Dairy has huge potential within the 16-country Regional Comprehensive Economic Partnership (RCEP) trade agreement, says Agriculture and Trade Minister Damien O’Connor.
Anybody determined to spread the word about the importance of agriculture to New Zealand can get hold of some helpful facts from a report by the NZ Institute of Economic Research (NZIER).
The NZIER report: ‘How does the dairy sector share its growth?’ was commissioned by the Dairy Companies of NZ (DCANZ) but it contains information on far more sectors than just dairying. And it highlights the critical role that the agricultural sector plays in NZ’s economic health.
Former Prime Minister Sir John Key last year emphasised the importance of exports which “ultimately fuel the NZ economy” in a speech to the National Party.
He pointed out that with a small population base there are limits to how far the domestic economy can grow: “ultimately it stalls due to lack of skilled labour, so infrastructure gets log-jammed, immigration drops off ... and business gets frustrated”.
Almost 75% of the export dollars come from the primary sector: the latest Ministry for Primary Industries figures indicate 74%. In 2018, dairy contributed $17.2 billion, meat and wool contributed $7.3b, wood, pulp and paper $6.1b, horticulture and viticulture $4.8b and seafood $1.6b.
The export dollars are earned for NZ by thousands of people working on the land, in the support industries and in the processing plants.
NZIER estimates that dairy farming alone is the fifth-biggest contributor to the domestic economy (behind banking, construction, residential property business and hospitals) and directly employs almost 40,000 people. Of further note is that the primary sector supports other sectors through direct purchase of products and services.
The wider dairy sector has been estimated by NZIER to support about 33% of all industries in the NZ economy (40 industries for dairy farming accounting for 41% of GDP and 33 industries for dairy processing accounting for 29% of GDP).
However, for people who want to see fewer animals in agriculture and a de-intensification of food production systems, the economy and employment are not generally as important as the environment.
Good news in this area is that the Legatum Prosperity Index, released in November last year, ranks NZ second in the world (behind Norway) overall, and fourth in the environment (the quality of the natural environment, environmental pressures and preservation efforts), behind Slovenia, the United Kingdom and Finland.
NZ achieved top ranking in social capital (measuring the strength of personal relationships, social network support, social norms, and civic participation), second in governance (which includes democracy and political participation, and rule of law), the business environment (entrepreneurial environment, business infrastructure, barriers to innovation, and labour market flexibility) and personal freedom (national progress towards basic legal rights, individual freedoms, and social tolerance).
Of course, we want to do even better in future in all areas, but moving up in wealth (14th), health (17th), education (18th) or safety and security (24th) requires income, and that will take more of the innovative agriculture that we are already encouraging.
NZIER points out that agriculture is a huge investor in R&D and follows through with improved efficiencies of production onfarm, new processing investment and new products. Not just infant formula, but UHT, milk from sheep, goats and deer – as well as cows -- and nobody should overlook the importance of mozzarella….
But basically it is employment in the countryside that creates the raw product that can then be processed for export. The new money coming into the country through sales allows improvements in wealth for everybody as well as in well-being.
NZ is already leading the way in matching people, land and production systems, and in maintaining the environment. That is why farming tours come here – to learn. And the urban tourists come here to admire.
In 2019 we can do an even better job; another great resolution to make.
• Dr Jacqueline Rowarth CNZM CRSNZ HFNZIAHS has a PhD in soil science and has been analysing agri-environment interaction for several decades.