MAF, Meat & More
An address to the Meat Industry Association annual conference Queenstown,
16 September 2002
by Murray Sherwin Director General, Ministry of Agriculture and Forestry
Mr Chairman, distinguished delegates
Thank you for inviting me to address this conference. MAF's relationship with the Meat Industry Association is core to our work, and I am delighted to say that the relationship is in good shape. This is due in no small part to Brian Lynch's role as your Executive Director. As Brian prepares to sail off into the sunset after a long and productive career, let me pay a tribute to his skills, tenacity, charm and good sense - all traits well respected by his many friends at MAF.
Now is a good time to speak about MAF and its many points of contact with the meat industry. I have been in my role for 10 months and am now getting to grips with the issues of MAF's future directions and how we understand what we should be doing, why we should be doing it, and how we are going to do it. The timing is right also because as of 1 July, the New Zealand Food Safety Authority came into being. We all have to learn what it means to have a semi-autonomous body as the vehicle for delivery of a significant part of our core corporate outputs. The meat industry, in particular, has a very real interest in the success, effectiveness and efficiency of NZFSA.
Furthermore, there has been a major piece of work underway for over a year under the auspices of the Biosecurity Council aimed at developing a biosecurity strategy. This is a matter of high interest to both you and me, and today provides an occasion to reflect on the key issues associated with that strategy.
This is also a good time to reflect on issues of MAF's capability or, more broadly, how well the organisation is placed to carry out its mandate and what you can expect to see from MAF in the future.
But first some context. The past couple of years have been a good time to be associated with farming in New Zealand. The significance of our primary product sectors for the wider New Zealand economy has been heavily underlined, as dairy and meat farmers have enjoyed returns on a scale not seen in 30 years. That rural good fortune has had wider spin-offs in the form of increased employment, increased retail sales, higher investment levels and an economic growth performance that, unusually for New Zealand, has defied a substantial global slowdown.
Good weather, reasonable prices in international markets and a rare combination of a very low real exchange rate, low nominal interest rates and on-going low inflation have all contributed to this recent prosperity. These factors are all outside the direct influence of farmers, government or public servants, including the employees of MAF, much as we would all love to grab the credit.
But it would be wrong to ascribe all of the successes of the past couple of years to the purely serendipitous forces of climate and financial markets. The reality is that New Zealand farmers and farm product processors have been working hard to be competitive in global markets over many years - cutting costs, raising productivity and taking the hard decisions needed to ensure the viability of their businesses. They have to if they are to survive. Without protection or subsidies, New Zealand farmers have learned that they must adapt. They must continually raise productivity or wither. That challenge has been met, and must continue to be met.
So how do Governments and government officials like me and my MAF staff participate in this process? At the level of the macro-economy, governments provide the foundations of the business environment - an efficient tax structure, sound money, law and order, well-defined property rights, physical infrastructure, education services and so on.
At the micro level, or the level of the firm, governments provide the legislative and regulatory framework within which the private sector operates.
It is at this micro level that MAF does the bulk of its work. Your industry sees it in a number of different guises. The longer-term viability of our meat industry is underpinned by the work of people such as the MAF trade policy analysts who work in the international arena to prise open markets and reduce tariff barriers for New Zealand meat exports.
All of your product leaves these shores with a MAF/NZFSA certificate confirming that it is fit for purpose. Behind each certificate is a mountain of work - establishing agreements with the destination country about what we are certifying and how we are doing it, translating those agreements into protocols that guide operating practice in each meat plant, and verifying that those protocols are being complied with day-in, day-out.
Your industry is crucially dependent on the health status of our livestock, which in turn is significantly dependent on the effectiveness of the biosecurity screen provided by MAF. Moreover, animal welfare issues have become increasingly important to the world's consumers. MAF's work with government-appointed groups such as the councils for national animal welfare and ethics assists (NAWAC and NAEAC) in providing forums through which the range of competing views on inherently complex and difficult issues can be heard and outcomes reached. These outcomes aim to allow our primary industries to function efficiently, but also reassure consumers here and abroad that our animals are being treated humanely at all points in their life cycle.
The regulatory and institutional framework within which our primary industries function is of direct interest to our MAF policy team, which is responsible for providing advice on matters such as producer board reforms.
Likewise, that team covers a myriad of other policy matters ranging from the management of water resources, to GMOs, to climate change research, to pick just a handful of issues from the current agenda. In short, your industry has a large vested interest in a successful strong and vigorous MAF. As MAF's Director-General, I welcome your assistance in ensuring MAF is up to the task.
