Priority – Medium
Security Level – In Confidence
To: Hon Nicola Grigg, Associate Minister of Agriculture
From: Sothea Tep, Manager Horticulture Sector Policy
Interview with Rural News, 30 July 2024
Date 29 July 2024
Reference
AM24-0745
Purpose
•
This aide-memoire provides notes for your interview with Peter Burke of Rural News
on 30 July 2024 about your horticulture portfolio priorities.
•
This aide memoire has included:
o
Appendix One: Brief biography of Peter Burke;
o
Appendix Two: List of Government priorities for horticulture; and
o
Appendix Three: Suggested talking points.
Minister / Minister’s Office
Seen / Referred
/ / 2024
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Appendix Two: Sector overview and Government priorities for horticulture
Sector Overview
1. The horticulture sector is forecast to have total export revenue of $7.1 bil ion (including
wine) in the year to 30 June 2024 and projected to achieve $8.0 bil ion to the year
ending 30 June 2025.
2. The sector employs over 75,000 people in our regions (during peak season).
3. Harnessing opportunities to grow the sector wil be an important part of the
Government’s goal to double the value of exports within ten years.
Workforce, education, and skills
4. The Government is commit ed to increase the cap of workers under the Recognised
Seasonal Employer (RSE) scheme and increase the flexibility of the quota allocation
system, to ensure the sector has access to the necessary workforce at peak times.
5. The scheme came into effect in April 2007, and alongside the industry, experienced
significant expansion. From annual export earnings of approximately $2.5 bil ion then
to over $7 bil ion now, and a 5,000 RSE worker cap at inception to a cap of
19,500 RSE workers now.
6. The scheme is often referred to as a triple win for employers, workers, and Pacific
Nations (from which the workers originate). It is important that the integrity of the
system is maintained, is efficient, provides certainty for employers and workers, and
supports the sector to grow and increase productivity.
7. The Government has committed to change the structure for vocational education and
training. A key goal is improving regional autonomy and responsiveness, supporting
stronger connections between the vocational education and training system and local
communities, industries, and labour markets. This wil improve education and training
for the sector.
8. It is a Government priority that the vocational education and training system wil
include pathways for New Zealanders to obtain the skil s that are in demand in the
under the Official Information Act 1982
primary sector, including in the horticulture industry.
9. Work is already underway to disestablish Te Pūkenga and consult on a proposed
replacement model. Hon Penny Simmonds, Minister for Tertiary Education and Skil s
has indicated she wil put forward a model to reform Te Pūkenga to Cabinet before the
end of July.
10. A review of the science and university systems is also currently underway with
Released
advisory groups established for both, chaired by Sir Peter Gluckman.
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Appendix Two
11. The University Advisory Group has been set up to provide the Government with
advice on the challenges and opportunities in New Zealand’s university sector,
including funding mechanisms and delivering graduates that address national
workforce needs and challenges.
12. Access to drivers’ licences and public transportation in rural communities is variable
and inconsistent throughout the year and across seasons. This in turn can have an
impact on how local people can get to jobs in the horticulture sector.
Resource Management Act 1991 (RMA) Reform
13. The Government has committed to reforming New Zealand’s resource management
system to make it easier to consent new infrastructure, allow farmers to farm, get
more houses built, and enhance the food and fibre sector while achieving good
environmental outcomes. Any shifts towards less regulation for rural farming
communities could assist in increasing export values.
14. The work programme is currently in Phase Two, which includes:
a) the Fast-Track Approvals Bil . The Environment Select Committee is due to
report back on the Bil by 6 September;
b) two RMA amendment bil s. The first amendment Bil (Resource Management
(Freshwater and Other Matters) Amendment Bil ) is currently being considered at
Select Committee; and
c) a national direction amendment package.
15. The second RMA amendment bil wil focus on urgent changes to enable housing
growth, infrastructure, and introduce emergency response regulations along with other
coalition commitments. The national direction package is aimed at amending,
reviewing, and developing current and new national direction instruments to unlock
development and investment in infrastructure, housing capacity, horticulture,
aquaculture, forestry, and mining.
16. The Government will make announcements on the second amendment Bil and the
National Direction package by the end of this year (see below for more detail on the
proposals for highly productive land and freshwater changes). There wil be an
opportunity for public input in this process next year.
under the Official Information Act 1982
National Policy Statement for Highly Productive Land (NPS-HPL)
17. The NPS-HPL protects highly productive land for use by land-based primary
production from inappropriate subdivision, use and development.
18. Officials are progressing the amendments consulted on in 2023 that wil provide a
clear consent pathway for intensive indoor primary production, greenhouses, and
specified infr
Released astructure such as solar farms to develop on highly productive land.
Subject to Cabinet consideration, the amendments wil likely take effect in the third
quarter of 2024.
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Appendix Two
19. The Government has also committed to amending the NPS-HPL to better enable
housing development whilst appropriately managing highly productive land. These
amendments wil be delivered through Phase Two of the RMA reform programme.
There wil be an opportunity for public input in this process next year.
Water
20. The Government has announced it is reviewing and replacing the National Policy
Statement for Freshwater Management 2020 (NPS-FM) this term, to better reflect the
interests of all water users.
