Agricultural Compounds and Veterinary Medicines Amendment Bill — In Committee 
Agricultural Compounds and Veterinary Medicines Amendment Bill — In Committee 
[Volume:642;Page:11946] 
Agricultural Compounds and Veterinary Medicines Amendment Bill 
In Committee 
Part 1Amendments to Parts 1 to 3 of principal Act  
Hon DAVID CARTER (National) 
: 
 I am grateful for the opportunity to start the debate on Part 1 of the Agricultural Compounds and Veterinary Medicines Amendment Bill in its Committee stage. Of course National is supporting this legislation. 
When the bill was reported back to the House last week National was certainly critical of the Minister. I know that the Minister was a little offended by that criticism but I guess her hide has thickened up over the last 24 hours with the Clint Rickards story in the paper. We had every right to be critical and our criticism was not around the content of the bill which has now been well and truly tidied up by the Primary Production Committee. 
Darren Hughes 
: An excellent committee! 
Hon DAVID CARTER 
: That is a very good compliment coming from the Government side of the Chamber and I thank Mr Hughes for acknowledging the excellent work of the Primary Production Committee on this particular legislation. 
The point National was making about the Minister was that we would have expected better from an experienced Minister such as the Hon Annette King in getting the legislation into a tidy form before handing it to the select committee in the first place.  
Hon Mark Gosche 
: What a lazy member! 
Hon DAVID CARTER 
: Now Mr Gosche is interjecting and accusing Annette King of being lazy! That is a most unfortunate remark. I know things are difficult within the Labour caucus but Mr Gosche is suggesting that Annette King is lazy. I would not have gone as far as that; I would have said that she was just busy with other portfolio interests and that perhaps she had not given enough attention to the Agricultural Compounds and Veterinary Medicines Amendment Bill before it came before the select committee. Anyway as Darren Hughes politely acknowledges the bill has been tidied up well and truly to the satisfaction of the House. 
The second point I was certainly criticising the Minister for was the length of time it has taken to get the legislation progressing through the House. The select committee did its job and reported back on 29 May. As far as I am concerned nobody within the Chamber is objecting to the legislation as is evidenced by the second reading debate that was held last week. It seems to me that if the Minister had been really on top of the case she could have gone to the Hon Michael Cullen as Leader of the House and done a deal to get this legislation on to the agenda significantly quicker than has happened. 
I will ask one or two questions just to make sure that the Minister is on top of the portfolio. I am interested in new section 8B to be inserted by clause 10 “Director-General may list as exempt substances generally recognised as safe”. I want the Minister to tell us whether that provision was included in the original legislation or whether it is a new provision. I think she is looking at the bill—it is probably the first time she has read it. 
Hon Annette King 
: There’s no need to be nasty! 
Hon DAVID CARTER 
: No I am keen to get an answer. I am very very keen to get an answer as to whether this provision was in the original Act or whether it has been brought in recently for the first time. Also I ask whether the Minister could give the Committee a bit of an indication of the sorts of substances she thinks will be eligible for such an exemption. After such a good job was done at the select committee we do not want to find now that the exemption provision is a means by which there will be too much of a relaxation of the standards that have been set. If the Minister is ready to take a call on that point I would be very grateful to receive her response. 
SHANE ARDERN (National—Taranaki-King Country) 
: 
 I rise in support of the Agricultural Compounds and Veterinary Medicines Amendment Bill as well and I would like to pick up on a couple of issues. I know that the Primary Production Committee chaired by our very able colleague the Hon David Carter did a very fine job in giving close scrutiny to the detail of this bill but a couple of issues should be fleshed out a bit in the debate here in the Committee stage. 
One issue is around data protection which is covered in the commentary on the bill. I am led to believe that the substantive part of the debate on that issue was outside the scope of the bill. So I am flagging for the Minister that perhaps at some stage in the future some consideration may be given to the issue of data protection. The reason for this is that concern was raised in the Primary Production Committee about the period of time—the 5-year period of time—for which new medicines that are introduced into New Zealand have protection before that protection falls over. It was submitted that that length of time perhaps is not in keeping with international jurisdictions or international practice and therefore some compounds or other medicines that could be beneficial to our agriculture may not find their way to New Zealand. 
