Speech to the World Dairy Expo

Friday, April 22, 2016 - 15:49
Primary Industries

Da jia hao

I would like to begin by saying how great it is to be back in China on my fourth visit, and what an honour it is to come to Harbin and the Heilongjian Province that has a proud history as an agricultural producer.

I have brought with me a strong dairy delegation, including John Wilson from Fonterra, Malcolm Bailey from DCANZ, Special Agricultural Trade Envoy Mike Petersen, and MPI Deputy Director General Roger Smith. 

I was in China last November when I spoke at the DRC Food Security Summit in Beijing. Every time I come, there is always something new happening. China is a very exciting and dynamic country.

This trip I have been a part of a very senior delegation with a real primary sector focus from New Zealand, including our Prime Minister John Key and Trade Minister Todd McClay. We were accompanied by a delegation of around 70 senior representatives and executives from New Zealand companies, officials and media.  

While in China, I have had the pleasure of supporting the Prime Minister in bilateral discussions with President Xi, Premier Li, and my old friend Agriculture Minister Han who proudly tells me he is from this province.  

I first met the President when he visited New Zealand in 2014. I had the pleasure of showing him a showcase of New Zealand primary sector companies and institutes who have a strong presence in China.

We have been discussing with the President the importance of the New Zealand-Chinese relationship. Since we signed a Free Trade Agreement with China in 2008, economic and cultural ties between our countries have gone from strength to strength.

Since 2008 we have seen significant growth in trade and cooperation between our respective dairy sectors. It’s clear that this will be a long-term relationship with benefits for generations of Chinese and New Zealanders to come.

It’s true that current milk prices are hurting dairy farmers around the world at the moment. Dairy farmers are finding it pretty tough going in New Zealand. I recently attending the OECD Agriculture Ministers meeting in Europe. European dairy farmers are also facing a milk price that is below the cost of production – even with subsidies. 

However, I believe the medium-to-long term outlook for dairy is positive, and there are many lessons our farmers can learn from each other through this situation.

The reason why I believe that dairy prices will recover is that dairy is very important for food security as it is a very good source of protein. Dairy is becoming increasingly popular in diets across the world, especially here China where you have over 250 million middle class consumers which are expected to grow by another 150 million in the next decade.

In Beijing, I signed an Agricultural Cooperation Agreement with Minister Han. This agreement is about creating and strengthening relationships and sharing lessons between our dairy sectors.

This is a public-private partnership that will utilise our experience in research and training to cooperate in areas such as livestock technology, animal health, and disease control. This Agreement will reinforce the strong links we already have between our countries. This will be a win-win for our dairy sectors.

This Dairy Expo is a very important event bringing together dairy interests from around the world to exchange views and build partnerships that can respond to global challenges such as the one we are currently in.

Today we are here as one global dairy industry. There are opportunities for us to continue working together to grow the dairy industry. A great example of this was the combined effort of countries at the WTO to eliminate agricultural export subsidies. This will help address the artificial suppression of milk prices.

The value delivered to dairy producers, importers, exporters and consumers through an effective global trading system cannot be underestimated. Through the development of predictable, stable and rules-based trade, the dairy industry can better react to, and plan for, changes in market demands.

This week I was at a forum with Jack Ma, the founder of Alibaba. Jack spoke about what it was he thought set high quality products apart from other products around the globe. He spoke about things like sustainability. He spoke about food safety.

There is no doubt that the world needs to produce more food. However, it also needs to do so in a sustainable way, and in a way that protects the safety and integrity of the product.

Consumers now have growing expectations about their food, how it is produced, and who is producing it. Meeting these expectations can be supported through new technologies, multinational investment, improved logistics, and global sourcing of food ingredients.

Food safety, quality systems, science and innovation drive the New Zealand dairy industry, which has led to a dramatic increase in productivity over the past decade. This increase is largely the result of genetic gains and improved farm management practices, including improvements in livestock health and nutrition.

However building our own capacity in isolation will not ensure a stable supply of quality food. We must continue to become increasingly interconnected through two-way investment and lengthening supply chains.