21. Water is an essential resource for horticulture. There are growing challenges with
water availability and security, particularly as droughts become more frequent and
intense due to climate change.
22. The Government wants to enable small- and large-scale water storage infrastructure.
We have asked officials to explore options for enabling activities such as on-farm
water storage which support economic and environment goals
Enabling vegetable growing
23. As part of the Resource Management work programme, we wil also be considering
how to better enable vegetable growing in the resource management system.
24. We need to be able to grow enough fresh fruit and vegetables to meet our needs, and
support our growers to do so, while at the same time protecting our water quality.
25. Vegetable growers are regulated differently across the country and in some regions
face challenges in obtaining resource consents and undertaking normal practices like
crop rotation.
26. Ministers have asked officials to explore options to enable vegetable growing under
NPS-FM review. This is part of the broader RMA reform programme.
Freshwater farm plans
27. Freshwater farm plans (FWFP) wil enable farmers and growers to find the right
under the Official Information Act 1982
solutions for their farm and catchment. Growers consider the current system too
complex, so the aim is to simplify and improve the freshwater farm plan system.
28. The horticulture sector would like existing environmental programmes to be
recognised in the freshwater farm plan system, and the Government is looking at ways
to integrate existing farm environment plans or industry assurance programmes (such
as the Good Agricultural Practice schemes) in the system.
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Appendix Two
29. On 10 April 2024, Hon Todd McClay, Minister of Agriculture and Hon Andrew
Hoggard, Associate Minister of Agriculture announced their intention to improve the
FWFP system. As part of this work, the development of an enduring and effective
FWFP system will prioritise:
a) reducing regulatory burden by creating integration pathways for existing farm
environment plan initiatives and industry assurance programmes;
b) providing farmers with greater flexibility to find the right freshwater management
solutions for their farm and catchment area;
c) enabling catchment level solutions and empowering local communities to lead
freshwater farm planning;
d) reviewing FWFP certification and audit requirements to reduce unnecessary
cost;
e) reducing duplication for farmers and growers; and
f)
further development of what ‘risk based’ wil mean in practice.
Genetic technologies
30. The Government is reforming gene technology regulation to enable the use of these
tools to deliver benefits for New Zealand, from producing sustainable, climate-friendly
food, and new technology to reduce climate impacts from production.
31. The new rules will be fit-for-purpose, future-focused, and designed to accommodate
advances in gene technologies and methods.
32. Policy design has begun, and a Bil to allow for greater use of gene technology is
expected to be introduced by the end of this year. Legislation for a new regulatory
system for gene technology is expected by August 2025.
33. A vital part of this work wil be ensuring strong protections for human health and the
environment, and ensuring any work is safe and ethical.
Agrichemicals
34. The Government has recently announced a regulatory sector review on the approval
process for new agricultural and horticultural products, with the aim to reduce
regulatory burden on the sector.
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Appendix Two
Appendix Three: Suggested Talking Points
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Appendix Three
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Appendix Three
Priority – Low
Security Level – In Confidence
To: Hon Nicola Grigg, Associate Minister of Agriculture
From: Sothea Tep, Manager Horticulture Sector Policy
Meeting with Ian Proudfoot (KPMG) – Sharing insights on KPMG
Agribusiness Agenda 2024
Date 31 July 2024
Reference
AM24-0729
Purpose
•
This aide-memoire provides you notes for your online meeting with Mr Ian Proudfoot
of KPMG on 7 August 2024. He has requested this meeting to discuss KPMG’s
Agribusiness Agenda 2024 report and to seek your views on the issues covered in this
report and your priorities for the horticulture sector
•
Attached to this aide-memoire are:
o
Appendix One: Brief biography on Ian Proudfoot;
o
Appendix Two: KPMG’s ‘Agribusiness Agenda 2024’ findings;
o
Appendix Three: Government’s priorities for the horticulture sector; and
o
Appendix Four: Suggested talking points for your meeting.
Minister / Minister’s Office
under the Official Information Act 1982
Seen / Referred
/ / 2024
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Appendix Two: KPMG’s ‘Agribusiness Agenda 2024’ findings
1. The Agribusiness Agenda 2024 is a report that presents the findings from KPMG’s
annual Agribusiness Leaders Priority Survey, alongside insights from over 150 food
and fibre industry leaders who have contributed their insights and perspectives on the
issues facing the sector. The theme for the 2024 Agenda was ‘
Today’s potential,
tomorrow’s possibilities’.
2. The industry leaders’ contributions were collected through:
a) six online roundtable sessions, attended by 93 invited industry leaders to share
their top-of-mind issues;
b) one online session with 17 members of the Emerging Leaders cohort (brought
together for last year’s KPMG Agenda); and
c) annual Industry Leaders Priorities Survey, which received 107 valid survey
responses.
The 2024 Agenda’s findings on Today’s potential, tomorrow’s possibilities
From the above meetings and survey, KPMG distilled the following themes
3. Today’s potential:
a) support industry leaders to build confidence in their industry;
b) need good farm management practices and hygiene standards for biosecurity;
c) regulatory environment that supports business success, not over regulation;
d) trade and market access actions to continue and create value;
e) welcome international investors who buy into building a better New Zealand;
f)
we can’t continue with unenforceable and foolish biotechnology rules; and
g) industry leaders to value the next generation of employees.
