Or we can pursue high quality foods, products with good reputations that customers will pay more for. These are products that proudly state they're made in New Zealand, products that state how they were grown and processed. Products that you can trust are safe and healthy for your children. Real food grown by real people in a real country that stands behind its food exports. The producers of real food know their customers and capture much of the value from field to factory to shop.
We in New Zealand need to decide whether we want to produce industrial ingredients or real food with proud provenance.
As customers around the world increase their demand for clean, green and safe food, New Zealand has the opportunity to step in and sell real food to them. We have the opportunity to look after our environment, produce high quality food, and get paid premium.
But the track that successive governments have put us on is a track for producing cheap industrial food ingredients. It is a track that will undermine our reputation for producing clean green and safe food.
I often hear the refrain - we have to increase production because we have to feed the world. We have to face the reality. We are never going to be able to feed the world. New Zealand has approximately 0.23% of the world's Agricultural land. Already we are facing competition on efficiency. Exporting livestock and our farming models and expertise to other countries with more available land means we are going to face more competition. This means we have to farm smarter.
I want to talk to you today about why we need to change course in our agricultural sector, and how the Green Party is going to work towards achieving that.
A decade ago this November, the Parliamentary Commissioner for the Environment investigated the impact of intensification of dairy in New Zealand. He described New Zealand's farming systems as 'financially and environmentally brittle'. This has never been truer than it is today. Our current agricultural industries keep the environment and often farmers, at the brink, or over the brink, of disaster as they push the land further and further in an effort to get more and more out of it. Policies supported by this National government, the previous Labour Government and organisations like Federated Farmers, have pushed farmers into an ever increasing intensification model that we just can't sustain.
The number of cows that this land of ours can sustainably carry has already been surpassed in many regions, even as we see more land converting to dairy. Just in the time since the Parliamentary Commissioner for the Environment described our farming systems as brittle, the total amount of land in dairying has increased by another 22 percent, and on each of those hectares we are squeezing in more cows than ever before.
For successive governments we have had nothing but a push for more and more intensive dairy as our route to success. This National Government says they plan to triple agri-food exports from $20b to $58b by 2025; they plan to do it by producing even more cheap industrial food commodities. That's not value-adding, that's blind allegiance to an ideology.
And as we've seen recently from the Federated Farmers' survey of wages and conditions in the dairy sector, it is not a leading high wage area. Low value add strategies struggle to support high wages.
But is this sustainable?
One of the most fundamental indicators of sustainability, our waterways, are telling us about the impact of this huge growth in dairying. More than two thirds of our monitored rivers have been classified as unsafe for swimming. That's not the image that we portray to the world for selling our products or promoting tourism. And most crucially, that's not the legacy that I want to give to my children. Dairy intensification is the number one driver of increasing water pollution in New Zealand. Our six million dairy cows produce as much effluent as 84 million people.
Value of agriculture
The turning around of this agricultural titanic is not a simple proposition. Agriculture contributes $17.8 billion to New Zealand GDP, and makes up around 60% of our exports.
To establish how to get the most from our agricultural sector we need to ask: what is New Zealand's agricultural value proposition? What do we offer to our markets around the world that is special and different?
First off I can tell you what it's not.
It's not industrial agriculture. It's not pouring anonymous commodity ingredients into the global pot. It's not producing the cheapest products at whatever cost.
Other agricultural production around the world can fill these markets. We have aspirations for environmental and labour standards that mean we can't compete with those countries with lower standards.
What New Zealand can offer is clean, green, and safe food - the food that customers around the world want to feed to their kids. Food with provenance.
We can offer food that customers want - food with a story of environmental protection, animal welfare, safety, and traceability. We can use our expertise to develop modern agricultural methods and technology that can also be exported, helping other countries to reduce their environmental impact and ensure clean food.
That's what we have to offer. And that's what we have to offer.
We can no longer focus our growth on squeezing more and more cows on the same bit of land. New Zealand needs to do production smarter and do it loudly so that people know what we have to sell and want to buy it. We should be selling a diverse range of high quality, value-added products with our name plastered all over them so that customers can ask for them by name.
We are a small country that can actually plan our agricultural exports to get the highest price for high quality products and well trusted supply chain. The Riddet Institute, our agri-food centre of research excellence based at Massey Uni, released a report a while ago that said we only need 20 great international retail relationships to transform our whole industry.
We need to get to know our customers instead of the middle men.
The push for intensification
So why then, does the Government's current strategy rely on a race to produce more and more milk powder at whatever cost? Over in the Hawkes Bay we have a prime example of how this race for intensification plays out.
The Hawke's Bay Regional Council's big dam project that was in the news the other day is focused on channelling $80 million of public subsidies into an irrigation scheme. What will this water be used for? The Councils own reports show a good proportion of it will be used to allow more milk powder to be produced off this land. Which means more cows on this land. Which means more dirty rivers.
We already have significant water quality problems in the Tukituki River without further intensification.
