The Cost of War on Our Primary Sector

Fertiliser costs, including urea, have risen by more than 50 percent in the last month, while fuel distribution constraints have been adding further uncertainty due to heightened demand.

For our rural communities, these are not small changes. They translate directly into higher input costs, tighter margins, and increased pressure on day-to-day operations.

Our primary sector drives export earnings, supports regional employment, and underpins our domestic food supply. But as a trading nation we are also highly exposed to global volatility, particularly when it comes to imported fuel and fertiliser.

Farm margins are tightening under the weight of rising diesel and input costs. If these pressures continue, the implications go beyond individual businesses. They affect production decisions, future investments, and every stakeholder that relies on our food system - from farmer to plate.  

Fuel availability is also a real concern - in this case it’s whether the fuel will be there when it’s needed.

That’s why it’s important to ask: has the Government estimated the cost of war on New Zealand’s primary sector yet, and are they prepared to step in to help the sectors that need it most?

There is a strong case for practical, targeted support. Recognising the primary sector as a top priority in the fuel prioritisation framework could help ensure continuity of supply. Targeted support for the most margin-squeezed sectors, including maize and vegetable growers, could help maintain business confidence and production.

Strengthening fertiliser resilience, including exploring domestic procurement options, would reduce our exposure to ongoing global volatility. Private investment has been signalled, including Victoria Hydrogen’s proposed $3 billion urea plant in Southland. This represents a step toward reducing reliance on imported urea, but key inputs such as phosphate rock, potash, sulphur, and products like diammonium phosphate would remain imported, meaning New Zealand will continue to rely on global markets for much of its fertiliser supply.

The Government has a clear role in ensuring complementary investment in research and innovation that supports the primary sector. For fertiliser resilience, that could include improving how inputs are used and recovered to reduce waste and improve efficiency. Instead, recent reallocations and ongoing restructuring across the science system - including further cuts to R&D linked to the primary sector - risk undermining our long-term security.

There is no quick fix, but that makes sustained investment even more critical. Scaled up, coordinated funding in areas that directly support the primary sector, such as nutrient efficiency, recovery from waste streams, and alternative inputs could reduce our vulnerability over time. Without this, we risk remaining exposed to global volatility.

Doing nothing and hoping conditions improve is not a plan. This Government needs to recognise that reality and respond to this honestly with rural New Zealand. Our primary sector should not be left to carry these pressures alone.