Roy Eric: Meat Board Amendment Bill — Second Reading 
Roy Eric: Meat Board Amendment Bill — Second Reading 
[Volume:633;Page:4660] 
ERIC ROY (National—Invercargill) 
: 
 I wish to take a call on the Meat Board Amendment Bill too and it appears to me that the Primary Production Committee has done its job. Some issues need clarifying and it is important that that is done for all sorts of reasons. I will make some comments about the meat industry in the first instance because I think this is a salient time to remind the House of one or two pertinent facts. 
 I acknowledge at this time those farmers particularly in South Canterbury the Wairarapa Wanganui and the East Coast of the North Island who are currently involved in the arduous task of competing with the elements at a crucial time in the cycle of the meat industry—that is either lambing or just before lambing when the risk of metabolic disorders and diseases is high and farmers are working in inclement conditions. They are absolutely committed to doing their best for themselves and the big gainer from that is the New Zealand economy. 
On that point I wish to make one or two comments. Since I came back to the House I have watched the Labour Government members just about falling on their faces from self-congratulatory pats on the back at how well they have done on the economy. But in reality the economy has done well because the people who provide the bulk of our export income—namely the farmers—have stuck to their knitting in spite of being told under a previous Labour Government that theirs was a sunset industry and it was time they moved on. 
In the mid-1980s the price we were getting for lambs was about $13 and we could not sell a ewe for profit unless it was an extraordinary ewe. So we donated them to the Labour Party. We sent them off so that the bill went to the Labour Party in order to give it some appreciation of what it had done. At that time I wrote to Mr Peter Neilson who was then the Parliamentary Under-Secretary to the Minister of Trade and Industry. He had said that if farmers could not make money from meat—from lamb—then they ought to do something more productive. So I wrote to him and asked what I could do. I described my property which was largely pastoral. The topography meant that it could not be used for arable farming and some constraints about dairying meant that I could not do that. I was really locked in. 
I did not get an answer from Mr Neilson. Yet that administration was saying that the meat industry was a sunset industry and that we should forget about it and do something else with our land. I suppose I could have planted it with trees and had my carbon credits stolen. I do not know what I would have lived on in the meantime. My point is simply that farmers have stuck to their knitting and what they are doing they are doing very very well. Today they produce a prestige quality product. 
We now come to the issue of how we manage that prestige quality product. Essentially New Zealand is very fortunate because for a whole lot of reasons it has access to the best-paying market in the world: the European Union. I have not seen the figures and I do not know whether they have changed but we used to send 226000 tonnes equivalent of bone-in carcass into that market. The next biggest player at the time when those figures were current was Australia with 17000 tonnes. That is a huge advantage for us. 
Here we need to note three significant points. The first is that the quota rents the value of that market belongs to New Zealand—to no one else. The second point is that the quotas are protected by statute—and what we are doing now is providing a bit of clarification around the statute process that protects them. The third point is that those quotas are allocated by the industry largely through the Meat Board. Those are the three fundamental issues at stake here. 
This bill provides a bit of clarification about the issue of allocation. We will always have dispute between the players as to who should get what where it should go and who should get the advantage from it. We have quite a mix of players from very very big players to some very small players and some aspirant players who want to get in to the market. So we need an element of tradability. That is an issue the industry should sort out not parliamentarians who would get it wrong in picking winners. We probably need to have 2 percent 3 percent or a lower order of quota traded every year in order to provide opportunity and to allow transition to take place. It is important that we have new players—that we have an opportunity for innovators to expand or to come into the market. That is crucial. 
The quality product we are producing is delivered in a range of ways. We have seen a huge shift from the frozen stockinet all-in carcass to the range of products—fresh pre-cut frozen and chilled atmosphere packaging technology—that the industry now produces. It has moved significantly upmarket. Its product used to lie around the bottom shelves of the supermarket. That product is now pretty close to the top shelf in most European markets. That is because there is now an absolute commitment to produce an excellent high-quality product. 
It is interesting to note that in the days when all the support systems were pulled out and the price of lamb dropped from about $25 or $30 down to $12 or $13—which is hard to believe now—we had 70 million - odd sheep. I do not know how accurate the count was but it was around 70 million. Today we have somewhat fewer than 40 million as a winter population—between 37 million and 39 million I guess—and we are producing the same quantity of meat from those sheep. That has happened because we have seen huge gains in productivity. We have seen huge gains in fertility—up about 25 percent in the last 15 years—increases in the weight of lambs and increases in the yield of lambs. That is what has given us a similar volume of meat today. 
We have a product that continues to advance. It is an exciting time to be producing lamb and sheep meat. Not only has the prestige of the product improved but also nothing else in the primary production sector has had such significant production gains. And there is no reason to say the gains will stop here. With gene mapping and a whole lot of other things out there the parabola of growth—the diagram that shows a parabola of growth spurt—is still on the up. 
This is an exciting time. We have an industry that is performing exceptionally well on the production side and we want the other side—the product development marketing and branding side—to continue the growth gains we have seen. As I said initially the important thing is that we manage the best-paying quota market in the world. We probably would prefer that it not be a quota market but it is and fortuitously we are the biggest player in it. I stress again the important issues: that the quota rents belong to New Zealand that they are protected by statute and that the allocation is the responsibility of the industry. 
I conclude by coming back to the points I made earlier about the Labour Government which is still congratulating itself on its performance. It is farmers who have stuck to their knitting in spite of the adverse climate conditions that I have talked about and in spite of being instructed by a previous Labour Government to get out of farming who have brought about the prosperity this country now enjoys. Brock Waterfield kind of summed it up in this statement: “A nation cannot prosper till it learns that there is as much prosperity in tilling a field as there is in writing a poem.” 
The Government needs to recognise the contribution of provincial and rural areas and particularly of the people who are out in the snowfields and mud paddocks right now creating the prosperity and wealth of this country.