4. Tomorrow’s possibilities:
a) address consenting rules to give confidence to investors;
b) industry leaders must continue to focus on climate transition;
c) all interested parties must have skin in the game for investment in science;
d) costs of providing services to improve how they manage nature are increasing;
under the Official Information Act 1982
e) build confidence that AI tools are about creating better outcomes for all; and
f)
concerned about cost and security of energy, and electricity infrastructure.
Findings of industry leaders survey
5. As shown in the following Table One, the KPMG 2024 Agribusiness Agenda survey
has identified biosecurity as the number one priority for our food and fibre sector
Released
leaders, the same as for 2023.
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Appendix Two
6. Biosecurity is followed by “act on the results of gene editing discussions”, which has
jumped from sixth ranking in KPMG’s 2023 report. The report notes that this only
jumped into the Top ten in 2023 as knowledge about the potential benefits of gene
editing technologies are becoming more widespread.
Table One: Ranking of actions in KPMG’s 2024 survey of sector leaders
Ranking
Priority Action
1st
World class biosecurity
2nd
Act on results of gene editing discussions
3rd
Sign high quality trade agreements
4th equal
Invest in resilient rural infrastructure
4th equal
Broadband equality for al
6th
Public/private mission science partnerships
7th
Build water storage to manage resources
8th
Develop resilient supply chains
9th
Maximising sustainable use of oceans
10th
Maintain immigration settings
7. The report adds that the mainstreaming of this topic in 2024 gives a clear message
that this is an issue we should resolve and act on sooner rather than later. Sector
leaders mentioned that countries that have provided regulatory certainty are seeing
the technologies mainstream, delivering better outcomes to producers, processors,
and consumers. At the same time we need to be careful not to move too far ahead of
our markets and customers.
8. In the 2024 KPMG leaders survey, the two new entries that moved to the Top ten
(both making a return after a one-year absence) were:
a) building water storage infrastructure (ranked 7th, up from 16th in 2023), to support
growth and to deliver greater resilience to the environment and the sector; and
b) developing resilient supply chains (ranked 8th, up from 12th in 2023), as the
sector deals with the disruption caused by droughts in Panama, conflict in the
Middle East and accidents including the incident in Baltimore harbour1 in the
United States early this year.
under the Official Information Act 1982
9. The Ministry for Primary Industries notes that maintaining immigration settings is
ranked tenth by primary sector leaders, whereas it could be expected to be ranked in
the top five if the survey was only of horticulture sector leaders. The horticulture sector
is highly dependent on migrant workforce, both under the Recognised Seasonal
Employer Scheme and Working Holiday Visa, for seasonal work like pruning,
harvesting, and packing.
Released
1 In March, a container ship crashed into one of the bridge's support pil ars, sending the ship into Baltimore
Harbor, six construction workers were kil ed and shipping and traffic was disrupted at the port. Replacing the
bridge wil likely take years, but authorities have since opened two temporary channels.
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Appendix Two
10. Similarly, access to productive land is not in the top ten for primary sector, but would
likely be in top five for horticulture sector leaders. Another item missing in the table,
but important for horticulture, is cost of doing business and in particular compliance
with all the regulations, including those under the Resource Management Act 1991.
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Appendix Two
Appendix Three: Government’s priorities for the horticulture sector
Workforce, education and skil s
1. The Government is commit ed to increasing the cap of workers under the Recognised
Seasonal Employer (RSE) scheme and increasing the flexibility of the quota allocation
system to ensure the sector has access to the necessary workforce at peak times.
2. The Government has committed to change the structure for vocational education and
training. A key goal is improving regional autonomy and responsiveness, supporting
stronger connections between the vocational education and training system and local
communities, industries, and labour markets. This wil improve education and training
for the sector.
3. It is a Government priority that the vocational education and training system wil
include pathways for New Zealanders to obtain the skil s that are in demand in the
primary sector, including in the horticulture industry.
4. Work is already underway to disestablish Te Pūkenga and consult on a proposed
replacement model. Hon Penny Simmonds, Minister for Tertiary Education and Skil s
has indicated she wil put forward a model to reform Te Pūkenga to Cabinet before the
end of July
5. A review of the science and university systems is also currently underway with
advisory groups established for both, chaired by Sir Peter Gluckman.
6. The University Advisory Group has been set up to provide the Government with
advice on the challenges and opportunities in New Zealand’s university sector,
including funding mechanisms and delivering graduates that address national
workforce needs and challenges.
Resource Management Reform
7. The Government has also committed to reforming New Zealand’s resource
management system to make it easier to consent new infrastructure, allow farmers to
farm, get more houses built, and enhance the food and fibre sector.
under the Official Information Act 1982
8. In addition, the Government wil be making targeted changes to improve the operation
of the Resource Management Act 1991 (RMA) and national direction instruments.
These changes wil reduce unnecessary regulation and help unlock development and
investment in infrastructure, housing, and the food and fibre sector while achieving
good environmental outcomes.
National Policy Statement for Highly Productive Land (NPS-HPL)
Released
9. The NPS-HPL protects highly productive land for use by land-based primary
production from inappropriate subdivision, use and development.