We should bear in mind that agriculture is the biggest industry in this country—a very important industry that is often dusted over lightly by Labour and by Parliament in general—and that animal remedies are a very significant part of that industry. The fact is that we may inadvertently have the unintended consequence that some helpful remedies may not be finding their way to this country due to the amount of investment in intellectual property and there is concern that if those remedies are brought to this country it will become public knowledge long before the investment in this high-level technology can be properly realised. I know that the Minister is going to take a call and she may want to mention that. 
The other issue that some submitters raised as a concern was the whole issue of compliance costs. I am pleased to see that the committee in its recommendation said that because of the one-stop shop process that is now in place the argument around cost of compliance really did not hold much water. I am pleased to hear that because whenever one sees regulation or legislative change around medicines particularly animal remedies there tends to be a belts and braces approach used by officials—and I acknowledge the officials’ presence in the Chamber—and they tend to take a very cautious approach and rightly so to whatever remedies are out there for farm animals. That can sometimes put on a whole layer of compliance that is unnecessary. 
I see that the Primary Production Committee recommended a change from “prescription” to “administer” which is a very good amendment by the committee. I understand the complexity of that issue and the arguments of some groups—and I will not mention them—that clearly have a vested interest in making sure that they are the only ones that can be involved in prescribing drugs or in guaranteeing that those drugs are allocated in the correct way. Of course that adds substantial costs in some cases to the whole process. So I am pleased that the select committee picked up on that point and I am pleased that its recommendation was that those changes take place. 
I also say that as we move forward in the technological age that we are in at the moment some of the very sophisticated technology that is being applied to animal remedies as is the case in the health sector is being done in an ongoing and very fluid set of circumstances. So I imagine that this is not the only amendment that we will ever see being made to this particular Act and I suspect that further amendments will be made in the not too distant future. At that point I would seek the Minister’s assurance that the issue of data protection and the length of the period of data protection will be addressed. 
ERIC ROY (National—Invercargill) 
: 
 As a member of the all-famous all-knowing Primary Production Committee I certainly would like to take a call on what I consider to be quite significant legislation. It is not significant because it does anything extraordinary but it does lock in some security around the whole aspect of assurance and safety and that is crucially important to us. As Shane Ardern said this is New Zealand’s biggest industry certainly in terms of exports agriculture and primary production. It is important that we can have some assurance for those people who want to purchase or whom we persuade to purchase our products. So we have the Agricultural Compounds and Veterinary Medicines Amendment Bill.  
It is just pertinent I think to note at this time that across the diversity of what happens in primary production and what happens in agriculture there is an absolute plethora—a humongous number—of elements compounds chemicals and medicines that actually fit into this bill. Across traditional organic and biodynamic production—across every form of production there is—there are inputs that go into the production system. In fact I am looking in this New Zealand Food Safety Authority document  
Agricultural Compound Residues in Food 
 and I see that it states: “There are at least 500000 identified natural chemicals that are present in all foods”. By nature of our production systems we require inputs into those systems—we need to lift fertility and we need herbicides fungicides and pesticides. There are a lot of things that are needed in the system. So as I said it is important we have assurance.  
The bit I want to speak on is section 8C inserted by clause 10 which states that the “Director-General may approve agricultural compound as exempt in special circumstances”. We do not have to apply a rigorous application and approval system to every single thing that is out there. Many of these things are quite safe. We have been using forms of them since tillage and agriculture were first recorded about 4000 years ago and some of those remedies have been used since then. It is important that we actually reduce the cost of compliance and maintain the assurance. We need credibility we need integrity and we need to be able to do it in the most effective way and in the most cost-efficient way.  
I note that section 8C has a whole lot of prescriptive things where the director-general can as it were short-circuit the system. I am quite in approval of that because we simply need to get on with the business of doing what we have to do in terms of making available the most appropriate remedies additives and fertilisers that are available to agriculture—and by and large this bill does that. I have some concerns that the process can add some cost but certainly the will of those who have put this bill together is to maintain the assurance. My plea to them in this Committee stage today is that in the actual interpretation and effectiveness of this bill we have a process that does not add any more cost.  
