Statement of Intent
Operating Intentions
Outcome: The Economy
Intermediate Outcome 1.1 – market access (technical or non-tariff related) for New Zealand’s animal and plant products is maintained and enhanced
What are we seeking to achieve?
Less restrictive (or less costly) protocols, rules and regulations (that is, trade, biosecurity, sanitary and phytosanitary) governing the trade in New Zealand’s animal and plant products.
Why is this a priority?
New Zealand’s economy is heavily dependent on international trade in animal, plant and food products to support the living standards of its citizens. The global marketplace is, however, governed by significant tariff and non-tariff rules and regulations (barriers) that restrict market access and thereby impede the potential benefits derived from trade activities.
What will we do to achieve this?
MAF, in collaboration with MFAT and the NZFSA, participates in multilateral and bilateral trade negotiations to agree less restrictive market access for New Zealand’s animal and plant products. MAF is also responsible for establishing export certification requirements, and negotiating components of sanitary and phytosanitary equivalency agreements. We also ensure the consistent application of these protocols to trade goods via our pre-border and border control activities.
How will we demonstrate our success?
MAF measures success in achieving this outcome by monitoring the progress of, and downstream financial benefits associated with, less restrictive trade, sanitary and phytosanitary agreements and protocols governing the trade in New Zealand’s animal and plant products. As such, positive outcomes or success will be evident if there is an increase in the number of (and fiscal benefits associated with):
• new bilateral or multilateral free trade agreements;
• instances where MAF intervention enabled New Zealand to maintain or enhance market access it risked losing;
• successfully completed market equivalency agreements.
How will we demonstrate the cost effectiveness of our activities?
(This discussion is applicable to all Intermediate Outcomes and will thus not be repeated for individual outcomes.)
At its most basic, cost-effectiveness is about measuring an organisation’s relative efficiency in producing its outcomes.
For MAF, the development of robust cost effectiveness measures requires knowledge of both the total costs (fiscal, economic and other) of its outputs and the nature and incidence of the outcomes (that is, the impacts) generated as a result of these outputs. It also requires knowledge of the costs of alternative outputs that could be expected to generate similar outcomes. This “alternative output analysis” is a complex task, and if there are limited alternative outputs available, cost-effectiveness analysis will be difficult. It may be that cost-utility analysis – comparing the costs of achieving a common end point (i.e. using a common metric) – may be possible, but this is also a complex task.
As a result, MAF is adopting a phased approach to developing cost-effectiveness measures. During 2006/07, we developed an Outcomes Performance Monitoring Framework, which identified the outcomes MAF is pursuing and what data will indicate whether MAF has made progress in achieving them. Developing these outcome performance measures was the first step towards determining cost effectiveness.
We plan to develop a monitoring and evaluation strategy over the next two years that will, when implemented, allow for an assessment of the cost effectiveness of MAF’s outputs in creating desired outcomes. During 2007/08 we developed an organisation-wide (excluding organisational infrastructure services) intervention logic model linking inputs, outputs and expected outcomes. This was the second step in developing an overarching performance measurement framework (which includes cost-effectiveness measures) or so-called Performance Roadmap. This will enable MAF to further develop robust service performance measures to determine the quality and reach of its activities, and eventual fit-for-purpose cost-effectiveness measures. The cost of those outputs that create a specific outcome can then be aggregated.
Intermediate Outcome 1.2 – New Zealand’s reputation for consistent and principled application of international trade, sanitary and phytosanitary rules is maintained
and enhanced
What are we seeking to achieve?
New Zealand’s goods and services have access to all key markets without facing unscientifically justifiable trade barriers inconsistent with agreed trade rules. The nature of any existing trade barriers has been made explicit and in each case an item has been placed on the agenda for bilateral negotiation.
Overseas consumers recognise that New Zealand’s agricultural, forestry and related products are of high quality and pest (and associated disease) free.
New Zealand is recognised by WTO members as being fair and equitable in its application of the SPS and other WTO Agreements regarding imports. New Zealand’s domestic policy is also consistent with international obligations.
Why is this a priority?
Global demand for (and therefore income from) New Zealand’s agricultural and forestry related products are highly dependent on the reputational aspects associated with the way in which our products are produced as well as our current biosecurity status. Adverse changes in New Zealand’s biosecurity status could severely impact on the current and future demand for (and long-term reputation of) affected goods. It is estimated that an outbreak of foot and mouth disease could cost the economy in excess of $10 billion in foregone revenue during the first two years.
Maintaining our pre-eminent trade, biosecurity, sanitary and phytosanitary, and animal welfare reputation provides current and future potential cost-savings and market access implications for New Zealand’s agricultural and forestry products.
What will we do to achieve this?
The Government, through MAF, plays a key role in creating and upholding the integrity and reputation of our products, certification systems and policy settings. MAF also ensures that biosecurity risks are managed in an international trading context.
