Primary Industries in New Zealand

MPI manages systems

• New Zealand Primary Industry: A Snapshot

• New Zealand primary sector reforms

• The role of industry

• The role of MPI

• Development policy

Overview

MPI manages systems

Pastoral farming dominates – as at June 2014: – Sheep: 29.9 million – Beef cattle: 3.63 million – Dairy cattle: 6.7 million

(5.26 mil in calf or milk) – Deer: 0.94 million

Horticulture is increasingly important – Wine grapes: 311 000 tonnes – Wine: 190 million litres

Arable farming – Barley: 65,700 hectares – Wheat: 54,800 hectares

Fisheries – Commercial fish catch: 418,307 tonnes

New Zealand Primary Industries: A Snapshot

MPI manages systems Land Use in New Zealand

Total land area of New Zealand: 27 million hectares

New Zealand

Japan

UK

Philippines

Denmark

Germany

Italy

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For its size New Zealand has a very small population ...

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Population, millions

Countries by land area population; km2 and millions of people

...so we produce a little and export a lot

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Product % Exported % of World Production % of global trade

Dairy >90% <3% 33%

Beef 83% 1% 8%

Sheepmeat 90% 6% 75%

Wool 90% 14% 27%

Venison 98% n/a 50%

Kiwifruit 95% 21% 32%

Pipfruit 55% 1% 5%

Wine 70% 0.46% 2%

MPI

• 2013/14 – actual $18.06 billion

• 2014/15 – forecast $13.83 billion (-23.5%)

• Forecast to be 23.5% lower than historic high in 2013/14

• Larger than expected drop in international dairy prices

• Forecast sector farm gate price of $4.82 kg/milk solids to

June 2015

• 2025/16 – forecast $14.54 billion (+5.3%)

• Growth in demand from China as high inventory utilised

• Global production up this season, exceeding growth of

global demand

Dairy export revenue

Agricultural products export markets

Share of export goods by destination; YE June 2012 Source: Statistics New Zealand, Global New Zealand (2012)

Pacific Islands 3%

Australia 22%

China 13%

North-East Asia (excl. China)

14%

South-East Asia 10%

Southern and Central Asia

4%

Other 13%

North America

10%

Europe 11%

Asia 41%

Support levels

Historically farmers received little direct support; removing subsidies introduced in the 70s and early 80s was politically and economically difficult

1960s

1970s

1980-84 Post 1984

Past agriculture reforms in New Zealand

The removal of subsidies helped create a more competitive, innovative and productive agricultural sector

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Kg lamb per ewe

Milksolids per cow

Multi-factor

productivity

MPI manages systems

• Farms are privately owned and operated businesses

• Farmers’ production decisions and market returns are

dictated by the domestic and overseas markets, not the

government

• Sales depend on meeting customers’ expectations of price

and quality

• Production is efficient, profitable and sustainable

• Farms are getting bigger but fewer of them

• Family ownership still dominates, but more complex

management

Modern Farming in New Zealand

Policy and regulatory

advice

Food safety

Biosecurity Protect NZ’s economy, environment and human health from pests and diseases.

Safeguard consumers from the risks of food-related illness; protect NZ’s reputation as a producer of safe food.

Advise Government on policies for natural resource management, animal welfare, environmental issues, market access, productivity enhancements, trade and bilateral relationships.

MPI’s Work – Key Elements

MPI manages systems The Biosecurity System

RISK ENTRY

POINTS

Imports

Vessels

Passengers

Mail

Air

Sea

● International agreements

● Import risk analysis

● Border standards

● Pest risk analysis

● Pathway risk analysis

● Clearance standards

● Mail, passenger and goods

inspection

● 0800 pest and disease

hotline

● Internal border and path-

way management

● Response

● SURVEILLANCE

RISKRISK

RISK

PRE-BORDER BORDER POST-BORDER

Activities for Risk Reduction and Trade Facilitation

Food Safety Regulatory Model

MPI manages systems Sanitary and Phytosanitary measures

- Free Trade Agreements and SPS chapters

- Joint management committees

Trade policy

- WTO rules-based trade

- Cairns Group

Cooperation

- Capacity building

- Mutual recognition

Agricultural trade relationships

MPI manages systems Commodities Levies Act

- Industry organisation

Sustainable Funding Fund

- Communities of interest

Primary Growth Partnerships

- Long term innovation with potential industry-wide benefit

Irrigation Acceleration Fund

- Regional rural water infrastructure

Productivity policies

Thank you!