www.aquaculture.govt.nz

Cabinet Paper 

Online version

PDFs available to print:
Government Response (PDF, 88 KB)
Appendix 1 Priority Projects (PDF, 50 KB)
Appendix 2 National Aquaculture Position Statement (PDF, 141 KB)

The Government response to the New Zealand aquaculture strategy 

Proposal

To seek agreement to the proposed government response to the New Zealand Aquaculture Strategy.

Executive Summary

The government made a commitment at the end of July 2006 to respond to the industry-led New Zealand Aquaculture Strategy.  A draft response to the New Zealand Aquaculture Strategy was endorsed by aquaculture ministers (Minister of Fisheries, Minister for Industry and Regional Development, Minister for the Environment, Minister of Conservation, Minister of Māori Affairs and Minister of Local Government) in December 2006.

The proposed response does not address all the actions identified in the New Zealand Aquaculture Strategy.  Instead, it is structured around five priority areas or ‘key pillars':

Each pillar has several related initiatives. Through these initiatives, government aims to support the implementation of the regulatory regime for aquaculture, to encourage investment in the sector, and facilitate the transformation of the sector into a higher-value contributor to the New Zealand economy.

The response also recommends that government support the following mechanisms, to assist the implementation of the five pillars and ensure ongoing engagement with industry:

Background

The New Zealand Aquaculture Strategy was launched on 28 July 2006 at the annual New Zealand Aquaculture Conference in Nelson.  At the launch, the Minister for Industry and Regional Development and the Minister of Fisheries announced that government would respond to the strategy.

The aquaculture strategy describes the actions that industry, central and regional government, iwi and science providers will need to take to support the industry's overall goal.  The goal of the aquaculture strategy is that by 2025 the New Zealand aquaculture sector will have sales of NZD 1 billion per annum.  

The aquaculture strategy includes a ten-point plan that sets out the key actions required for its implementation.  The ten-point plan will:

The new sector organisation, New Zealand Aquaculture Ltd, will lead the implementation of the strategy. It is expected to be operating in the first quarter 2007. Government has already made a commitment to the creation of New Zealand Aquaculture Ltd by providing funding of $70,000 from the Regional and Industry Development Fund. This was provided to support its establishment and work programme.

The Proposed Government Response

The proposed response does not address every action in the aquaculture strategy that identifies a government agency as an implementation partner. Instead, the government's response is focused around five pillars:

The pillars are aligned with the priorities of the industry1. Through these pillars, government aims to:

The government response broadens the focus from the implementation of the aquaculture legislation and the regulatory environment to working with the industry to support its transformation. Other pillars considered during the development of this response were environmental sustainability and investment in training, education and workforce promotion. It was agreed that environmental sustainability is pervasive across all five pillars and the industry do not see training, education and workforce promotion as an immediate priority.

Each pillar has a number of specific initiatives. These are the initial commitments that government will make over the next two to three years in response to the aquaculture strategy. In addition to the five pillars and initiatives, the following activities also have the potential to deliver significant assistance to the aquaculture sector:

The Five Pillars and Related Initiatives

The key initiatives under each of the five pillars reflect the need for both immediate progress and the building of strong foundations for the future of the sector. For this reason, the government's response to the aquaculture strategy includes a mix of new initiatives and initiatives already being implemented as part of the work programme of the Aquaculture Implementation Team.3

Pillar 1: Building confidence to invest

The objective of this pillar is to encourage both regional councils and industry to invest in new aquaculture management areas (AMAs) and support the improved use of existing space.  Under this pillar, government support will be focused on establishing good practices, fostering a collaborative approach, and reducing the high transaction costs (for both regional councils and industry), associated with running a robust AMA planning process.

The success of this pillar is dependent on how regional councils and industry manage the following factors, which make certainty around the creation and timing of new AMA space difficult:

Initiative 1: Priority projects to create new AMA space in Northland and Auckland, encourage research and innovation and facilitate regional partnerships

These projects were approved by aquaculture ministers in August 2006.  They aim to encourage:

It is likely that these projects will continue for up to three years, because regional councils and industry are working within the framework of the new aquaculture legislation which is complex and has been previously untested. In addition, challenges to the Environment Court are possible, which could significantly slow progress.

This initiative is being led by the Aquaculture Implementation Team. Support for this initiative will come from existing agency baselines and the $0.900m (excluding GST) that Cabinet has agreed to be allocated from the RMA/CMA Contingency Fund in 2006/07 [CAB Min (06) 44/4 refers].

Initiative 2: Support tools for AMA planning and management

The objective of this initiative is to establish good practices and to reduce the transaction costs, for both regional councils and industry, associated with the creation of new AMAs and the better use of existing space. This initiative will include the development and rollout of support tools by early 2007, including:

This initiative is being led by the Aquaculture Implementation Team. Support for this initiative will come from existing agency baselines and the $0.900m (excluding GST) that Cabinet has agreed to be allocated from the RMA/CMA Contingency Fund in 2006/07 [CAB Min (06) 44/4 refers].

