Agricultural Compounds and Veterinary Medicines Amendment Bill — First Reading 
Agricultural Compounds and Veterinary Medicines Amendment Bill — First Reading 
[Volume:636;Page:6909] 
Agricultural Compounds and Veterinary Medicines Amendment Bill 
First Reading 
Hon DAMIEN O'CONNOR (Acting Minister for Food Safety) 
: 
 I move  
That the Agricultural Compounds and Veterinary Medicines Amendment Bill be now read a first time. 
 This bill provides for changes to the principal Act the Agricultural Compounds and Veterinary Medicines Act 1997 to make it more effective and administratively efficient. It is well known that the agriculture and forestry sectors underpin New Zealand’s economy providing exports to a total value of around $17 billion a year over 60 percent of total merchandise exports and 45 percent of our total foreign exchange earnings. In turn agricultural compounds are a vital input into the primary production sector. In the year ended June 2006 the wholesale value of the New Zealand pesticides and veterinary medicines market was approximately $400 million. There are approximately 1000 pesticides and 2000 veterinary medicines registered for use in New Zealand. The range of agricultural compounds is extensive: plant and soil nutrients pesticides herbicides fungicides insecticides stock food pet food—basic feed and special supplements—and veterinary medicines themselves. 
In horticultural production—and the member my friend Mr Barker will be very interested in this—the use of pesticides is essential to securing market access for fresh export crops worth more than $2 billion a year by ensuring there are no unwanted pests in produce and preventing crop damage. Agricultural compounds are also used extensively in forestry and in pastoral sectors to manage pests and diseases and maintain plant health. Veterinary medicines are indispensable in maintaining the high quality and productivity of New Zealand’s commercial livestock population as well as ensuring the health and welfare of the large numbers of domestic and companion animals that form an integral part of our society. 
The use of pesticides and herbicides has increased only slightly in New Zealand over the past decade despite greatly increased output from the primary sector. In some sectors particularly horticulture there has been a noticeable reduction in use in response to worldwide consumer demands. Equally significant the types of substances used has changed to softer chemicals and biological insecticides which are less harmful to the environment. 
Although access to and use of agricultural compounds is vital to the New Zealand economy there are also risks if those compounds are used inappropriately or unwisely—risks to human health animal health agricultural exports and indeed our own biosecurity. The Agricultural Compounds and Veterinary Medicines Act is part of the regulatory framework for managing these risks in conjunction with the Hazardous Substances and New Organisms Act the Biosecurity Act the Food Act and the Health Act. The Agricultural Compounds and Veterinary Medicines Amendment Act was new legislation that came into force in July 2001 under this very good Government. The implementation of the Act has revealed a number of areas in which improvements could be made to the regulatory framework or where clarification is required in order to achieve the original policy intent. In addition changes to the organisational environment with the formation of the Food Safety Authority in July 2002 needed to be reflected in the regulatory environment. 
The overarching public policy objectives for the bill are to ensure firstly that risks arising from the use of agricultural compounds in New Zealand are managed efficiently and effectively under the Act; secondly that regulatory controls are appropriate for the degree of risk; and thirdly that business compliance costs are minimised. The proposals in the Agricultural Compounds and Veterinary Medicines Amendment Bill were made available for public consultation with the release of two public discussion papers. These were distributed to a wide range of stakeholders including manufacturers importers farming groups other users and of course Government departments. Eleven submissions were received in the 2002 consultation round and 17 were received in 2004. Most of those submissions were from organisations representing the interests of large numbers of individual stakeholders. Meetings were also held with a number of these organisations. Submissions received were considered when policy for the bill was developed and the proposed changes are generally supported. 
The bill provides for the closure of gaps that have been identified in the coverage of the Act in the areas of managing the public health effects of agricultural compounds and the regulation of all parts of the supply chain. This will be achieved by expanding the purpose of the Act to include managing risk to public health by specifying that the manufacture and import of agricultural compounds that do not comply with the Act are prohibited and by providing that codes of practice can be required for the distribution storage and transportation of agricultural compounds. There are mechanisms to ensure that there is no duplication of regulatory requirements with other agencies or other legislation operating in this area. 
The bill clarifies the statutory backing for arrangements in order to restrict the supply sale or use of certain products like prescription animal medicines or poisons such as 1080 or cyanide which are both very important for the agriculture industry. The bill restricts or controls the sale or use of certain products to authorised persons and the process for transfer of registration and provides that pet foods and stock foods are covered under the Act. 
The bill also proposes changes to improve the enforcement of the Act. It provides for the processes and powers relating to imports of agricultural compounds and veterinary medicine products to be aligned with those in the Biosecurity Act. The bill enables the director-general to recall non-compliant products or suspend product registration and it provides for a more appropriate and effective range in types of penalties for offences. The bill also provides for changes to improve the flexibility and administration of the Act by providing an alternative approval process for the import manufacture or use of agricultural compounds without registration in special circumstances; allows for recognition of persons or agencies to carry out specified activities or functions for the purpose of the Act; provides for the issue of certificates of compliance to assist exporters; and finally updates cost recovery provisions. 
 The bill also provides for removing or amending regulatory requirements that are in excess of those necessary to manage the risks or where the required degree of control can be achieved by non-regulatory or administrative measures. The bill also makes some minor technical changes. It removes provisions that have become redundant following changes in the operating environment and it updates terminology. There will be minimal additional compliance costs associated with this bill. For the majority of stakeholders the technical requirements will remain the same. This will mean very little change in costs. Indeed some of the amendments should reduce costs. 
