- Economic Context
- International Economy
- Regulatory Context
- Provision of a coherent and seamless food regulatory regime.
- Protection at the border and through quarantine and post-entry conditions.
The Ministry's Operating Environment
MAF operates in a complex and sometimes ambiguous world where decisions inevitably require trade-offs to be made. The following sections describe this world and the issues to which we must respond, from the economic and regulatory perspectives.
Economic Context
Domestic Economy
The sectors are of critical importance to New Zealand's economy as illustrated by the following statistics.
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The land-based sectors, together with first-stage processing, contributed 14.5 percent to real gross domestic product (GDP) in the year to March 2002. This compares with a 13.8 percent contribution from the wholesale and retail trade, and 18.1 percent from finance, insurance, business services and property services. When the contribution of the land-based sectors to other sectors such as wholesale trade and transport is allowed for, the overall contribution of the land-based sectors to GDP is estimated at around 20 percent. The agriculture, horticulture and forestry sectors, together with first-stage processing, employ about 200,000 people, or 12 percent of the 2001 total-employed census count of 1,727,000. The value of Maori agricultural output is estimated to be approximately $ 700 million per annum. Maori currently own 14 percent of the land underlying plantation forests and that is likely to increase with Treaty settlements. For the June 2002 year primary-based sector export earnings were around:
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The central importance of the agriculture, horticulture, forestry and food industries in the New Zealand economy is widely recognised, but many still perceive these sectors to be competing in price-driven food and fibre commodity markets. The reality is that these industries are the centres of wider scientifically sophisticated cluster industries that encompass agritechnology, animal remedies, software, machinery, biochemicals and nutraceuticals. The industries have the scale, global marketing capabilities, technical skills and natural resource advantages that not only make them core to the New Zealand economy, but also provide New Zealand with the platform for future growth and for diversification into new and non-traditional products and markets.
Over the past two years, in particular, there have been a number of Government initiatives in the health, education and telecommunications areas to either boost the level of services or provide new systems and infrastructure to rural communities. These changes directly address equity of access issues faced by communities distant from larger population centres. Further initiatives may be required, particularly as the population of rural New Zealand further diversifies in the future.
Additionally, the rural sector is confronted by a number of other challenging issues. These include a cyclical downturn in profitability, rapid shifts in land use, farm labour shortages, increasing compliance costs, and the risk of disease and pest incursions. Recent economic analysis modelled the catastrophic impact on the New Zealand economy of a foot and mouth disease outbreak. This highlights the need for very strong biosecurity capability covering both the exclusion of pests and diseases and the ability to respond effectively to incursions.
For the plantation forestry sector, the next decade will see a 40 percent increase in the annual harvest. Because the domestic market is stable, this extra wood will have to be exported. Developing new markets and expanding existing ones, plus ensuring the domestic infrastructure (transport, labour, energy, etc) is in place to handle this increased harvest, are major issues facing the forestry sector.
Maori are significant stakeholders in agriculture, horticulture and forestry with much of their land and commercial interests being concentrated in the primary production sectors. The value of Maori agriculture is estimated to be approximately $700 million per annum, representing about 7.4 percent of New Zealand s total agriculture output. The potential for further growth is substantial. Maori constitute a large part of the forest industry workforce, own large areas of indigenous forest and land used for plantation forestry, and may in the future become significant plantation forest owners. Ownership of this primary sector resource base provides significant growth opportunities for Maori enterprises. Realising these opportunities, however, will not be without challenge for Maori who must determine their own pathways towards achieving commercial success.
International Economy
With over 80 percent of New Zealand's agricultural, horticultural, forestry and food production destined for export, access to international markets is of vital importance. However, the trading environment for primary products is seriously distorted by the financial assistance developed countries give to their farmers. Additionally, New Zealand must contend with a myriad of high tariffs and other forms of border protection that restrict market access for our agricultural, horticultural, forestry and food products.
A long-term objective for New Zealand is the achievement of an international trading environment free of economic and technical barriers to market access and free of export subsidies. New Zealand's objectives for the current WTO Doha Development Round are to reduce trade distortions in markets and improve market access. These negotiations offer New Zealand producers a watershed opportunity for wide-ranging and long-term gains in access to international markets. These objectives are shared with many developing countries whose economies would be significantly advantaged by improved access to wealthy but protected markets and by the elimination of subsidised competition. In parallel with the Doha Round, New Zealand is investigating, or entering into, negotiations on a range of bilateral and regional Closer Economic Partnerships (CEPs) . The principal objective of these CEPs is to enhance New Zealand s bilateral trade, economic and investment opportunities and relationships as well as build momentum for global trade liberalisation.