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Appendix Three
10. Officials are progressing the amendments consulted on in 2023 that wil provide a
clear consent pathway for intensive indoor primary production, greenhouses, and
specified infrastructure such as solar farms to develop on highly productive land.
Subject to Cabinet consideration, the amendments wil likely take effect in the third
quarter of 2024.
11. The Government has also committed to amending the NPS-HPL to better enable
housing development whilst appropriately managing highly productive land. These
amendments wil be delivered through Phase Two of the RMA reform programme
There wil be an opportunity for public input in this process next year.
Water
12. The Government has announced it is reviewing and replacing the National Policy
Statement for Freshwater Management 2020 (NPS-FM) this term, to better reflect the
interests of all water users.
13. Water is an essential resource for horticulture. There are growing challenges with
water availability and security, particularly as droughts become more frequent and
intense due to climate change.
14. The Government wants to enable small- and large-scale water storage infrastructure.
We have asked officials to explore options for enabling activities such as on-farm
water storage which support economic and environment goals.
Enabling vegetable growing
15. As part of the Resource Management work programme, we wil also be considering
how to better enable vegetable growing in the resource management system.
16. Vegetable growers are regulated differently across the country and in some regions
face difficulty in obtaining resource consents and undertaking normal practices like
crop rotation.
Freshwater farm plans
17. Freshwater farm plans wil enable farmers and growers to find the right solutions for
under the Official Information Act 1982
their farm and catchment. Growers have told us the current system is too complex, so
we are working at pace to simplify and improve the freshwater farm plan system.
18. Property and catchment-specific farm plans make sense because they can be used to
identify environmental risks and plan practical on-farm actions to manage those risks.
19. We have heard that many in the sector would like existing environmental programmes
to be recognised in the freshwater farm plan system, and we are looking at ways to
Released
integrate existing farm environment plans or industry assurance programmes (such as
the Good Agricultural Practice schemes) in the system.
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Appendix Three
Genetic technologies
20. The Government is reforming gene technology regulation to enable the use of these
tools to deliver benefits for New Zealand, from producing sustainable, climate-friendly
food, and new technology to reduce climate impacts from production.
21. The new rules will be fit-for-purpose, future-focused, and designed to accommodate
advances in gene technologies and methods.
22. Policy design has begun, and a Bil to allow for greater use of gene technology is
expected to be introduced by the end of this year. Legislation for a new regulatory
system for gene technology is expected by August 2025.
23. A vital part of this work wil be ensuring strong protections for human health and the
environment, and ensuring any work is safe and ethical.
Agrichemicals
24. The Government has recently announced a regulatory sector review on the approval
process for new agricultural and horticultural products. This review wil look to reduce
regulatory burden, and support growers having access to the tools to do what they do
best, growing their crops.
under the Official Information Act 1982
Released
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Appendix Three
Appendix Four: Suggested talking points
s9(2)(g)(i)
2
Release
2 AGMARDT is an independent not-for-profit organisation, established in 1987 with public funds from the
wind-up of the British, Christmas Island and New Zealand Phosphate Commissions. AGMARDT is funding Ian
Proudfoot and his KPMG team to look at how the primary sector can collaborate better. This work is not just
limited to the commodity levies bodies. The aim of this work is to start a conversation, recognising chal enges
and pushback in changing the structure of commodities levies bodies and other organisations.
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Appendix Four
under the Official Information Act 1982
Released
Priority – Medium
Security Level – In Confidence
To:
Hon Nicola Grigg, Associate Minister of Agriculture
From: Sothea Tep, Manager Horticulture Policy, Policy & Trade
Vegetable production and industry allocation under the
Emissions Trading Scheme
Date 1 August 2024
Reference
AM24-0743
Purpose
•
This aide-memoire provides information and talking points (
Appendix One) for your
reference as needed on how industrial allocation under the Emissions Trading
Scheme affects greenhouse vegetable growers.
The Chair of Vegetables New Zealand was critical of the Emissions Trading Scheme
in a recent interview
1.
On 25 July 2024, Vegetables New Zealand (VNZ) Chair, John Murphy, was
interviewed by Newstalk ZB about the impacts of the Emissions Trading Scheme
(ETS) system on commercial greenhouses. Mr Murphy was highly critical of the ETS
system1.
2.
During the interview, Mr Murphy was critical of proposed changes to the ETS industrial
allocation and believes the changes will unfairly penalise growers using greenhouses
and cover growing systems (covered crop growers). VNZ believe the decrease in
industrial allocation the Ministry for the Environment (MfE) is proposing is too
significant and will have significant negative impacts for the industry, including one
operator who is claiming a $200,000 loss figure. VNZ want a delay on the proposed
changes to industrial allocation, to provide time for growers to switch to sustainable
fuel options.
d under the Official Information Act 1982
3.
This issue has been raised by the industry in the past, s9(2)(g)(i)
Information on the SVS launch is provided in AM24-0702
Launch
of Sustainable Vegetable Systems (SVS) nutrient management tool, and additional
talking points to support you in MO24-0389
Talking points on industrial allocation
under the Emissions Trading Scheme and vegetable growing as a permitted activity.
