2016/17 Estimates for Vote Primary Industries and Food Safety

Transcription

1 2016/17 Estimates for Vote Primary Industries and Food Safety Report of the Primary Production Committee Contents Recommendation 2 Introduction 2 Primary Industries appropriations Primary Growth Partnership 3 Supporting the organics industry 3 Biosecurity 3 Fisheries monitoring 4 Animal welfare regulations 5 Mental health in rural communities 5 Food Safety appropriations Campylobacter risk management strategy 5 Raw milk regulations 5 Health Star Rating system 6 Country-of-origin labelling 6 Food Safety Science and Research Centre 6 Appendix 7

2 Vote Primary Industries and Food Safety Recommendation The Primary Production Committee recommends that the appropriations for the year ending 30 June 2017 for Vote Primary Industries and Food Safety, as set out in Parliamentary Paper B.5 Vol. 9, be accepted. Introduction Food safety appropriations were added to Vote Primary Industries to create Vote Primary Industries and Food Safety in The Minister for Food Safety, Hon Jo Goodhew, and the Minister for Primary Industries, Hon Nathan Guy, are responsible for the appropriations within the Vote. The administering department is the Ministry for Primary Industries. Vote outcomes Core outcomes sought from the Vote are to: maximise export opportunities improve sector sustainability increase sustainable resource use protect New Zealand from biological risk. Significant appropriations The appropriations sought in 2016/17 increase by 15.8 percent to $ million from estimated actual spending of $ million in 2015/16. Vote Primary Industries and Food Safety includes the following approximate appropriations: $190 million for border and domestic biosecurity risk assessment $106 million for developing and implementing policy advice $70 million for activities relating to fisheries, animal welfare, aquaculture, Crown forestry assets, and administering grants and programmes $92 million for activities relating to forest management, wood production, bovine tuberculosis management, climate change research, and operating the New Zealand Walking Access Commission $163 million for the Primary Growth Partnership and for claims settlements under the Māori Commercial Aquaculture Claims Settlement Act 2004 $159 million for capital expenditure, including a $102 million investment in Crown Irrigation Investments Limited $112 million for food safety. 2

3 The ministry expects to collect nearly $124 million of Crown revenue and capital receipts in 2016/17, including just over $81 million for the sale of logs from Crown forests and just over $36 million in cost recoveries from the fishing industry. Primary Industries appropriations Primary Growth Partnership In October 2015, Silver Fern Farms shareholders approved a proposal to grant Shanghai Maling, China s leading meat processor, a 50 percent stake in the cooperative. The proposal had not been confirmed by the Overseas Investment Office at the time of our deliberation. Recognising that Silver Fern Farms has received government investment through the Primary Growth Partnership (PGP) and red meat sector strategy, we asked the Minister for Primary Industries how he could ensure that New Zealand taxpayer investment would benefit New Zealand. The Minister asserted that benefits from taxpayer investment should be maximised to New Zealand and not to foreign investors. The Minister told us that the company controls the intellectual property for an exclusivity period of approximately two to five years, before it is then made available to the wider industry. The Minister also noted that a New Zealand Institute of Economic Research report calculated the cost benefit ratio from government investment in PGP as being a net benefit of $32 for every dollar invested by the Government. 1 The Minister considers that foreign capital investment has enabled primary industries to remain competitive as well as support land values during periods of economic downturn. Supporting the organics industry The Minister and officials have been discussing the development of organics regulations with the organics sector. The ministry has also been working on equivalency standards with the organics sectors in the United States of America, Korea, and China, to help New Zealand producers get their products into these markets. Observing the rise in organics exports from about $70 million in 2002 to about $240 million in the last year, the Minister recognises the significance of this growth sector. We are aware that the organics sector has previously made successful bids for funding from the Sustainable Farming Fund. The Minister said he would welcome an application from the organics sector to become a PGP programme recipient in the future, but he noted that the sector would have to meet the application criteria. We will continue to monitor the growth of the organics sector with interest and urge the sector to build unity. Biosecurity Border clearance levy A new border clearance levy, built into ticket prices, took effect from January International airline passengers are charged about $22 and cruise-line passengers $26. We were told that, with a forecast 9 percent growth in tourism this year, this increased revenue 1 New Zealand Institute of Economic Research (May 2014), Economic contribution of PGP: a cost-benefit analysis of potential impacts. 3