Let me turn now to the specific issues of interest to you.
The New Zealand Food Safety Authority
The New Zealand Food Safety Authority (NZFSA) is now a reality. The fact that it was able to launch successfully on 1 July is an enormous tribute to the dedication and professionalism of the team who worked through the previous seven months, in the face of significant uncertainties, to have the new body ready for that launch.
NZFSA is a semi-autonomous body attached to MAF. Government's objectives in selecting this form of governance are to ensure that food policies reflect a whole-of-government approach and that the interests of both producers and consumers are recognised and given due weighting.
This means that NZFSA will project an independent look and feel to the outside world, including to the meat industry. It has a separate Minister, a separate Vote, it resides in separate premises, has a separate logo and corporate identity, a separate web site, its own policy capability, and so on. Its Executive Director, Andrew McKenzie, operates under a comprehensive set of delegations from the Director General which ensure that he has responsibility for the effective and efficient functioning of NZFSA, administration of the Animal Products Act and for the maintenance of effective working relationships with stakeholders, including the MIA and its members.
So where does the "autonomous" stop and the "semi" start? Well, the form of governance is intended to ensure that the essential relationships with other parts of MAF, especially the Biosecurity Authority and the trade negotiations team in
MAF Policy, are not lost. It is also intended to ensure that there is no duplication of costly administrative infrastructure. Consequently, NZFSA staff are employees of MAF, utilising the MAF HR, IT and Finance platforms. I, as Director-General of MAF, retain an "ownership" interest in the overall performance of NZFSA.
It is not my role to engage in day-to-day operational matters involving the meat industry and NZFSA, and administration of the Animal Products Act. But I do expect to maintain a close interest in the higher-level policy framework surrounding the functioning and performance of the meat industry from an overall agricultural perspective. For that reason, I am delighted with your interest in the creation of a high-level meat industry advisory board and look forward to its development into a productive and influential body facilitating the on-going progress and prosperity of the meat industry and its productive relationships with MAF.
There is one further issue of substance in this direct MAF/MIA relationship that I should touch on. That concerns the location of the Verification Agency (VA) within the MAF structure.
Currently, the VA sits in the Operations Group under Grant Burney. The VA was originally placed in the Operations Group pending an expected outplacement or privatisation. That now looks unlikely to occur, which provides an opportunity to consider where in the structure it would best fit.
Over recent months, a number of steps have been taken to ensure closer connections between the VA and NZFSA management teams. I believe the benefits of those moves are already apparent. Whether the VA should be formally included within the NZFSA management structure is not a question I have any fixed view on. But I have asked for a substantive business case to be produced as we review the preferred location of the VA. That is a matter on which your industry has legitimate interests, and for that reason, I will be wishing to share that analysis with you and to seek your views.
Biosecurity
Alongside food safety, biosecurity is a core part of MAF's contribution to the well-being of our agricultural industries. Biosecurity is also proving to be amongst the most difficult of the current public policy issues. Capability, funding, governance and priority setting all pose awkward questions. To grapple with them, the government has commissioned the development of a biosecurity strategy under the auspices of the Biosecurity Council. That process has been underway for about 12 months and I expect that a draft strategy document will be available for the Biosecurity Council to consider within the next month or so.
Biosecurity faces many challenges. To my mind, at least, these relate primarily to the rapid expansion in public, political and industry expectations for biosecurity, and the increasing scope and complexity of the biosecurity task. In essence, we have moved from being primarily concerned about the major risks to agriculture from enormous and obvious threats, such as foot and mouth disease, to a much wider array of concerns. These may pose lesser direct risks for agriculture and forestry but have wider conservation, health or cultural significance. At the same time, the advent of international rule-making in this field, particularly under the SPS framework, and a huge escalation in expectations for consultation, have added an overlay of process complexity.
Our biosecurity capability is the envy of the world. But it is clearly under stress and struggling to cope with the rapid escalation in the demands made upon it.
It will be important for your industry to engage fully in the debate over future biosecurity strategies.
As we review future directions for biosecurity and adapt to the wider scope of the biosecurity task, we must be careful that we do not overlook the huge risks posed by those old fashioned animal diseases such as foot and mouth, or by newer and equally devastating risks such as BSE.
You should note that the many reviews of the British foot and mouth disease experience are finding a ready audience in MAF as we seek to ensure that the lessons available from that British experience are well assimilated here. We have been engaged with the Treasury and Reserve Bank in economic modelling work to better understand the broader economic and systemic consequences of a foot and mouth disease outbreak in New Zealand. We have also been working with the key players in the Government's emergency management structures to ensure that we are able to call on the full force of a co-ordinated "whole-of-government" response to a major biosecurity emergency. Expect to see us engaging with your industry over the next few months as we refine that work and aim to get a more complete picture of industry contingency planning in this field.