There will be a charge for this water. That charge will be able to be paid by dairy agribusiness corporations with huge debt, which will boost production through intensification, to service that debt. This dam will bring more large scale industrial dairy farms to the Hawke's Bay, driven by debt and shareholders to exploit the land, the rivers, the cows and the workers.
In South Canterbury a massive increase in intensive dairy farming means that the Canterbury Medical Officer of health is warning expectant mothers who get their water from a well or bore to get it tested because of the risk to infants from the toxic levels of nitrates in South Canterbury's groundwater. That's not clean and green.
Regional Councils are meant to look after and manage our rivers, wetlands and aquifers. Instead in the Hawke's Bay they are subsidising pollution.
And this intensification also takes us away from the green grass fed dairy that our advertising campaigns will have us believe. According to the Dairy NZ economic survey productivity has decreased as a result of increases in inputs relative to outputs. There has been a large increase in the cost of feed per milk solids produced, despite comparatively stable prices. This suggests there has been an increase in the amount of supplementary feed used. The stats on importation of PKE back this up.Not quite a 100 percent pure story.
Time for change
In 2009 I asked the Northland Dairy Development Trust at their Conference the following question: Is the aim of the dairy sector to maximise profits or to maximise milk production?
I still think that is the real choice facing the industry. Maximising profits and maximising production volumes have for a long time been seen as the same thing. I believe that these objectives are now actually in opposition. The impacts of dairy intensification are impacting our environment in ways that threaten our markets. When comments from Massey Uni ecologist Dr Mike Joy questioning our environmental credentials were broadcast internationally, it sent shockwaves through our tourism and primary industries. The response of the Government and its allies in the PR industry was to try to intimidate him into silence, rather than addressing the real issues. They wanted a cover-up rather than a clean-up.
This Government is holding our clean green brand up as a nice to have. Our Prime Minister, and he is the Minister of Tourism too let's not forget, said of our 100 percent pure brand that it needs to be taken with a pinch of salt, and compared it to the McDonald's slogan 'I'm loving it'. But if our international markets conclude that the brand is a sham, it will all come falling down and we will lose our marketing advantage.
This is becoming less like an accident waiting to happen and more like an accident that is happening.
There are many calling for a strategic change, and have been doing so for decades. A strategy for the agricultural sector is required. Implementation will be the challenge, but the will and the agreement for a strategic approach is there.
Many groups have talked about a vision for agriculture. The Riddet Institute has set out the 'how' of transforming our agri-food industry and we agree with much of the strategy in its four pillars.
1. Being consumer driven. Looking to what the highest value markets want and providing them with that high quality, safe, green food.
2. Investment in research and infrastructure.
3. Investment in people and their skills development.
4. Leadership from industry and government. We are planning on providing this leadership when we are a part of Government.
Green agriculture vision
A richer New Zealand won't be achieved by blindly driving ever more tankers of milk around the country. The Green Party has a vision of New Zealand with a smart, green economy that protects our environment.
We don't have an agricultural industry despite our environment, we have it because of our environment.
Our Green vision for agriculture has six key ingredients:
• value adding,
• innovation/ R and D
• environmental protection,
• building skills,
• a genuine brand, and
• working together.
Climate Change
As we think about how we can extract more value from our exports we also have to think about the impact of climate change on agriculture.
Climate change is already being felt profoundly by farmers.
The twin plagues of droughts and floods are affecting the way in which we grow food and fibre in New Zealand, and they are certainly affecting global markets. Other large producing nations, such as our neighbour Australia and the United States, are feeling the catastrophic effects of extreme weather on their ability to produce food in the same way.
Which leaves us with two key challenges.
Firstly, we need to reduce emissions, in order to ensure New Zealand becomes part of the solution to global climate change, rather than remaining part of the problem.
Secondly, we need to focus agricultural techniques and strategy on producing within the new reality and New Zealand's changing climate and weather conditions. The face of farming will necessarily change with the climate.
But to go back to the first point - emission reduction.
Dairy emissions in New Zealand have more than doubled since 1990
The sector's emissions increased by over one million tonnes a year just between 2010 and 2012 and the lack of a proper price signal means tens of thousands of hectares of forestry land continue to be converted to dairy.
The Ministry for Primary Industries' 2013 Deforestation Survey found 80,000 hectares of forest will be cut down between 2008 and 2020 - the equivalent of the Tongariro National Park.
There are 42,000 hectares (or 104,000 acres) still to go between now and 2020.
Forest owners say the Government's emissions trading scheme has made zero difference to their decision-making, reporting identical levels of intended deforestation under ETS and no ETS scenarios.
We urgently need a signal - one that accounts for the externality of climate change and incentivises carbon sinks rather than carbon sources.
We cannot keep using dairy as an excuse for inaction in New Zealand. We can't continue to ignore such a large and growing contributor to our emissions.
Every country faces a different and difficult set of circumstances when it comes to reducing carbon from their economies.
Precisely because we have unique challenges, we need to get on with it. It's all the more reason not to delay
As you'll likely be aware, the Green Party has every intention of getting on with it.