While I have not spoken to each provision of this bill in any detail although I would be prepared to if I had more time I believe that I have indicated that the package of amendments represents a timely and necessary step forward in the effective and efficient administration of the regulatory regime for agricultural compounds with benefits for all stakeholders. I commend this bill to the House and will be proposing that it be considered by the Primary Production Committee. 
NATHAN GUY (National) 
: 
 It is very difficult to follow on from that speech. The member from the West Coast Damien O’Connor was obviously a little bit confused near the end of the speech. It reminded me of a sort of bedtime speech written by the research unit where he trundled on for 10 minutes and really did not address the Agricultural Compounds and Veterinary Medicines Amendment Bill very much at all. He may have in the last couple of minutes before he became confused. I was interested to hear him mention there would be no increase in compliance costs and I heard the Minister of Finance interject: “Yeah right! Heard that before.” So I guess it will be up to the select committee to determine that one. I also heard the member from the West Coast talk about the duplication of other Acts and that is a real concern I have having had a look through the bill. 
In essence the bill is a bit of a tidy-up. The Food Safety Authority was formed in 2002 following on from this Act in 2001. It will clarify the statutory backing for arrangements to restrict supply sale and use of certain trade names—in particular 1080. It will also enable the transfer of registration. It will also define what an agriculture compound is. 
Hon Rick Barker 
: Wow! 
NATHAN GUY 
: Would the member like me to tell him what that is? That is essentially natural and processed animal feed and substances used post-harvest. The bill also clarifies the benefits of registering a trade name product. 
 I have some particular concerns about this bill as it goes forward and I will talk a little about them. It appears that there could be some duplication in terms of the Hazardous Substances and New Organisms Act and I think it is very important to define that at the select committee. Reading through I believe there is quite a bit of duplication around the bill and that Act. In particular I alert the House to the part of this bill that deals with uncleared goods because the biosecurity inspector has the powers to detect an exotic disease outbreak that could occur in New Zealand. I think it is very important to realise that the inspectors are extremely important to this country’s biosecurity. 
It is quite appropriate I guess for me to mention that point right now when we have just had 1.8 tonnes of corn come in from the States and planted in New Zealand and I heard today the Minister of Agriculture mention that it was a human error. So we have had 1.8 tonnes of corn come into this country and I think that is a real concern for our little island nation. I was pleased to hear that he is going to have an inquiry into this. I hope it is not going to be like the Noel Ingram QC inquiry into the Taito Phillip Field allegations which was pretty toothless. This has to be a very complex inquiry because human health is at stake here. Important issues to raise around this biosecurity breach are that the Minister was a little unclear whether these plants will be destroyed and whether there will be some compensation to those landowners who have already planted the seed that has managed to creep through our borders. 
It brings to mind another issue that I should mention the varroa bee mite in the Nelson region. The Minister was advised that there was an 80 percent chance of success in containing that and he did not choose to take it so now the varroa bee mite is spread throughout the South Island. We have also seen didymo come in to the South Island. We had a scare recently in the Rangitikei. Fortunately it has not reached the North Island yet but once again the Minister had an opportunity to get stuck into that and try to contain it in the lakes and rivers of the deep south. So there are some real concerns around biosecurity in this country. 
I also want to talk about the importation and manufacture of unrestricted compounds and in particular special circumstances and that is in the explanatory note. I want to mention that the Director-General of Agriculture and Forestry has the power under this bill to approve one-off circumstances. If we had a rabies outbreak in this country it would be vital that we got a vaccine in from abroad very very quickly. That is a power that the director-general under this bill will have. 
The other thing that is important is to have clear lines of communication and cooperation between two of the big authorities the Environmental Risk Management Authority and the New Zealand Food Safety Authority—that is really paramount. The proposed changes will allow the director-general to recognise the person standards being met. In particular I refer to new section 33 where the sale and trade name can be restricted to the authorised person. That needs to apply to those recognised persons under the legislation. 
I heard the member for West Coast - Tasman reading out that bedtime story before. He talked about the two discussion documents that had pretty wide stakeholder consultation in April 2002 and also in 2004 when there were some amendments that went back to those key stakeholders. That is detailed under “Stakeholder consultation” in the explanatory note on the bill. The important thing is that there has been some dialogue with the stakeholders but I am still concerned that there may appear to be some duplication between the Hazardous Substances and New Organisms Act and this bill before us tonight. 
It is extremely important that I allude to the cost recovery. The explanatory note talks about a levy and the real concern there is that this could be introduced carte blanche. That would be a real concern to a lot of those people who would bear the brunt of that cost. In particular I am talking about the 18000 Federated Farmers members the 12000 suppliers to Fonterra the 7000 vegetable growers in this country the 500-odd winegrowers and the 600 who are involved in the viticulture and horticulture industry. Those people would end up bearing the brunt of what I believe could be quite a costly business. 
National will be supporting this bill but we do have some concerns around the cost and it will be down to the Primary Production Committee to iron those out. In particular I want to talk about those involved with the transport business because for them with the necessary legislation around storage and having the right labelling on their vehicles etc. there will be an increasing cost in time and an increasing cost in personal consultation there will be more paperwork and documentation to take through and there will actually be more processes and procedures that will add to compliance costs. This bill talks about the $85 an hour that will be charged out. 
Debate interrupted.