Any event which could trigger a nationwide standstill on all livestock movements and an immediate suspension of exports of meat, dairy, wool and other animal products deserves the careful and vigorous attention of all of us.
MAF Policy
The MAF Policy group, with around 100 people, is one of the bigger policy advisory groups in Wellington. It also covers a staggering range of issues, and like other parts of MAF, struggles at times to keep up with rapidly escalating demands, and rapidly escalating complexity of issues. The success of this group will be the key to MAF retaining and enhancing a place at the top table of public policy debate. To command that place at the top table, MAF Policy must have the right people, with strong direction and motivation, adequately resourced and well plugged into trends and developments within our field of responsibility and influence.
As I have already indicated, there are numerous key issues to be dealt with over the next couple of years - genetically modified organisms, Kyoto, biosecurity strategy, water and resource management policies, the remaining producer board and industry structure reforms, rural affairs and the crucial trade liberalisation/trade policy agendas.
We have some real excellence within the Policy team. But it is also clear that we struggle at times to make the wider connections that mark true high performance. There are people and groups of people in the Policy team with real depth of knowledge in their particular fields. I would like to see this capacity develop to present a broad overview of current trends in the primary sectors, considering the implications of these for the performance of the wider economy, and the policy initiatives needed to ensure that agriculture and forestry can continue to support a wider set of national economic growth ambitions.
Therein lies a real challenge for our next Group Director, MAF Policy. We need to be successful in meeting that challenge, because that lies at the heart of our ability to ensure that the primary sector and related industries are incorporated fully into the Government's Growth and Innovation Framework.
MAF Corporate Capability
One of the more persistent observations about MAF that I was made aware of before taking up the role of Director-General concerned the extent to which MAF was said to operate as a series of silos or semi-autonomous fiefdoms. I now know that to be an exaggeration. But it is an exaggeration rather than a falsehood. I have said elsewhere that MAF shows the signs of the constant restructuring of the past 15 years, and it is hardly surprising that it has lost some sense of its own identity and its own place in life. Nor is it surprising that as senior MAF management has grappled with the succession of institutional restructurings, the various business units have attempted to get on with their own roles and, in doing so, have laid us open to the silo depiction.
What we now face, however, is a need to rebuild some of the core corporate capabilities that have suffered over the years. With Larry Fergusson now in place as Deputy Director-General with core responsibilities for the corporate functions - HR, IT, Finance, Communications, and Legal Services, together with the corporate strategic planning and budgeting functions - I have some very welcome additional capacity to make progress on those fronts.
Having that additional capability is important because it will enable me to concentrate my efforts more on the external issues and relationships.
It is also important because greater attention to the corporate strategic management function should enable us to deal proactively with emerging issues, rather than constantly finding ourselves on the back foot reacting to the multitude of awkward issues that hits the organisation seemingly on a daily basis. With that also comes a greater ability to ensure more consistency of strategy and action across the whole organisation and greater attention to performance management.
Conclusions
Our relationship with the MIA is an important one. I look forward to working with MIA members over the next few years as MAF strengthens its capacity to create opportunities for success in agriculture and forestry, and to manage risks to these key sectors.
Expect to see us working to strengthen our understanding of your industry, to improving the lines of communication with your members so that we better understand your strategies, you better understand our strategies, and we each have an opportunity to add value to those strategies.
In our strategic planning, we are painting a vision of a future for New Zealand agriculture and forestry which is prosperous, dynamic, scientifically sophisticated and environmentally sustainable. This is a future in which the primary sectors are recognised by the public, our politicians, and other industries as the vital backbone of New Zealand's wealth and employment generating capacity and an integral part of a successful and technologically advanced New Zealand future. It is a future in which innovative and competitive processing and marketing industries present a constantly evolving flow of world-leading products, driven by the demands of consumers in both domestic and international markets.
We will soon be wishing to check with stakeholders such as the MIA to ensure that this vision of New Zealand's agriculture and forestry is compatible with yours. We will also wish to check that the future MAF that we see as necessary to contribute effectively to the realisation of this vision is compatible with your view of what is needed.
Through interactions of this sort, I'm sure we will enhance what is already a close and very productive relationship.
Contact for Enquiries
Director-General
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
Tel: +64 4 894 0100
Fax: +64 4 894 0720
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