Last month we announced a comprehensive Climate Protection Plan, which includes a carbon charge of $12.50 for dairy and 25 per tonne on CO2 equivalent emissions for all sectors outside agriculture
All the money raised from the carbon charge will go back to households and businesses in the form of tax cuts.
Everyone will get their first $2,000 of income tax-free under the plan, and we'll reduce the company tax rate by 1 percent.
To date the Green Party is the only party going in to Election 2014 offering all New Zealanders a tax cut.
A leading economist last week described the likely impact of the Climate Tax Cut on farmers as "miniscule….tiny"
It will cost the average farm about 8 cents per kg of milk solids. To put this in perspective, if the exchange rate fell or rose 2% and stayed that way over a year, it would have the same effect.
Similarly, the cost is the same as a 2% shift in the international price of whole milk powder. On any given day, the baseline milk price can fluctuate by many more times than that. On average, New Zealand dairy farmers spend 47 cents per kg of milk solids on fertiliser alone. Eight cents is not a stick. It's a signal, and an important one.
The levy collection would be at a producer level, so it will be up to companies like Fonterra how it's passed on. We look forward to working with processors to find the best ways of rewarding less intensive, lower-emission farming. They may well opt to differentially reward farmers in order to achieve their own sustainability targets.
In the meantime, the Green Party plan includes financial incentives for farmers to make positive changes.
We'll reward emission mitigation and associated environmental improvements via an on-farm certification scheme. This will enable farmers to recover costs arising from the carbon charge. The many kilometres of riparian planting farmers are undertaking will qualify for carbon credits (also at $12.50/t CO2-e).
Our policy is designed to drive efficiencies, cleaner technologies, environmental integrity and future investment decisions. There's a balance to be struck between farmers' ability to pay for pollution, and the urgency of the problem at hand. We have been careful to try and achieve that balance.
We chose to exempt sheep and beef farming for the initial period of the Climate Tax Cut, as their emissions remain below 1990 levels, and continue to fall, and because indications are the tax would leave them vulnerable.
The independent Climate Commission that we'd set up will would work at including sheep and beef into the scheme as soon as is fair and practicable.
To suggest that farmers won't adapt, or that it will drive production offshore, shows a lack of faith in our farmers.
If farmers treat it as an opportunity, it becomes a huge competitive advantage. We sell our products to world off the back of a reputation for being clean, green and safe. The levy would become part of that brand.
Every industry and business in the world will in time be brought in under a carbon scheme. This includes agriculture. There is an argument to be made for getting a head start.
I don't accept the argument that New Zealand is so small we don't matter. When in history has New Zealand been satisfied to do nothing in the face of a global challenge just because we're small? The kind of New Zealand that says "we're so small we don't matter" is not one I want my kids growing up in.
Federated Farmers has a huge part to play in ensuring that New Zealand agriculture is doing everything it can to limit its negative impact on the climate, and drive progress in low carbon farming.
It doesn't help when your climate change spokesman goes on national radio saying Fed Farmers doesn't even have a position on whether climate change is real and dismisses the link between agriculture and climate change as nothing more than a "political construct".
Many felt that this disqualified Federated Farmers from any serious discussion on climate policy.
But serious discussion on climate policy is precisely where you should be.
Who has a son or daughter born after February 1985?
According to latest data, May 2014 was the 351st consecutive month where the planet was warmer than the 20th century average temperature.
Meaning if you have kids younger than 29 years old, they will not have experienced a colder-than-average month on planet earth.
In practice this basically means more extreme weather, something I think we're all becoming familiar with.
Insurance companies paid out $174 million in costs for weather-related events last year in New Zealand.
Drought in New Zealand during the first five months of last year cost the economy $1.6 billion.
Standard & Poor's recently ranked New Zealand's sovereign credit rating as among the more vulnerable in the world, because most of our cities are coastal and agriculture makes up such big share of our economy.
New Zealand should be doing all it can to ensure we are part of the solution to climate change, rather than remaining part of the problem.
Climate action is as much about opportunity and prosperity as it is about risk avoidance.
By meeting the challenge of climate change, we transform our economy and society for the better.
This has not been understood by our current Government and its failure to grasp it has left New Zealand exposed. .
National's policies mean New Zealand's net emissions are set to go up by 50% in the next 10 years , putting us on track to be the worst performing developed country under the UN Framework Convention on Climate Change.
On a per person basis, New Zealand now produces twice the amount of greenhouse gases as China and eight times that of India
We are the fifth highest per person emitters in the developed world.
Despite all this, our climate change efforts have, according to leading experts, "been more or less parked".
Any high-carbon economic model has a built-in self-destruct mechanism. We should be making every effort to shift our economy onto a more sustainable, lower-cost, low carbon footing
This is part of our vision for the future of the agri-food sector. Low carbon production will be part of the New Zealand food story. High quality foods, products with good reputations that customers will pay more for. These are products that proudly state they're made in New Zealand, products that state how they were grown and processed. Products that you can trust are safe and healthy for your children. Real food grown by real people in a real country that stands behind its food exports. The producers of real food know their customers and capture much of the value from field to factory to shop.
We in New Zealand will be producers real food with proud provenance.