The Government has moved a step closer to negotiating a free trade agreement in the Middle East.
One of the sticking points has been Saudi Arabia wanting live animal exports to resume after a 10 year hiatus.
Last year, the Government launched the NZ Inc Gulf Cooperation Council (GCC) Strategy, which outlines New Zealand’s plans for further developing strong government and private sector relationships with the GCC.
In an address to the Saudi Ministry of Agriculture in Riyadh today, Minister for Primary Industries Nathan Guy said a protocol signed this week will regulate the export of live sheep, goats and cattle from New Zealand to Saudi Arabia for breeding purposes.
It covers animal welfare requirements relating to either sea or air freight, and contains a guarantee that the animals will be allowed to disembark upon reaching their destination.
While New Zealand ceased exporting live sheep for slaughter in 2003, the export of livestock for breeding purposes had continued to grow with cattle, sheep and horses all shipped or air freighted every year.
New Zealand had agreed livestock import health conditions with dozens of countries. Dairy cows were mainly sea freighted to China where just over 35,000 were exported in 2013. Sheep exports for breeding averaged around 400 a year and nearly 3,000 race horses are air freighted annually.
Following the signing Riyadh, it was expected that the first research breeding flock of sheep from New Zealand would be air freighted before the end of the year in order to commence the a Saudi hub operation.
“The protocol signed today is a key part of ensuring the success of an agribusiness hub in Dammam, and cementing in our future relationship with Saudi Arabia."
“Although we have been engaging with the Gulf States over many years, this Strategy puts us at the starting point of a deeper, more complementary relationship,” Guy said.
New Zealand’s trade with the GCC is strong – in 2013 our total two-way trade was $4.82 billion ($1.42 billion in exports; 3.39 billion in imports) - but there is potential to improve this.
Guy also announced that the New Zealand Government has committed $6 million to establish the agribusiness service hub in Dammam.
“Once completed this will be the first of its kind for New Zealand. This farm development on these sandy plains is impressive. It will comprise 15 centre pivot irrigators, a feed mill, a sheep breeding operation, a lamb and cattle finishing feedlot, and processing facility."
“The demonstration farm will also be a model for vertical integration, from cropping to fresh meat supply to the local market. It will be a full showcase of New Zealand agritech including technical services, farming systems, animal health, on-farm equipment, genetics and farm expertise. New Zealand will also provide a genetics programme which will include animals for breeding,” Guy said.
“The scale of this farm, and the potential for New Zealand, is significant. A broad range of New Zealand agribusiness companies are expected to be involved in the demonstration farm and it is hoped that the first services will be installed in Damman by mid-2014.”
In addition to being a substantial investment and project in its own right, it was also expected that this demonstration farm would create other opportunities for New Zealand in this market, fast track partnerships between New Zealand and GCC businesses, and quite possibly open up significant opportunities for New Zealand companies elsewhere in the Arab world.
Guy said he envisaged that this would also provide a much stronger market presence for the export of chilled lamb from New Zealand to Saudi Arabia.
Saudi Arabia is New Zealand’s largest trading partner in the Gulf Cooperation Council.