Rele
1 https://www.freshvegetables.co.nz/news-and-events/news/emissions-trading-scheme-could-put-remaining-
greenhouse-growers-out-of-business/
AM24-0743
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4.
Background information on the vegetable industry is provided in
Appendix Two.
5.
The Ministry for Primary Industries (MPI) consulted with MfE on the industrial
allocation changes under the ETS. Information on the ETS and reasoning behind the
changes for the impacted greenhouse-based crop groups is provided in
Appendix
Three.
6.
MPI recently consulted with the industry to make amendments to the National Policy
Statement for Highly Productive Land, which will enable greenhouses to be built on
highly productive land. This will help reduce the regulatory burden on the industry as
they continue to adapt new sustainable measures and operate. Additional information
on this is provided in
Appendix Four.
Minister / Minister’s Office
Seen / Referred
/ / 2024
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Appendix One: Talking Points on industrial allocation under the Emission Trading
Scheme (ETS)
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Appendix One
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Appendix One
Appendix Two: Background information on New Zealand’s vegetable industry and
greenhouse grower
New Zealand’s vegetable sector
1.
New Zealand’s vegetable industry covers 55 commercially grown crops. Most crops in
the vegetable industry are represented by Vegetable New Zealand, however many
large crops such as tomatoes and potatoes have their own industry organisations.
2.
Many vegetable growers use commercial greenhouses to grow their crops, however
industry data does not distinguish between the volumes and sales value of crops
grown with the use of greenhouses.
3.
New Zealand’s fresh and processed vegetables industries collectively exported
$737 million to the year 30 June 20232. It is estimated that for the year ending 30 June
2024 the vegetable sector will achieve $730 million in exports.
Commercial covered crop and greenhouse vegetable growers
4.
New Zealand has three crops produced in industrial greenhouses that fall under the
Emissions Trading Scheme (ETS). These are tomatoes, cucumbers, and capsicum.
There are 1,323 hectares of greenhouses established across New Zealand, which
produce these three crops primarily for export.
5.
Other crops like leafy greens are often grown in greenhouses but do not receive an
ETS allocation as they are sold on the domestic market. The intent of the ETS
industrial allocation was to help our greenhouse growers be competitive with produce
sold on the global market.
The three greenhouse industries (tomatoes, cucumbers, and capsicum) have been
consolidating over time
6.
The industry structure for the three crops under the ETS have been consolidating over
time with many industry participants expressing concerns about smaller scale
operators leaving the industry. From 2010 to 2023 the number greenhouse growers
have shrunk. However, the scale of growing operations has increased significantly
with 37 percent of growers operating large scale greenhouse operations.
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Released
2 This includes both greenhouse crops and non-greenhouse crops.
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Appendix Two
Appendix Three: Background information on the Emissions Trade Scheme changes
Information on reforms to industrial allocation under the Emission Trading System (ETS)
1.
The Ministry for the Environment (MfE) has regulatory stewardship of the ETS.
2.
The ETS is a regulatory tool for helping New Zealand meet our domestic and
international climate change targets, including the 2050 target set by the Climate
Change Response Act 2002. The system requires industry operators to measure their
greenhouse gas emissions and provides allocations to incentivise sustainable
practises and gradually reduce the amount of greenhouse gas emitted.
3.
The Government began reviewing industrial allocation policy in 2021 after evidence
emerged some industrial activities were likely receiving an over-allocation of units.
Public consultation took place in mid-2021.
4.
The Climate Change Response (Late Penalties and Industrial Allocation) Amendment
Act 2023, which enables reforms to industrial allocation, was passed by the House of
Representatives in August 2023.
5.
The Act made the following changes to industrial allocation:
a)
enabled allocative baselines to be updated to address over-allocation;
b)
changed the base years for allocative baselines;
c)
clarified the framework for assessing if a new activity is an eligible industrial
activity; and
d)
technical changes to improve industrial allocation policy.
Industrial allocation for the three vegetable crops (tomatoes, cucumbers, and capsicum)
6.
Capsicum, cucumber, and tomato growers are intended to receive 56 percent of their
energy costs as industrial allocation. Under the current allocation the three vegetable
crops are all over allocated.
7.
According to MFE, the vegetable industry has been receiving over allocation during
2023, receiving allocations of:
under the Official Information Act 1982
a)
67 percent for capsicums growers;
b)
98 percent for tomatoes growers; and
c)
251 percent for cucumbers growers.
8
This over allocation has an estimated fiscal cost of approximately $7.5 million for
2024. The proposed ETS baseline allocation changes will update those that were set
in 2010 to ensure the allocations accurately reflect the industries scale.
Released
9.
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Appendix Three
Emissions intensity
10. The emissions intensity of all three vegetable crops has decreased significantly since
2010 (
Table One).
Table One: Emissions intensity of horticultural activities (tCO2-e3/$million)
2010
2023
Difference
Capsicums
963
735
-228
Cucumbers
1,565
328
-1,237
Tomatoes
926
447
-479
11. The changes in emissions intensity are for the following reasons:
a)
there were no submissions in the recent data collection from firms producing
capsicums and tomatoes with comparatively high allocative baselines that
submitted in 2010; and
b)
reduced heating in glasshouses and reduced quality of outputs for cucumber
growers.