One of the great dangers we have at a time when there is some prosperity particularly in the dairy industry is that we can get a little bit sloppy because there is enough juice in the system to be able to absorb some of those costs. If we get sloppy in times of good that has a serious impact when times are tighter. And tighter times will come. I hope they are a long way away; they certainly will not come under the next Government that is not very far away.  
We need to be quite vigilant about the interpretation of this legislation. We need to assure integrity in what we do but not apply costs that are going to impact on the agricultural sector. It is interesting to note that never before in the times of the consumerisation of our product has the consumer had such an influence. Today if one looks in the supermarkets one sees that there is more and more information and more and more traceability on products that are sold. So we need to be aware of that; we need to accede to that and apply this bill to our agricultural industry. 
Dr ASHRAF CHOUDHARY (Labour) 
: 
 I rise to speak on the Agricultural Compounds and Veterinary Medicines Amendment Bill in a very brief call. This is a bill that is supported by almost all parties I think and it is a very good bill. The Primary Production Committee did a lot of work on it. Frankly I was delighted with the amount of work the committee did in improving the original bill. It has made it much more user-friendly if you like.  
This is a bill about risk management in the use of pesticides and chemicals in the farming and forestry industries. It is very important that it is approved particularly—as the member on the other side said—in times of an expanding dairy industry when I assume there will be the additional use of chemicals and pesticides. So we have to be very careful that these chemicals that are used on our farms are used in a proper and appropriate way without causing any risks. 
This industry which is worth almost $400 million covers about 1000 pesticides and a couple of thousand other chemicals and compounds. It is important that all these chemicals compounds and veterinary medicines are covered in a proper way and that their use is safe so that they do not cause any risks to human and animal health. I am particularly pleased that this bill is ensuring that compliance costs hopefully are going to decrease. I am quite confident it will actually decrease the compliance costs and also that the regulatory control is in line with the risk management.  
With those brief words I commend this bill to the Committee. 
Hon DAVID CARTER (National) 
: 
 I just want to make one more comment on the two points that have been raised by my colleagues Shane Ardern and Eric Roy. I support them both. Shane Ardern was talking about this issue around data protection and then Eric Roy followed on saying that above all we need to maintain a firm hand on compliance costs and the costs of the products involved within New Zealand agriculture.  
The really interesting dichotomy with those two issues is around data protection. We had only six submissions on this legislation and from memory I think four appeared before the Primary Production Committee. All four raised the issue of data protection. I think the select committee was let off the hook a bit in that the whole issue was outside the scope of the bill so we were able to listen to the arguments and then were not able to take the matter any further.  
If we think about one of the most pressing issues facing New Zealand agriculture we will find that it is actually around resistance to anthelmintics—and to help Hansard out that is commonly known as drench resistance. Livestock within New Zealand are building up quite a resistance to the current three families of drenches and there has been a recent quite far-reaching announcement from an overseas country that it has found a fourth family of drench that could be available to break the cycle of resistance that is fast starting to impede agriculture. The interesting question then about a company trying to bring in new products such as this drench into New Zealand is it wants protection so that it gets a lead making it worthwhile to bring the product in and it gets a competitive advantage. It is natural business practice; one would expect it.  
In New Zealand we have data protection for 5 years and the select committee heard that in other jurisdictions—for example Australia the United States and in fact in most of the Western World—the amount of data protection is considerably more than 5 years. We were quoted 8 years and 10 years. I am aware that the Government is aware of the issue—though the Minister may not be—and it has put together an inter-Government committee to look at it which includes officials from the Ministry of Agriculture and Forestry the Ministry for the Environment and certainly the Ministry of Economic Development.  
But the real issue is making sure that we have a significant period of data protection available for companies to warrant bringing these new products into our market which is not the biggest market in the world. But as soon as we give this data protection it will inevitably mean that other competitors are not in the market. Suddenly as Mr Roy alluded to the costs of remedies will then go up to the farmers and farmers in New Zealand cannot have it both ways. 
