New Zealand Executive Government Speech Archive

My congratulations to the New Zealand Deer Farmers' Association for promoting the concept. My congratulations, also, to the South Canterbury/North Otago branch for your hard work in the organisation of this event. Not only will the two days make an important contribution to your fund-raising for the "Focus Farms" research project. Perhaps more importantly, the expo gives people a chance to get together to share ideas for further research, further technical innovation and further market development.

When he appointed me Minister of Agriculture, the Prime Minister set me the task of trying to get the sector to focus rather more keenly on marketing. He wanted me to encourage the sector to think more innovatively about how to extract greater value for our primary products from the international marketplace. He reckoned my experience marketing dairy products in Central and South East Asia would help.

Well, I'm determined to live up to the task set for me. But I would forgive you for finding it a little ironic for a beef farmer to presume to talk to deer farmers about marketing. In comparison with beef, yours is one of the success stories of New Zealand agriculture.

It now seems difficult to believe that when I was studying agricultural science at Massey University, there wasn't really a deer industry in New Zealand. There was some activity in the 1950s, but it wasn't until 1969 that deer farming became legal. That's less than 30 years ago.

Since then, the industry has been through its ups and downs. But, New Zealand is now the biggest exporter of venison in the world. We're by far the biggest supplier of velvet to the lucrative market of South Korea. Only 12 years ago, we didn't export any velvet to Korea. In all, deer industry exports now exceed $200 million fob per annum.

Yours is an innovative and enterprising industry. With the early speculators now having moved on, the deer industry is seeing the long-term investment it needs to keep moving forward. Your branding and marketing strategies are examples to others in the agriculture sector.

The rise of the deer industry coincided with changes in consumer preferences for meat. Since the 1980s, beef's share of total meat consumption has fallen sharply. There has been a trend towards cheaper meats. Changes in labour market participation and life-styles have increased demand for more versatile meat products and those requiring less preparation time. People have sought meats which they have perceived to be healthier.

Chicken has been the chief beneficiary of these changes in demand. My personal preference for beef is matched only be my admiration for the way the poultry industry has responded to changes in consumer preferences, and has marketed its products so effectively.

There has also been a trend towards so-called "exotic" meats, partly as a result of increased international travel. The venison industry has been able to exploit almost all these trends. It's perceived to be healthy. It is easy to prepare. And it fits into the "exotic" meats category. The Game Industry Board has taken advantage of changes in consumer preferences. The challenge is to keep that going.

The "Cervena" and "Zeal" programmes are exactly the sorts of approaches we need to see elsewhere in the agriculture sector. They focus on quality from pasture to plate. They involve on-farm quality assurance, accreditation of road transport carriers, and standards setting for exporters and wholesalers.

The focus on quality assurance means that buyers overseas can have confidence about what they are buying. It means that when a consumer orders the product from a restaurant, that consumer has a high degree of certainty about the quality of product that will turn up on the plate. That is critical in order to build loyalty from overseas retailers and consumers.

I'm pleased that already 330 farms have been accredited, along with 90% of deer transport companies. Almost all large processing companies in the industry are involved. They complete regular audits and meet the ISO 9001 standard. I'm looking forward to seeing the "Cervena" and "Zeal" programmes go from strength to strength.

The industry is also investing in research. Since the 1970s, meat prices, in general, have trended downwards. Ever-better marketing has helped off-set those reductions. But more efficient farming and genetic improvements have also been critical. They depend on research.

Already, genetic gains have been made in the breeding of deer. But this is a relatively new industry. I suspect the gains so far are only the tip of the ice-berg of what is possible. Research - such as the "Deer Master" programme this expo is in aid of - will help speed those gains. And the "Deer Master" programme will also help identify improvements which can be made in farming strategies.

So the venison industry already has the elements of success I'll be trying to urge on others in the sector - a pasture to plate approach to marketing and ongoing research into the ever-more efficient production of the product the market wants.