Initiative 3: Contestable aquaculture fund to assist regional councils

A major issue for regional councils is the cost of funding the initial information gathering, consultation, and planning work for a new AMA. This needs to be balanced against competing ratepayer priorities. Government will help address this by providing financial assistance to regional councils to encourage them to invest in aquaculture development from 2007/08. The fund will support the following aquaculture planning activities:

Pillar 2: Improving public support

The objective of this pillar is to improve public understanding of aquaculture, including its benefits and risks, so that individuals and communities can make informed decisions about aquaculture development. Public opposition to aquaculture development is recognised as a key issue for both industry and regional councils and is a major constraint on aquaculture planning. 

Government agencies hold a considerable amount of information on aquaculture, and can help coordinate the provision of timely, independent and accurate information on aquaculture.

Initiative 4: Improving public support for sustainable aquaculture

This initiative will be carried out in partnership with industry and will aim to provide regional decision makers and the public with good, up to date and independent information about the effects and benefits of aquaculture. Public support for aquaculture will be improved using a range of channels and will principally include the following activities:

The Ministry of Fisheries (MFish) will work with industry to ensure the successful implementation of this initiative. It is expected that government can support this initiative from existing agency baselines and the $0.900m (excluding GST) that Cabinet has agreed to be allocated from the RMA/CMA Contingency Fund in 2006/07 [CAB Min (06) 44/4 refers]. Any additional support will be dependent on a strong case being made by industry and satisfactory progress in the implementation of this initiative.

Pillar 3: Promoting Māori success

The objective of this pillar is to equip Māori with the necessary resources to develop a sustainable aquaculture model that takes into account both development and stewardship issues.  This will include actively participating in the AMA planning process and sharing and contributing to the benefits of growth in the sector. 

The aquaculture strategy provides Māori with a number of opportunities to strengthen their existing involvement in aquaculture. Māori are already extensively involved in the aquaculture industry and it is vital to retain, develop, and share their expertise and knowledge.

The following factors have been identified as critical to the success of this pillar:

The initiatives under this pillar do not directly address the provision of pre-commencement settlement space for Māori6 but provide a basis on which the provision of settlement space can subsequently be addressed by facilitating ongoing aquaculture development and by laying the foundation for enhanced participation by Māori in aquaculture.

Te Puni Kokiri (TPK) will lead the implementation of this pillar.

Initiative 5: Priority project to encourage Māori involvement in aquaculture

This project was approved by aquaculture ministers in August 2006. It will help Māori to be active participants in the other priority projects in all relevant regions, by providing support for capability building and strategic planning, and by facilitating commercial ventures between Māori and industry.  Further detail on this project is included in appendix one. 

Support for this initiative will come from existing agency baselines and the $0.900m (excluding GST) that Cabinet has agreed to be allocated from the RMA/CMA Contingency Fund in 2006/07 [CAB Min (06) 44/4 refers].

Initiative 6: Enabling programmes to support Māori in aquaculture

This initiative aims to develop a framework to support Māori participation in aquaculture development.  This will involve agencies (TPK, MED, New Zealand Trade and Enterprise, and the Foundation for Research, Science and Technology) working together to determine if the following government business assistance programmes and regional development programmes can adequately support aquaculture development or if they require modification:

Pillar 4: Capitalising on research and innovation

The objective of this pillar is to support innovation in aquaculture and generate a higher return on investment from existing and new species, products and production techniques.  This will include research to improve the value of existing species and products, but more importantly research relating to new species (e.g. King Fish and Tuna) and products (e.g. nutraceuticals and waste reduction technology).

The aquaculture strategy recognises that the sector is focused on a small number of species (Greenshell Mussels, King Salmon and Pacific Oysters) and that globally, most aquaculture sectors are built on a small number of species.  While a continued focus on these existing species is necessary, it is unlikely to be sufficient to achieve NZD 1 billion in sales by 2025.  Greenshell Mussels and Pacific Oysters are relatively low-value species when compared to other species, such as marine fish.  The New Zealand aquaculture sector must diversify and improve the market revenue of higher-value species. 

In addition to the initiatives proposed below, officials from MfE and MFish are also investigating options for legislative change to better provide for experimental aquaculture. Under the current law, all experimental aquaculture must be conducted within an existing or new AMA.  This process requires plan changes, which are costly and likely to be lengthy in duration. The aquaculture industry see this as a major deterrent to experimental aquaculture.

Initiative 7: Priority project on research and innovation

This project aims to remove impediments to research and innovation and explore options for new aquaculture species and technologies in both existing and new aquaculture space.   Key initiatives include:

This priority project was approved by aquaculture ministers in August 2006 and is being led by MED in consultation with the Aquaculture Implementation Team. Support for this initiative will come from existing agency baselines and the $0.900m (excluding GST) that Cabinet has agreed to be allocated from the RMA/CMA Contingency Fund in 2006/07 [CAB Min (06) 44/4 refers]. Further detail on this project is included in appendix one.

Initiative 8: Support for aquaculture research and development workshops

This initiative will help government facilitate one or more aquaculture research and development workshops in 2007 and kick start the development of the aquaculture research and development strategy.  New Zealand Aquaculture Ltd will take the lead role in the workshops and the development of the strategy.  