12. There has also been consolidation within the sector, which has contributed to
improvements in emissions intensity (
Table Two below). MFE considers that the
changes in emissions intensity show that all three activities may be ineligible for
industrial allocation. This may have occurred if eligibility had been retested as part of
the reforms to industrial allocation.
Table Two: Growers that submitted activity data in 2010 and 2023
2010
2023
Capsicums
18
11
Cucumbers
17
14
Tomatoes
62
26
Allocative baselines
under the Official Information Act 1982
13. The allocative baselines for capsicums, cucumbers, and tomatoes have reduced by
16.74 percent, 77.67 percent, and 42.61 percent respectively. As a result, the
industrial allocations for firms carrying out these activities will decrease (see
Table
Three below).
Released
3 Tonnes of cardon dioxide emission gasses.
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Appendix Three
Table Three: Industrial allocations for commercial greenhouse production of capsicums,
cucumbers, and tomatoes.
2022 allocation
Value @ $50 NZU
Estimated future allocation
Value @ $50 NZU
(NZUs4)
price
(NZUs)*
price
Capsicums
24336
$1,216,800
20262
$1,013,108
Cucumbers 28741
$1,437,050
6418
$320,893
Tomatoes
42748
$2,137,400
24533
$1,226,654
*This is an indicative estimate based 2022 allocations and percentage change in allocative baselines for each
activity.
Previous engagement
14. We understand MFE has engaged with organisations that represent the industries
impacted by proposals to update industrial allocation policy.
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4 NZU referring to New Zealand Units of ETS allocation.
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Appendix Three
Appendix Four: Additional information on National Policy Statement for Highly
Productive Land amendments consulted on last year are being progressed.
1.
The objective of the National Policy Statement for Highly Productive Land (NPS-HPL)
is to protect highly productive land for use in land-based primary production. This is
achieved by restricting inappropriate use, development, or subdivision of highly
productive land.
2.
Last year, amendments to the NPS-HPL were consulted on relating to enabling
greenhouses, indoor farming, and specified infrastructure (such as solar farms) on
highly productive land. According to the Horticulture New Zealand submission,
83 percent of greenhouses in New Zealand are currently built on highly productive
land.
3.
Recommendations have been made to Hon Chris Bishop, Minister Responsible for
RMA Reform, and Hon Todd McClay, Minister of Agriculture on amendments to the
NPS-HPL. The Cabinet paper package is being developed and the Ministers will seek
Cabinet decision on 6 August 2024.
4.
This change aligns with government goals of reducing regulatory burden and allow
normal rural activities on highly productive land.
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Appendix Four
Priority – Medium
Security Level – In Confidence
To: Hon Nicola Grigg, Associate Minister of Agriculture
From: Sothea Tep, Manager Horticulture Policy
Letter to Horticulture Industry Stakeholders
Date 2 August 2024
Reference
AM24-0737
Purpose
•
This aide-memoire provides you with the requested draft letter addressed to
horticulture industry groups outlining the Government’s actions and work programme
(
Appendix One).
The New Zealand horticulture sector
1. New Zealand’s horticulture sector is diverse with industries of all sizes covering fruit,
vegetables, wine, arable crops (such as, grains, seeds) and other plant industries
(such as flowers). Generally, most fruit is exported to international markets,
vegetables serve the domestic market, and arable crops feed New Zealand’s
livestock, but there are many exceptions and variations in this across the sector.
2. Growers face common issues including accessing and managing water, accessing
new crop protection tools, workforce pressures, use of highly productive land, and
accessing export markets
3. The Government has work programmes that are in progress to address these.
The draft letter contains information on work the Government has done, what is on the
Government’s work programme, and invites the sector to engage with the policy
process where there is an opportunity.
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Minister / Minister’s Office
Seen / Referred
/ / 2024
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Appendix One: MIN24-0623 Letter to Horticulture Industry Stakeholders
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Appendix One
Dear [name]
I write to you as the Associate Minister of Agriculture with the delegation of Horticulture to
inform you of the Government’s work programme as it relates to this important sector.
Firstly, I want to acknowledge the hard work and ongoing resilience of all our growers across
the country. It has been a difficult year of soft commodity prices, high input costs, high inflation,
high interest rates, and recovery from extreme weather events. Despite this, our horticulture
export revenue is forecast to continue increasing; this is an achievement to be celebrated.
It is a privilege to hold this portfolio in a country such as New Zealand with a horticulture sector
that contributes so much to the success of our nation. This is not a role I take lightly. Now that
I am back on board from maternity leave, I am keen to continue to meet with as many of you
as I can, and understand what is important to you. Keeping in regular touch is a key part of my
role, along with championing your sector to achieve its goals.
Our government is focused on backing ou farmers and growers to see more value returned
to the farm gate, and a greater return for our growers so the sector can continue to adapt,
evolve, and innovate for the long term.
While there are many issues that the horticulture sector is impacted by, I have heard from you
that access to land, water, and a skilled workforce are a priority. As mentioned, I’m writing to
let you know of the work the Government has been doing in these areas and what is on the
work programme going forward, including with some other areas around innovation, market
access and rural communities that I thought would be of interest to you. It’s my intention to
keep you updated on the work in these areas, and I would like to hear from you about other
areas that are important to you.