How will we demonstrate our success?
MAF measures success in achieving this outcome by monitoring the number of cases associated with breaching international trade, sanitary and phytosanitary, animal welfare and/or biosecurity rules brought and upheld against New Zealand entities. As such, positive outcomes or success will be evident if there is no, or a decrease in the number of breaches of international codes of ethics, protocols, rules and/or regulations associated with the trade in New Zealand’s animal and plant products.
Intermediate Outcome 1.3 – A business environment for the agricultural, food and forestry sectors that supports innovation, enterprise and high performance
What are we seeking to achieve?
The sectors operate in a dynamic environment characterised by ongoing investment in research and development, innovation and entrepreneurship. Profitability and productivity levels are high. Business survival rates are high and underpinned by the creation of new spin-off and diversification opportunities from industry-wide technology investments. There is close co-operation between public and private sector stakeholders. Sectors are active and informed participants in the setting and implementation of regulatory and strategic development frameworks. As a consequence, sectors are confident in the long-term viability of their business operations and MAF’s ability to provide fit for purpose policy advice and information regarding issues that may impact on their future business operations.
Why is this a priority?
Agricultural, forestry and related industries have traditionally underpinned New Zealand’s economic performance, and will continue to do so in decades to come. Much of New Zealand’s global success in the production, processing and trade of primary goods and services is the result of the sectors’ entrepreneurial and innovative ability to take on business or market challenges, to create globally competitive businesses and to implement logistics management and marketing strategies. Consequently, agricultural, forestry and related activities represent some of the few areas where New Zealand enjoys true (global) economies of scale.
What will we do to achieve this?
As the primary adviser on the policy settings for the sectors, MAF plays a key role in ensuring that, from a “New Zealand Inc” perspective, the business and regulatory environments are responsive to changes in the sectors and are conducive to innovation, entrepreneurship and investment.
MAF’s role in biosecurity and animal welfare regulation also requires it to design policy settings that reflect a range of risks to human health, the environment and business performance. In doing so, MAF has to balance the additional costs of compliance with the potential benefits associated with improved risk management.
How will we demonstrate our success?
MAF measures success in achieving this outcome by monitoring several macro-economic variables impacting on the sustainability of business in the agricultural, food, forestry and related sectors. These include, among other things, investment in research and development, regulatory efficiency and compliance cost/burden, overall productivity, profitability and producer returns. MAF also monitors and evaluates the effectiveness of its own interventions (such as the Sustainable Farming Fund) aimed at supporting business sustainability.
As such, positive outcomes or success will be evident in the sectors if:
• there is a proportionate increase in the total level of investment in research and development relevant to sectors’ activities;
• there is effective and efficient (or fit-for-purpose) regulation of sectors’ activities that, as far as possible, minimises the overall cost of compliance;
• there is an increase in businesses’ overall productivity and profitability;
• there are high and sustainable business survival rates;
• there are net positive outcomes or benefits associated with MAF initiatives to support business sustainability and development (that is, those associated with the Sustainable Farming Fund);
• there are positive spill-overs to other sectors from the success of the land-based primary industries.
Intermediate Outcome 1.4 – Prevention and reduction of harm to economic activity from pests and diseases (this discussion is also relevant to Intermediate Outcomes 2.1, 3.2 and 3.3)
What are we seeking to achieve?
Exotic pests and diseases with the potential to harm the economy, people or the environment are stopped at the border or are detected early and kept from establishing in New Zealand.
Why is this a priority?
New Zealand’s unique biodiversity and current biosecurity status are central to its economic performance, culture and the lifestyles of New Zealanders. Ensuring exotic pests and diseases (for example, foot and mouth disease, poisonous or potentially harmful insects, invasive flora) are not introduced to New Zealand is therefore of paramount importance.
What will we do to achieve this?
MAF is one of the few government agencies with a statutory responsibility to protect and manage New Zealand’s biophysical environment. As such, MAF is responsible for leading, co-ordinating and implementing New Zealand’s biosecurity system while balancing other social, economic and cultural costs and benefits.
How will we demonstrate our success?
MAF continually monitors its border control and biosecurity systems to determine whether interventions have been successful in detecting all potentially harmful pests and diseases. System or “pathway” detection failures are recorded as slippage – meaning the proportion of potentially harmful pests and diseases not detected by MAF interventions.
As such, positive outcomes or success will be evident if:
• there is a decrease in the extent of slippage of potentially harmful exotic pests and diseases at the border (or other identified detection “pathways”);
• monitoring and evaluation activity concludes that MAF’s interventions at the border are effective and efficient;
• the impact of biosecurity management activities on economic activity is minimised and fall within predetermined tolerance parameters.
Intermediate Outcome 1.5 – Enhanced prosperity for Māori engaged in the agricultural, food and forestry sectors
What are we seeking to achieve?
