Thank you very much for inviting me to your One Event National Conference.

I’d like to start by acknowledging your President Don Nicolson, the Board of Federated Farmers, and those of you who have travelled to be here from farms and rural communities all over our beautiful country. It’s a great pleasure to be speaking to your annual conference once again, and it’s an honour to be speaking as your Prime Minister.

If I can look back for just a moment, I’d like to repeat a few words I said when I addressed your annual conference two years ago. National and Federated Farmers share many of the same values – a firm belief in free enterprise and individual responsibility, a deep respect for property rights, a realisation that governments don’t have the answer to every problem, and a conviction that hard work, initiative, ambition, and success should be encouraged and celebrated, not taxed and regulated out of existence.

Those are very much the values we are bringing to this Government. And – despite the global recession and the difficult economic times we face – they are very much the values that will drive us in the years ahead.

I know you had a busy session yesterday and that Agriculture Minister David Carter spoke about many of the issues you are concerned about and that the Government is working hard on. I don’t want to go over too much of the same ground, but I do want to touch on some of the challenges and opportunities that I see farming facing in the years ahead, and talk further about some of the larger initiatives we have announced in recent months.

As you know, the National-led government views agriculture as a key driver of New Zealand’s economic engine. We value the contribution that farmers make to our economy, our lifestyle – and the Crown accounts. When things are going well on our farms, this flows through into the small towns, the provincial cities, and into our big cities.  Conversely, when the primary sector sneezes, the New Zealand economy catches a cold.

It’s fair to say that – just like all developed countries – New Zealand is facing some real challenges at the moment. But despite these difficult economic times, I am very optimistic about the future of farming and the future of our economy.  Because even though many Kiwis – and many farmers – are struggling, we need to look beyond this recession and focus on the longer term opportunities we face.

The high-quality products you grow and produce are one of the keys to our recovery and our future prosperity. During this recession, demand for food has declined far less than demand for manufactured goods. And despite this recession, the middle classes in China and India are continuing to grow.  As they grow, their appetite for high-quality food will also grow. New Zealand is well-placed to feed that appetite.

We have a temperate climate, quality land, relatively abundant water supplies, and the world-class expertise and know-how of our farmers.  We are well-positioned on the edge of Asia, and have a growing number of free-trade agreements with countries in the region. We have a clean and green brand, and a reputation for producing safe, high-quality food.

Our challenge as a government, and your challenge as farmers, is to make the most of these competitive advantages and the extraordinary opportunities they present. If we succeed, agriculture will play a critical role in lifting New Zealand’s productivity, the value of our exports, and the growth levels of our economy.  That won’t necessarily be easy.

Other countries are increasing their agricultural production and positioning themselves to compete with us in our markets. What’s more, after several years of expansion and intensification, our farmers have to contend with pressures on the resources they rely on – land, water, and – despite rising unemployment – even skilled workers. And all of this is happening in the context of a world where consumers are increasingly aware of carbon footprints, climate change, and environmental performance.

So if New Zealand is to meet these challenges and make the most of our opportunities, we need to play to our strengths. We need to harness the experience born of generations of farmers. We need to make the most of our cutting-edge technology and know-how. And we need to protect our environmental credentials. All these factors will play a part in differentiating what New Zealand produces and ensuring better prices for your products. The question, of course, is how this is best achieved.

The Government has an important role to play in answering that question, and I’d like to take a few minutes outlining what we are doing. There is no one big idea we can implement to make the most of our opportunities in agriculture – or, for that matter, in any industry. But there are hundreds of small, relatively unexciting, pragmatic, but important things we need to do. Individually, these things may not seem to make much difference. But when you take them together they will have a significant impact.

From working to remove barriers to free trade, reforming the Resource Management Act, amending the Building Act, and reducing compliance costs for small businesses. Right through to bonding vets, doctors, nurses, and teachers in hard-to-staff rural areas, boosting investment in State Highways and broadband, and allowing trucks to carry larger loads. These and many other things are important and we are driving progress on them.

But there are three larger initiatives the Government has announced in recent months that I would like to explore in more detail today:

•    The Primary Growth Partnership,
•    Our plans for tackling climate change, and
•    The Water and Land Forum.

Our primary sector has a long history of continuous improvement. Doing things smarter on and off the farm has boosted production and the value of our agricultural products. This in turn, has driven better returns to farmers and growers, and to our economy.

From historical developments such as refrigerated shipping, aerial topdressing, the adoption of electric fences, and the boning out of slaughtered meat, to more recent successes such as the development of ZespriGold kiwifruit and significant gains in lamb weights over the last decade or so.

Just the other day I was told that Fonterra has developed a new process for making mozzarella cheese that cuts the time down from three months to twelve hours. That’s half a day from cow to pizza. We believe that the success, the know-how, and the innovative thinking in our agricultural industries provides a massive opportunity for New Zealand, and that there is capacity for even bigger gains in the future.  And because our agricultural industries have the scale, the market share, and the supply chains to be truly competitive on the world stage, we believe the government has an important role in helping farmers make these gains.

That’s why in this year’s Budget we announced the Primary Growth Partnership.The Partnership is aimed at driving innovation and doing things smarter right across the primary sector value chain. From education, research and development, and product development, through to commercialisation, market development, and technology transfer. PGP is a bigger commitment than the Fast Forward Fund which it replaces. It is also less complicated.

As David outlined yesterday, Budget 2009 provides $190 million of Government funding over four years for PGP. It will start at $30 million this year; go to $40 million next year; $50 million the year after that; rising to $70 million per year ongoing from 2012/13. Funding will be increased as industry shows capacity and the need to invest even more. With a matching commitment by industry, that’s up to $140 million a year that will be invested.

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