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The latest updates on these priority areas are outlined in this letter. In some areas the
Government will be seeking views on specifics through consultation, and I encourage you to
get involved in these processes as they progress.
Thank you for continuing to be proactive and involved in voicing your needs and concerns as
a sector. Your feedback is imperative to ensuring the future success of the sector is well
considered in the Government’s policy development – I would be grateful if you could share
this letter with your membership.
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The Resource Management Act 1991 (RMA) reform
The Government has committed to making a range of reforms to the resource management
system to unlock development capacity for housing growth, enable the delivery of
infrastructure, allow farmers to farm, and enhance the primary sector. We are currently
undertaking ‘Phase Two’ of the work programme, which includes:
• The Fast-Track Approvals Bill. The Environment Committee is due to report back on the
Bill by 6 September 2024.
• Two RMA amendment bills.
o The first amendment Bill Resource Management (Freshwater and Other Matters)
Amendment Bill is currently being considered at Select Committee.
o The second amendment bill will focus on urgent changes to enable housing
growth, infrastructure, reduce regulation and help unlock development and
investment in the food and fibre sector while achieving good environmental
outcomes.
• A national direction amendment package. The national direction package is aimed at
amending, reviewing, and developing current and new national direction instruments to
unlock development and investment in infrastructure, housing capacity, horticulture,
aquaculture, forestry, and mining while achieving good environmental outcomes.
Phase Three of the work programme will be to introduce resource management legislation
to replace the current RMA. This work will look at the principles, functions, and structure of
the system, and what changes will make the biggest difference to outcomes in the long-term.
The Government will make announcements on the second RMA amendment Bill and the
national direction package by the end of this year. There will be an opportunity for public
input in this process.
National Policy Statement for Highly Productive Land (NPS-HPL)
As you will understand, the NPS-HPL is an important piece of regulation for the horticulture
sector. The NPS-HPL protects highly productive land for use by land-based primary
production from inappropriate subdivision, use, and development.
Amendments are being progressed to provide a clear consent pathway for intensive indoor
primary production greenhouses, and specified infrastructure to develop on highly
productive land. It is likely that the amendments will take effect in the third quarter of 2024,
under the Official Information Act 1982
subject to Cabinet consideration. To facilitate these amendments coming into effect, officials
will be updating guidance material to support implementation.
The Government has also committed to amending the NPS-HPL to better enable housing
development whilst appropriately managing highly productive land. These amendments will
be delivered through Phase Two of the RMA reform programme (national direction package).
Public consultation on NPS-HPL amendments is planned for early 2025.
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Freshwater regulation changes
The Government is committed to reducing the regulatory burden on farmers, while working
towards improving environmental outcomes for our waterways. We have heard from growers
and farmers that the existing policies have become extremely complex and expensive to
implement.
The Government has announced it will review and replace the National Policy Statement for
Freshwater Management 2020 (NPS-FM) to better reflect the interests of all water users.
Ministers are currently determining the scope of the review. This includes asking officials to
explore options to enable vegetable growing and on farm water storage to support economic
and environment goals.
Officials are also reviewing ways to improve the freshwater farm plan (FWFP) system based
on stakeholders’ concerns about the cost and complexity of the current system. The review
aims to reduce regulatory burden and duplication by creating integration pathways for
existing farm environment plan initiatives and industry assurance programmes, enable
catchment level solutions and empower local communities, and review FWFP certification
and audit requirements to reduce unnecessary cost. It is important that farmers and growers
are supported to develop robust plans. The sector will be engaged throughout the review.
Recognised Seasonal Employer (RSE) Scheme Review
As I’m sure many of you will have experienced, the RSE scheme is an essential input for
horticulture and viticulture businesses; providing workers during seasonal peaks to maximise
productivity. The RSE scheme has been a significant contributor in the growth of our
industries.
The RSE scheme has a number of built-in safeguards to protect workers from exploitation,
ensure New Zealand workers are not displaced from work, and ensure there is minimal
impact on local infrastructure and services, particularly housing. However, many of you who
employ through the RSE scheme have raised concerns recently about the costs in addition
to the minimum wage you are obliged to pay, restrictions on accommodation costs, and
having to guarantee 30 hours of work each week. I understand that these, and other scheme
settings have resulted in increasing costs and uncertainty for employers during a time of high
inflation.
While I think it is important that the integrity of the system is maintained, changes are
necessary to make the scheme more efficient, provide greater certainty for employers and
workers, and to support the sector to grow and increase productivity. The Government’s plan
to increase the RSE cap will increase the flexibility of the allocation system which will help
address seasonal labour pressures. We will have more to announce about the scheme
shortly.
Vocational education and training
In 2023 the Government committed to disestablish Te Pūkenga and restore regional
under the Official Information Act 1982
decision-making for vocational education. Work is already underway to disestablish Te
Pūkenga and consult on a proposed replacement model.
A key goal is improving regional autonomy and responsiveness, supporting stronger
connections between the vocational education and training system and local communities,
industries, and labour markets. The Government is focused on ensuring the vocational
education and training system includes pathways for New Zealanders to obtain the skills that
are in demand in the primary sector, including the horticulture industry.
