The primary industry powerhouse

Governments have tried over the years to steer attention away from New Zealand's primary industries as being the powerhouse of the economy.

As examples, tourism has been accepted as a large earner of foreign exchange, and with a prime minister serving as tourism minister, the spending ploughed into promoting New Zealand as a destination has increased. Sir Peter Jackson and the Weta Workshops have for some time now been used as illustrations of what clever New Zealanders can achieve. And the phrase ''knowledge economy'' has been bandied around for a generation as ministers of the Crown promote learning and technology as a way of breaking down the barriers of distance for New Zealand.

All of this has worked. News from Fisher and Paykel Appliances this week showed how top scientists, engineers and designers have combined their talents in Dunedin to produce a global award-winning oven. The company has called for more money to be spent training scientists, engineers and designers - and less to be spent on accountants, lawyers and arts students. But humming along in the background, as they always have, are the primary industries. This week, we learnt they contribute to the economy about $30 billion a year in exports.

The latest Situation and Outlook for Primary Industries report, released on Monday, produced a much welcomed ''very positive'' medium-term outlook for primary industries, despite the problems experienced this year through widespread drought. It was a season of two halves for many pastoral farmers, with the first characterised by a continuation of favourable climatic conditions experienced in 2011-12, while a long spell of warm, dry weather from January plunged the North Island and West Coast into drought. The year also included a strong New Zealand dollar and saw sheep meat, venison and wool prices retreating from the near historic highs of the previous years.

But there are already optimistic signs appearing in the sector. This week the dollar has fallen substantially against the United States currency. And while China and Australia are still this country's largest export markets, much of New Zealand's trade is carried out in US dollar values. A falling currency here means competitive prices in overseas markets for our meat, wool and dairy products. The report predicts primary sector revenues will increase 2.2% to $24.1 billion in the year to June 2014, and to grow at a compound annual growth rate of 7.4% to $29.5 billion in 2016-17. Primary Industries Minister Nathan Guy said the drought had reinforced how crucial primary industries were to New Zealand. But is that importance reflected in actions by the Government? The answer is a resounding no.

While Steven Joyce, the Minister for Economic Development, Science and Innovation, Tertiary Education, Skills and Employment, enjoys a ranking of four in the John Key-led Cabinet, Mr Guy is ranked 16th, having moved up a remarkable two places in the reshuffle earlier this year.

If a Cabinet ranking of 16 demonstrates how crucial this Government regards the primary sector to be, then perhaps a rethink is needed. The very skills Mr Joyce brings to the table through his plethora of portfolios are exactly what the primary sector needs to become even more competitive on the global stage. Innovation, skills, employment, tertiary education and science are all what we expect our farmers to have in their arsenal of tools as they develop better farming techniques - techniques that also help protect and preserve the environment. Society cannot call for farmers to restrict their use of nitrates and preserve waterways without giving them skills and options to do just that.

The challenge for the primary industries is to develop resilience - to protect farmers' ability to continue to produce and export, as well as add value.

Primary industries will long remain a powerhouse of the New Zealand economy. Although increasing the earnings of our other industries is crucial to attracting and retaining our brightest graduates, as a country, we need those vital skills - and retention of the country's best and brightest - in our primary sector. Not to do so would undoubtedly jeopardise the future wellbeing of New Zealand.

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