Friday, 07 July 2017 10:55

Time farming moved on from low cost to added value

Written by  Jacqueline Rowarth
Jacqueline Rowarth. Jacqueline Rowarth.

Fieldays at Mystery Creek in mid-June showcased New Zealand innovation, interaction and, in some cases, simply imagination.

When the imagination was backed with evidence, facts and data, it transformed to a goal.

That was the case for the KPMG Agribusiness Agenda released on the first day of the Fieldays.

Titled ‘A Recipe for Action’, the 2017 Agenda said “NZ’s future is as an artisan, niche producer of premium quality, safe and sustainable food and beverages, fibre and timber products”.

Lead author Ian Proudfoot is head of global agribusiness for KPMG. He suggests landmark celebratory events should be the focus for the future. This means NZ products on the plate, in the glass or on the body, in carpets or buildings -- when people want to treat themselves to the best. There is increasing evidence to support this belief.

NZ’s historical success in the primary sector was based on low cost production systems and excess production capacity. Although we still produce more food than we can eat (KPMG estimates enough for 40 million people in total), competing in a global market is hugely challenging: other countries have various combinations of subsidies, and lower minimum wages, environmental compliance and welfare standards.

Trying to compete in a low cost market has meant poor returns to producers. Fact.

This year, however, the Ministry for Primary Industries (MPI) estimates that exports from the primary sector will reach $38 billion.

And more data, this time from the OECD, indicate that at 7%, NZ ‘added value’ in primary production is three times the OECD average.

We need to do better in order to achieve returns that will allow the primary sector to increase investment both onfarm in protecting the environment with new technologies, and in the processing and marketing companies in added-value innovation.

In some cases future innovations might involve genetic technologies. The KPMG Agenda reports a global shift in the GM debate, with more focus on outcomes than the technology used to create them.

In NZ, the realisation that orange – and some red and purple -- petunias created through genetic engineering have done no harm but have created bright splashes of colour in gardens, might assist in thinking.

Examples such as the petunias are vital in creating understanding, particularly in rural-urban interaction.

The KPMG Agenda reported that ‘increased rural-urban understanding’ now has 8th priority ranking, up from 23rd in 2016. As well as water, “a range of other matters contributing to the misunderstanding between the communities has been raised”. Among these are the fact that an increasing proportion of NZers were not born in NZ and lack traditional farm links, and the increased effectiveness of environmental lobby groups.

Interaction between rural and urban communities has been enabled at Fieldays. The organisers have increased the mainstream media coverage and the ‘lifestyle’ components, as well as general interest – the tractor pull, kiwi’s best kitchen, Young Farmer debating and, of course, the Rural Bachelor of the Year.

It is of note that many urban people talking with levy bodies were delighted to hear what is being done about the environment and hear the facts on nitrogen, greenhouse gas and food production in comparison with other countries. They were also intrigued by the technological developments and size and complexity of the gear involved.

More good news is that 79-80% of the respondents said ‘yes’ to the question ‘will agriculture be part of New Zealand’s future?’ posed by Nigel Latta and John Campbell two days before Fieldays opened.

KPMG’s Recipe for Action accelerates the sector towards consumers and markets, enabling a more prosperous future for us all. Given that we all eat food, all NZers can and must be involved.

• Jacqueline Rowarth is chief scientist at the Environmental Protection Authority


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