Equally important is the work being done under the auspices of the SPS Agreement that was ratified as part of the Uruguay General Agreement on Tariffs and Trade (GATT) Round in 1995. There are three bodies that set the international rules covering trade in animal and plant products: Codex Alimentarius Commission (Codex) for food safety, the Plant Protection Convention (IPPC) for plant health. Ensuring standards are science based and outcome focused will do much to remove needless technical barriers to trade that have been erected by many importing countries. New Zealand plays a leading role in each of these international bodies.
Additionally, there are a number of emerging trade or consumer issues that have the potential to create opportunities as well as risks for the sectors biotechnology, environmental certification, food safety and animal welfare. These issues need to be carefully monitored and policy responses developed as appropriate. Again, New Zealand is at the forefront of international thinking on these issues and practices.
Regulatory Context
Food safety is a high interest issue both within New Zealand and in our international markets. The emergence of new or more virulent pathogens, fears of chemical contaminants, changing food production technologies, increasing complexities within the food chain, higher volumes and types of imported foods, changing consumer habits and choices, and regulatory failures have caused many governments to rethink their food regulatory programmes. The decision of the New Zealand Government to form a national Food Safety Authority (as a semi-autonomous body attached to MAF) is a significant step forward in the evolution of food regulation in this country.
Effective biosecurity systems are fundamental to New Zealanders future prosperity and well-being. New Zealand faces increasing risks from the introduction of new pests and diseases because of increasing flows of goods and people into the country. The need to escalate performance across the biosecurity programme has been signalled with the publication (December 2002) of Guarding Pacific's Triple Star a draft Biosecurity strategy for New Zealand. The strategy's vision is to keep New Zealanders, our natural resources and our unique plants and animals safe and secure from damaging pests and diseases, and it proposes strong and co-ordinated leadership and management.
Maintaining our favourable animal and plant health status is a key factor in ensuring that our exporters can access overseas markets. Access for New Zealand s primary products to international markets relies on the credibility and integrity of our official assurance (certification) programmes. New Zealand s level of dependence on primary industries for its wealth is the highest amongst developed countries. In many cases our competitive edge stems from our relatively natural production systems and freedom from the world s most serious pests and diseases.
The WTO SPS Agreement governs the human, animal and plant health requirements that our trading partners can impose on our exports. It also constrains us in terms of the requirements we can impose on products that we import.
Health Protection and Export Assurances New Zealand has a suite of legislation covering food production, processing and the sale of food within New Zealand and for exports of animal products. Rising food-borne illness and a general failure of the programme to provide a domestic focus and function effectively led the Government to integrate administration of food-based legislation into a single agency (NZFSA) with the primary objectives of:
- Protecting and promoting public health and safety in relation to food products and by-products.
- Facilitating access to markets for food products and by-products.
In relation to food and NZFSA's specific areas of focus, the Government has listed the following items as of critical importance: Reduction in the incidence of domestic food-borne illnesses.
Provision of a coherent and seamless food regulatory regime.
Providing advice and acknowledging the whole of government interest in food administration, while assuring stakeholders that trade and commercial interests do not compromise health and consumer interests.
Countries importing New Zealand s animal and plant products often require official assurances attesting to the health status of the products. . These take the form of sanitary (human), zoosanitary (animal) and phytosanitary (plant health) assurances. Often non-health related assurances are also required. MAF (specifically the Biosecurity Authority) and NZFSA have a recognised role as the competent authority in providing these assurances, which are based on comprehensive and integrated plant and animal health and food safety regimes.
Health Protection and Imports Biosecurity the prevention and management of risks posed by pests and diseases to the economy, the environment and human health is the collective name used since 1993 for the set of programmes and activities used to protect New Zealand from the importation of unwanted pests and diseases, and for managing pests and diseases in New Zealand. The Biosecurity Act 1993 provides a tool that can be used within a variety of ministerial portfolios, by local government and by others.
New Zealand's biosecurity risk-management system is designed to protect the country from the impacts of exotic (foreign to New Zealand) pests and diseases. It is based on four inter-locking sub-systems: Managing risks off-shore as far as possible.
Protection at the border and through quarantine and post-entry conditions.
Surveillance systems to quickly detect pests and diseases which may have entered New Zealand. Control and eradication programmes to manage or eliminate unwanted pests.
Public health is also enhanced by implementing elements of the Food Act 1981 that require food imported into New Zealand to meet our requirements in relation to the presence or absence of hazards in the food, that might cause food-borne illnesses. Hazards of concern are chemical, microbiological or physical in nature, and generally exclude those covered by the Biosecurity Act.
Contact for Enquiries
Strategy and Performance Group
Ministry of Agriculture and Forestry
Pastoral House
25 The Terrace
PO Box 2526, Wellington
Tel: +64 4 894 0100
Fax: +64 4 894 0738
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