 Obviously the cheapest way to get the product to New Zealand is to have as many people as possible able to bring it in for other people to be able effectively to “steal” the data protection and get that product copied or similar and out into the market as quickly as possible. That delivers the cheapest product to the New Zealand farmer. But the risk is that if we go that way then there may be countries that say New Zealand is too small a market and that they will not go through the rigmarole of trying to get a product into New Zealand because of there being other sizable markets where they would be better off devoting their energies.  
I will be interested as to whether the Minister wants to make a comment on those big issues that were before the select committee. We were spared the difficulty of having to work through and balance the two criteria because as Mr Ardern alluded earlier it was actually outside the scope of the bill. But it is still an issue either for this Government in its dying days or for the next National Government after the 2008 election. 
Hon ANNETTE KING (Minister for Food Safety) 
: 
 First of all I would like to thank the Primary Production Committee for the work it did on the Agricultural Compounds and Veterinary Medicines Amendment Bill. This committee has always been very harmonious in the way it has addressed issues on behalf of New Zealanders and my understanding is that it worked in its traditional way on this bill. I support the work of select committees in fact. Otherwise if they were of no value why would we have them? If we did not think select committees could add value why would we bother sending legislation that has been introduced to the House to them? 
We have seen with this bill that the Primary Production Committee did add value to the process. In fact it helped to improve the bill. So I was rather disappointed that the chair of that committee David Carter—whom I have a lot of respect for as a chairperson—turned it into some sort of political criticism of me. Obviously if one were a perfect person in a perfect world one would get every bill that was ever introduced to the House absolutely right and would never send it to a select committee. The fact that the select committee did some work on the bill and helped to improve it is an indication of how a good democracy works. So I was disappointed in the rather facile comments from the member in that respect. 
The other criticism David Carter made was that the bill took 4 months before it came back to the House for its second reading which was last week. We are now in the Committee of the whole House on the bill and I suspect we will have it finished by Thursday of this week. That means that the time it has taken from when it was reported back to the House to when it actually finishes will be 4 months. I think the member has a little bit of a memory loss about some bills that have been before the House. I do not because I have a very good memory and I know that under a National Government there were bills before the House that sat on the Order Paper for years. I also remember that under a National Government some petitions came before the House that were never looked at. So when I hear the bleating that it was 4 months before we finally got to debate the bill and pass it I think that those comments may have been made just for the sake of having something to say. I realise that Mr Carter was a little short of information for something to say. 
I also want to congratulate the New Zealand Food Safety Authority on the work it did on this bill. Although the select committee did some very good work on it I have to tell members and those who are listening that it was the officials of the Food Safety Authority who worked with the Primary Production Committee who brought to the committee’s attention areas where there could be improvement. In fact their suggested improvements to the bill resulted in their receiving an exceptionally complimentary letter from the Law Commission which wrote: “The impact of the actions by the members of NZFSA who were advising the select committee have been very positive. The select committee has taken the NZFSA officials’ advice seriously. Its report makes reference to the concerns raised by the Legislation Advisory Committee and recommended a number of amendments to address it.” So I think that what we have here is good work from the officials and from the Primary Production Committee and we are hearing that members in the Chamber believe we have a much-improved bill because of it. 
A number of questions were asked. Mr Carter asked whether any substances were generally accepted as safe in the original legislation. The answer is no. He asked whether the director-general was able to exempt an agricultural compound from the requirement to be registered in specific circumstances. The answer is yes. Another question asked about data protection. That issue was raised by two members then by Mr Carter in his last contribution. Mr Carter was quite correct when he said that the issue was considered to be outside the scope of the bill. I am informed that if we were to make amendments there would be amendments made to this Act but there would also need to be consequential amendments made to the Hazardous Substances and New Organisms Act. The officials advised the committee that work needed to be done on that and that quite wide consultation would be necessary. I suspect that means it is not a dead issue but would require consultation and additional work. 
Also raised was the issue of regulatory costs. I think we always have to be concerned about the costs we impose on business particularly our agricultural sector. I think we have to be concerned— 
David Bennett 
: It’s the Labour Party! 