4 can be invested directly into frontline biosecurity services. Gains from this investment include more biosecurity staff and detector dogs. A new video has also been developed to be played on international aircraft arriving in New Zealand. The video reminds foreign travellers of their biosecurity obligations in New Zealand. We were told that there had been no measurable negative feedback on the introduction of the levy, and asked whether it could be increased to fund local councils in developing infrastructure for tourists. The Minister believed that the levy was set appropriately and that any further rise could deter tourists from choosing New Zealand as their destination. However, the Minister observed that more funding had been made available for tourism infrastructure in this year s Budget. Velvetleaf We were concerned that velvetleaf seed has been found in some fodder beet crops on several properties throughout New Zealand. We asked how contaminated seed lines had been able to get through biosecurity screening. The Minister noted that the contaminated seed lines were certified as meeting our biosecurity requirements by the exporting country. However, in response to this specific biosecurity threat, the ministry has implemented more rigorous testing at the border, with any coated seeds requiring sign-off by a technical officer. The Minister said that the ministry has worked quickly with farmers to identify and help eradicate velvetleaf contamination. We were curious to know why the importing company was not under process of prosecution, to send a clear message of the implications of importing contaminated products or unwanted pests into New Zealand. We were told that an inquiry is under way, and that the company and some individuals are being investigated. Fisheries monitoring We are aware of recent public concern about fisheries monitoring, including unreported catch and the reliability of data for fisheries management. The Minister informed us of a range of initiatives to address these concerns. From May 2016, all foreign charter vessels are required to be reflagged in order to fully comply with New Zealand legislation. Observers have been placed on all these vessels. The number of observers on fishing vessels has doubled, and coverage of commercial fishing is improving through the increased use of cameras and vessel monitoring systems. Recreational fishing is monitored through boat-ramp and telephone surveys, surveillance through fly-overs, and through consultation when the fish stocks are assessed twice per year. On average per year, the ministry serves 3,000 infringement notices, conducts 1,000 audits, and undertakes 300 commercial and recreational prosecutions. We were told that the ministry was not able to prosecute a recent case of commercial fish-dumping because the video evidence taken from the fishing boats cameras was not admissible in court. The Minister noted that future work will include continued reviewing and monitoring of total allowable commercial catch settings, assessing whether current regulations and penalty regimes are fit for purpose, and reviewing the Fisheries Act The Minister told us he intends to propose legislative amendments to enable on-board cameras to be used for enforcement and compliance purposes, although no time frame was given. 4

