Recommendations
102. It is recommended that the Committee
1. Note that, on 1 November 2004, Cabinet agreed to a process for government engagement with the food and beverage sector [CAB MIN (04) 35/5 refers] under the sector engagement policy of May 2004 [CBC (04) 70 refers] and that, as part of this engagement, the Food and Beverage Taskforce was established in December 2004.
2. Note that the Taskforce's report Smart Food, Cool Beverage: New Zealand's future in the food and beverage sector was published in August 2006 with 49 recommendations.
3. Note that the Government response to the taskforce addresses the substantive issues raised in the taskforce's report, the objectives of government in establishing it and identifies the steps necessary to drive transformation in the sector;
4. Agree to broadly endorse the following strategic imperatives which were identified by the Taskforce:
4.1 the need to protect and enhance the sector's existing base and strengths by taking actions to enable continued growth of 5 per cent per annum in the face of increasing challenges, while at the same time addressing;
4.2 the need to develop new higher-value products, particularly to capture a share of the growing functional-foods market; and
4.3 the need to develop new markets, particularly focusing on the emerging high growth markets in Asia.
5. Agree that the food and beverage sector is critical to achieving the objectives of economic transformation;
6. Agree that, while affirming the importance of maintaining and enhancing the sector's existing strengths, the government's response needs to place a strong emphasise on energetic and purposeful development of new higher value products, businesses and export industries arising from the food and beverage sector;
Government's Vision for the Sector
7. Agree to the vision for the food and beverage sector's future contained in Annex 2, and that this vision be incorporated in the Government's response, in order to provide sector stakeholders with a clear signal of the government's expectations of them regarding the progressive transformation of the sector;
Towards Implementation: Next Steps
8. Agree that advancing transformation in New Zealand's food and beverage sector will require identifying where and how innovation can be used to build-off existing and emerging capabilities in the sector;
9. Note work led by MED is underway to design the necessary mechanisms for identifying and realizing the opportunities referred to in recommendation 5, including:
9.1 [withheld under section 9(2)f(iv) of the Official Information Act];
9.2 [withheld under section 9(2)f(iv) of the Official Information Act];
9.3 continued work on New Zealand's innovation system;
9.4 [withheld under section 9(2)f(iv) of the Official Information Act];
10. [withheld under section 9(2)f(iv) of the Official Information Act].
Productivity and Sustainability
11. Note the mutually supportive dimensions of improved productivity and enhanced sustainability;
12. Note that the sustainability of the primary industries is a central component of the Ministry of Agriculture and Forestry's and the Ministry of Fisheries' work programmes;
13. Note the potential role of the Primary Industries Forum and the Primary Industries 2020 Summit in providing vehicles for catalysing business adaptation of sustainable practices;
14. Agree that sustainability be emphasised as a core value in the government's response to the taskforce and in the development of initiatives to realise the sector's full commercial potential, including initiatives developed through the [withheld under section 9(2)f(iv) of the Official Information Act];
Initiatives advanced in other work-streams
15. Note that the taskforce's concerns regarding the cost structure for exporters are addressed through: the business tax package; the funding increase for the Market Development Assistance scheme; and the Quality Regulation Review;
16. Note that MED has coordinated the government's response to the Aquaculture strategy and that several initiatives identified in this paper also form part of the Aquaculture response;
Key initiatives
17. Agree [withheld under section 9(2)f(iv) of the Official Information Act], the response to the taskforce be focused around the following six key initiatives, which address key themes in the taskforce's recommendations:
17.1 The Food and Beverage Product Development Infrastructure Project to identify possible gaps in food and beverage innovation and commercialisation infrastructure and identify whether there is a case for Government investment;
17.2 Increasing the business capability of exporters;
17.3 Increasing the profile of New Zealand food and beverage firms internationally through expanded in-market assistance that can include information on the sustainability attributes of New Zealand products;
17.4 Raising productivity, with a focus on the pastoral industries;
17.5 Setting clear directions for food and beverage research;
17.6 Implementing the food and beverage Skills Action Plan.
The Food and Beverage Product Development Infrastructure Project
18. Direct NZTE and MED, in consultation with MAF, MoRST and FRST, firstly to confirm the extent and nature of any gap in innovation infrastructure and secondly to undertake a related feasibility study by November 2007.
Food and Beverage Roadmap
19. Direct MoRST to establish a work programme to assess New Zealand's research capability for food and beverage innovation, and use this to develop a Food and Beverage Roadmap, which will provide broad context and high-level direction for food and beverage research;
Skills Action Plan
20. Note that implementation of the Food and Beverage Skills Action plan will be facilitated through the establishment of the Skills and Training Action Group (STAG);
21. Note that the Dept of Labour advises that it can provide ongoing support to the STAG as a priority within its baseline allocation for sector and regional engagements.
22. Note that implementation of the Skills Action Plan may generate the need for budget bids beyond 2007/08. These bids may come from a variety of votes depending on the agreed work programme which is yet to be developed;
23. Agree that the Skills Action Plan be implemented.
Peak Oversight Body
24. Note the taskforce recommended oversight of the implementation of its "development agenda" should be provided at a high level by way of a peak body, such as Prime Minister's Advisory Council.
25. Note this recommendation will not be implemented at this time, [withheld under section 9(2)f(iv) of the Official Information Act].
26. Agree that the response to the taskforce include a challenge to the key players in the sector to adopt the vision referred to in recommendation 6, lift their aspirations and actively seek transformative opportunities and that government is willing to engage in a dialogue on these matters;
27. Agree that MED be responsible for oversight of the implementation phase of the food and beverage engagement to June 2009, as part of its overall responsibility for the Economic Transformation agenda.
28. Agree that the next Economic Transformation Agenda Update report to Cabinet, due in September 2007, include an update on the food and beverage transformation initiatives as a separate category of work.
29. Note that MED officials will provide the Minister for Economic Development with a report by December 2007 on any remaining issues arising out of the Food and Beverage taskforce process, including any that might relate to Maori economic development and contribution to the sector.
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