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Pending Cabinet approval, consultation is expected to take place in the near future. Final
proposals will reflect consultation and are expected to be provided back to Cabinet in late
November.
Agricultural and Horticultural Products Regulatory Review
I have heard from you that access to agricultural and horticultural products is important to
support primary sector productivity and provide protection against pests and diseases.
Farmers and growers have regularly talked of how long, difficult, and complex it is to get new
products for use in New Zealand, and the impacts that this has on your ability to operate and
sell to the domestic and export markets.
While I understand the industry’s concerns, these need to be balanced against making sure
New Zealand has a system to manage risks of such products to human health, trade, food
safety, the environment, and animal welfare. If these settings become out of balance this
could lead to significant negative impacts such as trade issues for our exported primary
produce.
The Government has recognised this is an issue for the sector and has initiated a regulatory
review on the approval process for new agricultural and horticultural products, under the
Agricultural Compounds and Veterinary Medicines Act 1997 and the Hazardous Substances
and New Organisms Act 1996, led by the Ministry for Regulation (MfR). The approval path
will be considered as starting from information collection for applications through to receiving
approval for domestic use. The review will also consider any conditions attached to approval
of products, reassessment processes, and both regulatory design, and regulatory practice.
MfR has developed the Terms of Reference and timeframes for the review which you can
find on the Ministry’s website: https://www.regulation.govt.nz/assets/Ministry-for-Regulation-
files/Terms-of-Reference-for-Agricultural-and-Horticultural-Products-Regulatory-
Review.pdf. Horticulture New Zealand (HortNZ), A Lighter Touch, Zespri, Foundation for
Arable Research, and New Zealand WineGrowers, among others, were consulted on these.
HortNZ will also be part of the review’s Sector Reference Group.
The review is expected to be completed in six months, but as this is a complex and important
area of regulation, flexibility may be required. A report and recommendations will be delivered
to Ministers in early 2025.
Once MfR has begun the review, there will be a chance to publicly submit your thoughts on
what the key issues are and potentia ways these can be addressed. Your feedback will be
very welcomed and necessary during this process.
Genetic Technologies
New Zealand’s regulation has not kept pace with developments in genetic technologies. I
believe there is an opportunity for New Zealand to benefit from new technologies while
maintaining the integrity of our industry operators that opt to remain genetic editing free. This
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could be achieved through implementing assurance and supply chain separation
programmes which prevent unintentional crossover and help manage trade risks.
The Government is currently developing the new policy settings at pace to support New
Zealand’s adoption of genetic engineering technologies including the definitions of
Genetically Modified Organisms. We are reforming genetic technology regulation to enable
the use of these tools to deliver benefits for New Zealand. This may include producing
sustainable, climate-friendly food, reducing the sectors’ environmental impact and providing
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new opportunities, and reducing climate impacts from food production. I want to understand
the industry’s needs and opportunities with genetic technologies, including how you might
use the technologies.
Rural banking inquiry
In June this year, the Government announced an inquiry into rural banking. We recognise
that growing the rural economy is critical to rebuilding New Zealand’s economy, and that
understanding the role of bank competition in the sector is important.
The Primary Production Committee has been asked to work with the Finance and
Expenditure Committee to jointly develop terms of reference, join meetings on submissions
relevant to rural banking, and prepare a report on rural banking to feed into the overall inquiry.
We are working on the details of the Inquiry and will release the Terms of Reference in due
course.
Enhancing market access
I know that market access is of critical interest to the horticulture sector as one of the vehicles
for export growth. The Government is prioritising protecting and enhancing the market access
we have and addressing non-tariff measures across the primary sectors.
Governments across the world put in place legitimate non-tariff measures to ensure the
safety and suitability of food and other primary products imported into their jurisdiction. We
will be working with international counterparts to ensure New Zealand s export interests are
prioritised, and that New Zealand’s regulatory and administrative systems are recognised.
We will leverage this to protect and enhance existing market access, and to support access
for new products to new markets.
We will also support you through removing unjustified non-tariff measures, which are a
significant cost and impediment to growth for the sector The Government will challenge non-
tariff measures and find innovative and costs effective means of maintaining and gaining
access to these markets by investing in closer relations with trading partners, leveraging our
Free Trade Agreements and other arrangements, and through a closer working relationship
with the sector.
I am aware that the horticulture sector is diverse, with a number of industry bodies, each with
unique market access opportunities Industry groups and forums such as the Plants Market
Access Council (PMAC) play a crucial role in helping the Ministry for Primary Industries (MPI)
work with the sector to prioritise its interests, so that we best support your sector and New
Zealand’s interests.
Recently I was encouraged to hear that MPI, with support from Onions New Zealand,
successfully negotiated a new protocol for onion export to Indonesia, without requiring
additional fumigation treatment. The recent signing of the kiwiberry export plan with China
further demonstrates our ongoing commitment to enhance market access. I look forward to
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supporting you in maintaining and enhancing market access.
I encourage the industry to continue using forums such as PMAC to identify risks and make
the most of opportunities, and I look forward to supporting this good work with my Ministerial
colleagues, both here in New Zealand and on the international stage.
Yours sincerely,
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Hon Nicola Grigg
Associate Minister of Agriculture