Hon ANNETTE KING 
: I realise that Mr Bennett does not know a lot about this even though he has taken a seat where he is better able to promote his voice. He is sitting next to my very good friend who knows a lot about this bill and who no doubt would make a very good contribution. I suggest he gives Mr Bennett a little bit of advice on what the bill is about. 
R Doug Woolerton 
: I’ve been trying to do that. 
Hon ANNETTE KING 
: Well done Doug. The regulatory costs are an important issue. One of the things the bill does impose is an obligation to avoid redundant regulatory control. It makes it an express requirement to consider controls already imposed under other legislation such as the Hazardous Substances and New Organisms Act or the Medicines Act. We are not trying to duplicate things do things twice or add additional compliance to industry in this respect; we are trying to ensure that we have a sound regulatory framework for products that can be dangerous. So I thank members for their contributions on this bill. I think it has been positive and I thank them for the work they have done. 
ERIC ROY (National—Invercargill) 
: 
 I just want to pick up on a matter that none of the speakers so far has talked about. In doing so I also want to demonstrate a level of statesmanship to the Minister in this whole situation.  
I refer to this whole cost compliance thing. One of the submissions that the Primary Production Committee received quite a bit of pressure on arose over the matter of why there are two standards for what are called finished-dose medicines. A lot of the remedies we use for animals are exactly the same as those used for humans particularly in the area of antibiotics. Antibiotics used for stabbing into people require a very high level of regulatory approval. The safety assurance around that is high. Then the question arises—and it was asked by the submitters—as to why we have to go through a whole new range of regulatory processes such as those under the Agricultural Compounds and Veterinary Medicines Act and the Hazardous Substances and New Organisms Act for something that has already been approved for use on humans when we just want to use it on animals. Most people would think that a higher level was being required for something that was of a lesser status.  
The answer is quite simple. Again just to show a little bit of the complexity around the whole thing we consume animals and the impact when these remedies are ingested might be quite different from when they are applied as a medicine in whatever form—be it a pill or an injection subcutaneously intravenously intramuscularly or whatever. What we actually want some assurances around is knowing exactly what the impact is when these are applied to an animal what the withholding periods are and all of those things. That is why there is in some ways a higher test for animals than there is for humans. So in not short-circuiting that we are recognising the assurance aspect that we want to give to animal compounds particularly in the medicinal area when finished-dose medicines are used. 
Part 1 agreed to. 
Part 2Amendments to Parts 4 to 8 and Schedules of principal Act  
SHANE ARDERN (National—Taranaki-King Country) 
: 
 In supporting Part 2 of the Agricultural Compounds and Veterinary Medicines Amendment Bill I make particular reference to the powers that the director-general will be given by this part. Normally one would be a little nervous when one saw the wide-sweeping powers that will be given to that person—who is no doubt a very competent person. But in this case this is the exception. The reason for it being the exception is—as my colleague Eric Roy referred to just previous to my speech—that the kind of expertise and the speed at which technology and drugs are changing is such that we need a person with a very high competency level. We need a person with the department the officials and the advice that goes with the position of director-general. So in this case being able to give that kind of support to the director-general—and I am referring to the powers that the director-general will have and some of them he or she already has under the Agricultural Compounds and Veterinary Medicines Act—that is provided for in the amendments in this particular part of the bill is sensible in that regard. 
As I said earlier this is a large industry that is very dependent upon being competitive internationally. It is very dependent upon being able to have traceability of the products that we sell in the international market. What makes New Zealand unique is that we export in some industries up to 95 percent of what we produce whereas other jurisdictions around the world consume 95 percent or 100 percent of what they produce and import products from countries like New Zealand. So being able to go out into the marketplace with absolute surety about what we are doing and what we are putting into that which becomes food product through the animals themselves is important. It is something that needs a much higher level of scrutiny to what one would expect even in human health and human medicine because of the market demands around food safety. We have seen a bit lately in recent media about the safety of different products being imported into countries particularly the US from parts of the world where they do not have the same standards that we have. 
