Key pushing for Korea FTA

Korea is lining up as a strong agricultural trading partner if promising free trade talks are successful, says Prime Minister John Key.

China was not the only developing market seeking New Zealand agricultural products, said Key at his seventh visit in a row at the National Fieldays at Mystery Creek, Waikato.

"Korea has got huge potential. So with Korea we are locked out at the moment and we don't have a FTA,’’ he said.

‘‘We are going up there in a few months time. We are close, very close and one of the big problems in Korea is if you are not going forwards you are actually going backwards because Europe and the United States have an FTA with Korea and it's getting harder for our exporters, particularly our meat exporters, up there."

He said Japan was another potentially strong marketplace if trading agreements developed and there were promising opportunities in Indonesia with trade representatives working to progress red meat exports.

By 2025 the world population was expected to climb to 8.1 billion people and they were getting wealthier and wanted to buy protein. New Zealand would look to keep on working up the "value curve" to sell to wealthier customers, he said.

He said farmers at Fieldays looked in good heart despite the drought and the feeling was overall they would make a good recovery.

The forecasted higher Fonterra payout was washing away some of the fears of the drought for the dairy sector.

"So overall they are vibrant and the car guys (at Fieldays) were telling me they sold twice as many cars as last year. Generally people are upbeat."

He said unsubsidised farmers had to live on their wits and the level of innovation at Fieldays showed the entrepreneurship coming through - as well as the will to succeed.

The drought removed $1.3 billion from the economy according to the Government’s latest estimate in the Budget.

"Well firstly you are a bit helpless and no one wants to hear the Government can't do much, but the reality is you can't make it rain," said Key.

"In fact, actually you will always get floods or tornadoes or whatever it might be, climatic events and droughts they regularly happen and hopefully you can contend with those as much as you can. I think the big challenge we worry most about is the mental well being of those farmers."

Key said the Government was confident progress would be made to strengthen exports to help compensate for the drought.

"There has been a palatable shift of Asia becoming much stronger and... (more) countries want to buy New Zealand products and we are at the forefront of that."

He said the holdup of sheepmeat in China last month was not from the Chinese as they wanted more sheepmeat, infant formula products and other New Zealand products.

The hold-up was traced  to incorrect documentation from New Zealand.

Key said there was always a risk of a banking meltdown or other event, but the reality was New Zealand would do better and not worse in growing exports.