Barriers to the optimisation of economic potential of Māori land have been identified, Māori landowners are able to access appropriate government support for land development and, in general, the productivity of Māori land is increasing.
Why is this a priority?
Māori have significant interests in the agricultural, food, forestry and related sectors as resource owners and managers. Through the settlement of Treaty of Waitangi claims and commercial acquisitions, this asset base is expected to grow. There are however concerns that the productivity and performance of Māori assets in the sectors is, on average, below that owned by non-Māori. Optimising New Zealand’s economic potential, including Māori assets and the employment and other benefit streams they generate, will help to lift Māori per capita income in a sustainable way.
What will we do to achieve this?
MAF’s alignment with, and knowledge of, the agricultural, food, forestry and related sectors means it has the capability to support Māori in optimising the economic potential of their land and forestry assets. MAF Policy provides analysis and advice on issues affecting the performance of the sectors and promotes high standards of natural resource and environmental management in primary production. Via the Crown Forestry group, MAF also has a stewardship and transitional role in the return or transfer of forestry assets to Māori ownership.
Given that Māori are an intrinsic part of the rural community, and that the proportion of rural people who identify themselves as Māori is slightly higher than in the general population (for example, about 30 percent in the Gisborne District and 70 percent in Northland), it is expected that the Government’s Rural Proofing initiatives will have positive spill-overs for rural Māori communities and Māori engaged in the agriculture, food and forestry sectors.
The biggest determinant of Māori per capita income is the performance of the New Zealand economy as a whole and the jobs and other benefit streams that it can generate. MAF’s wider contribution to the economic performance of the agricultural, food, forestry and related sectors is therefore a key contribution it can make to Māori economic wellbeing. MAF Policy focuses on the role of government in setting the environment for the production, processing and marketing of animal and plant products.
How will we demonstrate our success?
While there is currently little available data on the productivity and potential alternative uses of individual Māori land blocks, MAF is interested in developing an increased understanding of the amount and location of Māori land that has potential for improved productivity from a changed land use.
In 2006, Cabinet agreed to a Māori Land Development Action Plan that aims to facilitate the development and use of Māori land through the provision of information, governance models and support to Māori landowners.
Part of the action plan is the Geographic Information Systems (GIS) Māori Land Assessment project which is led by MAF. The objective of this project is to provide government departments with improved information about Māori land, notably a regional assessment of the characteristics of Māori land (in the form of maps and summary documents). Once completed, information from this GIS should allow for an assessment of the extent of Māori land that is currently under-utilised (in comparison with its potential) at a regional level. Moreover, the information contained in the GIS will also be able to inform decisions about MAF’s potential role in supporting Maori land management and development. It is assumed that, once the GIS project has provided more information regarding current use and capability of their land, Māori will wish to use such information to improve the productivity and potential economic return of their land.
As such, positive outcomes or success will be evident if there is a long-term improvement in indicators such as those relating to:
• Māori land use;
• land use capability;
• vegetation cover;
• governance;
• land management.
Note that a number of expected immediate outcomes, measures and indicators associated with this intermediate outcome are not reflected in this SOI. They will, however, be incorporated in the 2009–12 SOI following a comprehensive review of the Ministry’s overarching Outcomes Framework.
Intermediate Outcome 1.6 – Effective stewardship of the Crown’s forestry assets
What are we seeking to achieve?
MAF seeks to achieve the best return on the Crown’s investment in a portfolio of commercial forestry assets whilst meeting contractual and other legal obligations and, consistent with government policy, the sale of the Crown’s interest in those assets.
Why is this a priority?
In addition to legally binding contractual commitments in respect of most of the assets administered, the assets are commercial and should be prudently managed to optimise the return to the Crown.
What will we do to achieve this?
MAF actively manages (via outsourced forest management contracts) day-to-day forestry operations whilst retaining staff who administer lease and other contractual requirements with stakeholders, and monitor and manage the performance of the forest management contracts. MAF also works with other parties to sell the Crown’s interest where this can be achieved at a return equivalent to the value of the Crown retaining its interest. This involves working with lessors (in the case of Māori lease forests) to effect the sale and surrender of leases, and with the Office of Treaty Settlements (in the case of assets under Treaty of Waitangi claims).
How will we demonstrate our success?
MAF measures its success via the return achieved on the assets; independent audits that demonstrate that the Crown is meeting its contractual requirements and is operating as a prudent forest manager;, over time, a reduction in the number and value of assets administered.
In the event that Ministers give final approval to transfer the forests presently under the management control of the SOE Timberlands West Coast Ltd to MAF, our priorities for 2008/09 would be to ensure that the ongoing contractual obligations of the Company are met while carrying out a detailed assessment on future options for the West Coast forestry operations (which will be completed by mid 2009 as required by Ministers).
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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