These workshops will bring together the industry, research community, environmental groups, Mäori and relevant government agencies to discuss and reach agreement on aquaculture research and development priorities going forward and raise awareness of available funding mechanisms within industry and government.  This information will then be used by New Zealand Aquaculture Ltd to develop a whole-of-industry research and development strategy to inform public and private investment decisions on aquaculture research.

In 2005/06, FRST provided assistance of $6.437m for specific aquaculture research projects through its Research, Science and Technology (RS&T) portfolios.  $4.000m of this assistance was directed towards shellfish.  It is likely that this level of funding will continue for 2006/07 and 2007/08.  FRST is also investing $16.000m in marine environment research in 2006/07.

Opportunities will exist in 2008/09 to re-prioritise aquaculture research projects towards new species and product development.  This will depend on the completion of the aquaculture industry research and development strategy.

MFish, MED and FRST will lead this initiative.  Support for this initiative will come from existing agency baselines.

Initiative 9: Support for ‘transformative' aquaculture cluster development

The New Zealand Aquaculture Strategy and the Food and Beverage Taskforce, acknowledged the need for greater collaboration between science, industry and other relevant stakeholders and greater support for the development of collaborative entities, such as clusters, to facilitate this. 

The development of a transformative aquaculture cluster, bringing together industry and researchers in the aquaculture sector, could be a powerful instrument to lift the innovative capacity and international linkages of groups of firms in the sector.

MED is currently leading a process to develop the tools necessary to better facilitate and align government activity around transformative clusters and firms. This is in response to a concern, from the Minister for Economic Development, that current economic development programmes are too fragmented and dispersed to support transformational economic activity.  This process involves bringing together a range of current funding streams to focus more clearly on the objectives of business assistance as outlined in the Business Assistance Review [EXG (06) 32 refers], and undertake larger, more targeted interventions.

The Minister for Industry and Regional Development has asked MED officials to provide more detailed advice on mechanisms to support larger, more targeted interventions by April 2007, in consultation with the Ministry of Research, Science and Technology, NZTE, FRST, Treasury, the Tertiary Education Commission (TEC) and the Ministry of Agriculture and Forestry. This will be informed by the recommendations agreed to in the Expenditure Review of Business Assistance, particularly those regarding the establishment of priorities for business assistance programmes, and the need for better coordination of policy settings and strategies across government. 

Pillar 5: Increasing market revenues

The objective of this pillar is to support the growth (volume and value) of aquaculture exports in new and existing markets with a particular focus on market access and the identification of market opportunities for new species and products.  The government, and in particular NZTE, has at its disposal the following resources to support this pillar:

Initiative 10: Supporting a New Zealand aquaculture marketing package

This initiative aims to support an industry-led aquaculture marketing package that will include:

Supporting mechanisms for the five pillars

It is recommended that government commit to the following mechanisms to support the implementation of the five pillars, monitor progress, and ensure an ongoing engagement with industry:

Consultation

The following departments and agencies have been consulted and agree with the recommendations in this paper: MfE, MFish, MED, NZTE, DoC and TPK.

The following departments and agencies have been informed: Biosecurity New Zealand, FRST, TEC, Treasury and the Department of Labour.

The New Zealand Aquaculture Council and Te Ohu Kaimoana[8] were consulted during the development of this proposed government response. Local Government New Zealand was consulted during the development of the national position statement on aquaculture.

Fiscal Implications

There are no direct fiscal implications in this paper.

Human Rights

The recommendations in this paper have no human rights implications.

Legislative Implications

The recommendations in this paper have no legislative implications. 

Regulatory Impact and Compliance Cost Statement

The recommendations in this paper have no regulatory impact and impose no compliance costs.

Publicity

MED will prepare, for aquaculture ministers' approval, a publication incorporating:

Recommendations

It is recommended that the Committee

agree/disagree

agree/disagree

agree/disagree

agree/disagree


1The New Zealand Aquaculture Council has prioritised the actions included in the aquaculture strategy.

2The other two being food and beverage and tourism.

3This team is led by Ministry for the Environment and supported by Ministry of Fisheries, Department of Conservation, MED, New Zealand Trade and Enterprise, Te Puni Kokiri, Te Ohu Kaimoana, Local Government New Zealand, and representatives from regional council and industry.

4This is in response to industry concern that some councils may impose financial bonds on consents for marine farming activities.

5The Minister of Conservation is currently undertaking a review of the New Zealand Coastal Policy Statement (NZCPS). 

6Pre-commencement settlement space refers to 20% of marine farming space covered by permits, leases or licenses first issued between 21 September 1992 and 1 January 2005.  The Crown can fulfil its ‘pre-commencement space' obligations by:

7The value:volume ratio of molluscs is 0.69 compared to 2.95 for marine fish: Global aquaculture production by species (volume and value), 2004; Food and Agriculture Organisation (FAO) Fisheries Department.

8Te Ohu Kai Moana Trustee Ltd, is the trustee for the Takutai Trust. The Takutai Trust is the Maori Commercial Aquaculture Settlement Trust, established by the Maori Commercial Aquaculture Claims Settlement Act 2004.

9The other two sectors being Food and Beverage and Tourism.