5 Animal welfare regulations 2016/17 ESTIMATES FOR VOTE PRIMARY INDUSTRIES AND FOOD SAFETY The animal advocacy groups, SAFE and Farmwatch, published footage in late 2015 that showed farmers and slaughterhouse workers in the Waikato mistreating bobby calves. The Minister told us that the ministry was running a working group on bobby calf management, which has operated with greater urgency since the release of the footage. The ministry has been consulting on regulations relating to the Animal Welfare Amendment Act 2015, which amended the Animal Welfare Act The bobby calf regulations are being fast tracked where practicable. The Minister expects those regulations to be in place by August this year, but acknowledged that there will be a transition period as farmers manage the cost of complying with the regulations. The regulations cover the care, feeding, and shelter of bobby calves, as well as their transport requirements. Mental health in rural communities We acknowledged the stressors faced by farmers and sharemilkers who are saddled with debt or who are struggling because of the recent dairy downturn. We were pleased to hear of $500,000 to support mental health initiatives for rural communities, funded jointly by the ministry and the Ministry of Health. Mental health helpline staff are also being trained about rural communities and culture, to better help farmers who call the helpline. The Minister predicted that the medium- to long-term outlook for the dairy industry was strengthening. However, the next six to 12 months would continue to be volatile for dairy farmers. The Minister believed that banks were working well to support these farmers as their land value decreased. As well as strengthening mental health provisioning, the Minister said that the ministry would work with the industry to support dairy farmers through education in farm management to better maximise their returns. Food Safety appropriations Campylobacter risk management strategy The ministry s campylobacter risk management strategy aims to maintain the 50 percent reduction in reported annual incidence of food-borne campylobacteriosis achieved between 2010 and 2013, with a further 10 percent reduction by To help achieve this goal, the Minister for Food Safety said that the ministry was progressing several initiatives, including introducing raw milk regulations, educating about raw-milk health risks, and developing a national case-control study that will look at identifying the sources of campylobacter contamination. We were told that 50 percent of reported campylobacter cases are coming from poultry and 40 percent from ruminants, including non-food contact. Raw milk regulations In December 2015, new regulations governing the sale of raw milk were introduced. The regulations aim to better manage the risks of raw milk to public health while recognising the growing consumer demand for this product. Although some countries, such as Australia, ban the sale of raw milk for human consumption because of its high risk, the Minister said that New Zealand is educating consumers about its risks, minimising risk through regulation, and keeping the relationship between the seller and consumer close. The Minister noted that the legislation and regulations would be reviewed after two years to ensure that they are working adequately and are fit for purpose. One of us believes that 5

6 raw milk regulations are too onerous and will drive some very good raw milk farmers out of the sector. We were concerned about reports that a cow belonging to a farmer who sold raw milk in Otago had tested positive for tuberculosis. The Minister told us that the ministry issued a notice of direction to the farmer to cease supplying and selling raw milk, while supporting the farmer in having the herd tested and the milk pasteurised for sale. Health Star Rating system The Minister advised that more than 1,200 products have been marked with the Health Star Rating system. We were pleased to hear that the home brands for two supermarket chains have also rated their products with this system. Based on projections from the Australian market, the Minister was confident that more companies would adopt the system. The Minister was encouraged that targeted demographics in New Zealand had demonstrated a good understanding of the system. We were also pleased by the Minister s reports that the system was encouraging companies to reformulate their products to healthier recipes, although the companies do not always advertise these changes in case consumers are put off from purchasing the product. We told the Minister that we would be interested in data that showed what sort of longterm effect the Health Star Rating system has on consumer choices. Country-of-origin labelling We expressed interest in country-of-origin labelling and felt that it allowed consumers to exercise choice based on their understanding of the country of origin s standards of food safety. Although the Minister acknowledged that consumers are more actively seeking out product information, she considers that this type of labelling does not assure the safety of the food for consumption. The Minister asserted that a testing regime determines food safety and not consumers perceptions about which countries have safer food standards. Food Safety Science and Research Centre The New Zealand Food Safety Science and Research Centre was launched in May 2016 as a partnership between the Government, industry organisations, and research institutions. It aims to promote, coordinate, and deliver food safety science and research for New Zealand. We expressed interest in being updated on the Centre s projects and work. 6

7 Appendix Committee procedure We met on 9 and 30 June 2016 to consider Vote Primary Industries and Food Safety. We heard evidence from the Minister for Primary Industries, Hon Nathan Guy, and the Minister for Food Safety, Hon Jo Goodhew. We received advice from the Office of the Auditor-General. Committee members Ian McKelvie (Chairperson) Todd Barclay Hon Chester Borrows Steffan Browning Barbara Kuriger Damien O Connor Richard Prosser Stuart Smith Rino Tirikatene Evidence and advice received In addition to the standard Estimates documents, we considered the following evidence and advice during this examination: Estimates briefing paper for Vote Primary Industries and Food Safety, prepared by committee staff, dated 3 June Office of the Auditor-General, Briefing on Vote Primary Industries and Food Safety, received 3 June Minister for Primary Industries and Minister for Food Safety, Responses to standard Estimates questionnaire. Minister for Primary Industries and Minister for Food Safety, Responses to additional questions, received 7 June