And after the disaster of Fortex, there are positive developments in bringing more stability to the processing side of the industry - along the lines I would like to see in other sectors. I'm impressed with what I hear about the new Mountain River operation. Throughout agriculture, we need to see stronger, long-term relationships between farmers, companies and customers. Only if companies have security of supply from farmers, can they offer security of supply to customers.

What all this means is that the deer industry is well-placed to take advantage of a world market which is likely to remain positive.

World supply of venison is likely to decline slightly in the short-term. But demand for New Zealand venison is likely to increase. Your marketing activities are improving awareness and you may also benefit from concerns in Europe about beef. Venison prices have risen and are expected to continue rising. As a result, the national deer herd - which fell 6% last year - is expected to increase again in 1996.

The outlook for velvet is also positive. The harvest is forecast to increase 6% to 660 tonnes. Weighted-average prices should remain at around $100/kg. Changes to the Korean regulations have caused uncertainty. But I know that the Game Industry Board is positive about the potential impact of the changes. There is already talk about marketing velvet as an extract. And potential growth in both the Chinese and the western markets also make the outlook for velvet positive.

To top it off, returns from skins, hides and other co-products are also expected to improve in the year ahead.

This is the first year that the Deer Farmers' Association has been funded through the Commodity Levies Act. I know that has been controversial in some quarters, particularly here in the South Island. The levy provides the association with certainty of revenue for its activities, at least for five years. That enables it to invest with more confidence in the development of the industry. The levy is being used for research, industry promotion, representation and the provision of information to members. It cannot spend any levy money for any purpose that is not approved by the association's AGM. And if it wishes to continue with the levy after the five-yearly review, it will need to ensure it takes careful heed of the views of members in all its investment decisions.

You also pay levies to the Game Industry Board, and I think you have seen a fair return from that investment over the years. One factor that will determine the extent of those levies in the future is your contribution to the eradication of Tb.

I know there is some debate between the cattle and deer industries about the relative contribution of each. The issue will need to be resolved as we develop the Pest Management Strategy. Unfortunately, its development depends on passage of the Biosecurity Amendment Bills. I've told MAF I see that as a major priority. One of the bills is currently before the select committee and the other should be introduced shortly.

But that does not obscure the fact that the Government will also need to continue contributing funds, particularly in continuing to supporting research. Right now, the Government is giving consideration to continuing to support the research programme aimed at developing new cost-effective biological control methods for possums.

We spend about $35 million annually trapping and poisoning possums, and that cost is increasing. We'll always need to use a range of approaches to control possums, but biological control offers the greatest hope of cost-effective long-term control.

In 1992, the Control of Possums and Bovine Tb National Science Strategy Committee identified the need for a programme to address biological control. And in 1993, the Government agreed to fund the programme to the tune of $2 million a year for three years. We're looking at possible further funding.

The programme has already made progress over the last two and a half years. We've been searching for parasites and pathogens in possums both here and in Australia. The best known progress has been the discovery of "Wobbly Possum Syndrome" which was found in possums at Invermay. It's thought to be due to a virus. Work is continuing to clarify its role and the extent of its potential as a biocontrol for possums. Welcome progress has also been made on developing understanding of reproduction, lactation and embryo development. An immuno-contraceptive is now seen as a distinct possibility within five years. Details of any further funding will be announced in the Budget.

Rabbit control is also a major priority. Depending on the final round of research in Australia, and the work of the applicant group, we may well be in a position to introduce RCD this spring. For those of you struggling with rabbits, all I can do is urge you to be patient. It is essential that if and when RCD is released, we do it strategically. A premature release could mean it would kill less rabbits.

The Government is acting to assist the agriculture sector with initiatives such as these. But the real action, as it should be, is with the industry itself. My predecessor, John Falloon, was a great supporter of the deer industry. I too have great admiration for the progress the industry has made since 1969. I look forward to meeting with you and working with you through the next phase of your development. And I also hope to get my beef industry to offer you a little stronger competition. All the best for this deer expo.

I think it is an excellent concept. I look forward to attending similar events in the future as your Minister of Agriculture.