As we move further down the track of DNA traceability and are able to trace back to the source of product this will become more and more of an issue. Some of the technology that is being employed some of the market sophistication now is such that I am not sure whether New Zealand will be able to keep up on its own with what is almost a flood of demand coming our way. Having a person of the competency level that we would expect the director-general to have in a position to be able to make those decisions or at least to have an overview of those decisions and give advice to the Minister is essential in this particular Act. I say well done once again to the members of the Primary Production Committee for their work in regard to that. 
I also make reference to the relationship of this bill to Acts other than the principal Act. As I have said the bill makes reference to the Wine Act. Of course the wine industry is a growing industry in this country another major exporter and another industry that exports a high percentage of what it produces as opposed to having it consumed domestically—although the percentages are not as high in that industry as they are in our other more traditional primary industries. That is also important and I thank the committee for the work it has done on clause 48 and the amendments it has made in regard to that. The bill also has reference to a number of other Acts like the Meat Act the Dairy Industry Act and a number of others. I thank the committee for the work it has done on that. 
Just in closing I touch on one point. The Minister for Food Safety Annette King in reference to the bill said that the time it had taken had been by parliamentary standards pretty short. I agree; that is absolutely so. Maybe she might like to inform the Committee when the Conservation (Protection of Trout as a Non-commercial Species) Amendment Bill might make it on to the floor of the House so that it can be processed in a timely way—given that this Government is in the mind to get things processed in a timely way. I suggest that perhaps poor old David Parker who is now probably about the 15th Minister to have his name beside that legislation might want to bring it to the House so it can be properly debated. 
NATHAN GUY (National) 
: 
 I take a call on Part 2 of the Agricultural Compounds and Veterinary Medicines Amendment Bill. There will probably be a few cockies around New Zealand who are listening to Parliament and hosing out their cowsheds as we speak and they will be interested to know that National is supporting this bill. In essence the legislation is a bit of a tidy-up as a result of reviews carried out in 2001 and 2004 and the bill pulls all of that work together. National is supporting that. 
Fundamentally the thing that is of particular note is that there is a 3-year review of the compliance costs around this bill. That will be very very important as we look forward. Although the officials have told us—and the Minister Annette King has as well this evening—that there will not be too many issues around compliance costs I think it is very important to have that 3-year review so that we can see how this rolls out. 
As the Minister will know this bill will have an impact on veterinarians around all of New Zealand. The Minister has been in front of our Primary Production Committee in the past. Of particular concern to rural New Zealand and a lot of farmers is the shortage in the number of veterinarians coming out of Massey University. The Minister’s department has been all over the world trying to attract veterinarians into New Zealand. This is really really important because at the moment we are unable to train enough. Farmers will be interested to know that it costs about $10000 per vet—if my recollection serves me correctly—to attract overseas veterinarians into New Zealand. Surely we need to do more promotion in order to ensure that we attract students to take up veterinary science at Massey University. 
We have also heard this evening about the data protection and how that was outside the scope of this bill. In the Primary Production Committee we heard from submitters who were able to tell us that around different parts of the world data protection is available for 8 and 10 years. I am pleased to know that a group is looking at this issue because I think it is fundamentally a very important part of this bill. I think that the Ministry of Agriculture and Forestry the Ministry of Economic Development and the Ministry for the Environment are involved in looking at the issue. 
The other issue that I touch on is this fourth drench family that will potentially—when it comes into New Zealand—come through this bill as well. This is of great significance to farmers throughout New Zealand. Currently we have three drench families. There is a thing called drench resistance—so the parasites are building up resistance over time to drench families—and the fourth drench family that will hopefully arrive in New Zealand at some time soon is forecast to return about $100 million to the farm gate. 
In summary National is supporting this bill. It is a bit of a tidy-up to provide a one-stop shop. We look forward to seeing it roll out and we will be watching with interest over the next few years to see what impacts the legislation has on any compliance costs. 
Part 2 agreed to. 
Clause 1  agreed to.  
Clause 2  agreed to.  
Clause 3  agreed to.  
Bill to be reported without amendment presently. 
House resumed. 
The Chairperson reported the Health (Drinking Water) Amendment Bill with amendment and the Agricultural Compounds and Veterinary Medicines Amendment Bill without amendment. 
Report adopted. 
Sitting suspended from 6 p.m. to 7.30 p.m.