KEY POINTS:
The Government is poised to unveil a $500 million-plus cash injection into a major new research fund to help the country's pastoral and food industries foot it with increasingly stiff international competition.
In a significant announcement expected around lunchtime today, the Herald understands the new so-called "innovation" fund
will be launched with an initial commitment from the Government to provide at least $500 million - with the fund possibly growing up to $1 billion over following years.
The fund is understood to be a joint venture between the Beehive and a wide range of industry groups such as Meat and Wool New Zealand. Crown entities such as AgResearch are also closely involved.
The industries affected - including dairy, meat, wool and fisheries - are also likely to put money into the fund through their research levies.
Prime Minister Helen Clark was saying little about the fund yesterday, other than to confirm that moving from commodity-based production to more sophisticated high-value production in the primary sector was "very much" a Government focus.
"A lot of change has been made in the primary sectors and other sectors, but we still need some quantum leaps," she said.
"We are very much focusing on innovation as a driver of the economy."
The fund is also viewed within the Government as an example of the Administration showing it has plans for the future - something it is trying hard to articulate as it fights to win a fourth term in power.
Primary industry sources approached yesterday by the Herald were excited about the fund, with one describing it as a "win-win" for the sector and the country.
While they were uneasy about talking about the fund before it was announced, one source said the amount of money coming from the Government meant the fund would be meaningful.
Several industry leaders will be at Parliament today to hear the announcement.
It is not yet clear how the fund will be managed, but it appears likely to be decided by Cabinet later this year.
The need for more money to help the food industry compete internationally was discussed in a report by the joint Government and industry-formed Food and Beverage Taskforce in 2006.
In its report, the taskforce said greater investment was needed in research and innovation to develop new "high-margin" products that could meet safety and traceability requirements.
Food products with scientifically proven effects for consumers also needed to be developed.
It was suggested by the taskforce that the Government match new industry funds on a dollar-for-dollar basis to develop a new research strategy for the food industry.
It is understood the Government decided to proceed with the big new fund after assessing evidence that the country's food and pastoral sectors are facing strong competition from high-volume, low-cost food producers from places such as South America.
While an organisation such as dairy giant Fonterra has shown it can develop new, higher-value products so that it is not just an exporter of basic milk products, there is a strong feeling that overall the pastoral and food industries can't rest on their laurels.
