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Growers, keen to feed into new export markets, are fuelling a renewed optimism in agriculture.
Horticulture is part of New Zealand’s clean, green future, according to a report released last month which suggests taking 1.5 million hectares of land from pastoral farming and converting it to horticulture. Story page 30. Cover graphic: Hope Walker.
That’s according to a report commissioned by Globe NZ released last month which suggests in the promising ‘Innovative NZ’ scenario that 1.5 million hectares are taken from pastoral farming and converted to horticulture by 2050. This would mean 1,400% more land for horticulture.
The report – Net zero in New Zealand, scenarios to achieve domestic emissions neutrality in the second half of the century – states that livestock numbers should be reduced, and in one of three scenarios this frees up a total of 3.2 million hectares for other uses, particularly horticulture and trees.
Worldwide there is a movement by consumers away from animal based products, especially by millennials.
New Zealand won’t meet current emissions targets with existing land uses, the report says.
Agriculture accounts for almost half of New Zealand’s total emissions, predominantly from enteric fermentation in animals, highlighting the need to reduce livestock in general by 20% to 35%. Under the Innovative NZ scenario presented in the report, emissions could be reduced by 65% to 75% by 2050 with a movement in land use to horticulture and forestry.
The current carbon price is $17 per unit, however by 2050 the study predicts a medium price range of $50 to $100 meaning increased energy and input costs for growers.
Hort NZ chief executive Mike Chapman says the report’s conclusions confirm what Hort NZ has been saying for some time about the growth and potential of horticulture in New Zealand.
He is however concerned about the increasing price of carbon expected at the extreme to be more than five times today’s price and how that will affect some growing operations. More needs to be done to accommodate these growers, and help their businesses prosper in a low carbon future.
“The promising Innovative NZ scenario supports our policies around land and water use, and food security, as well as our industry profile of inter-generational sustainable use of the environment.
“This scenario is a holistic approach towards sustainability complementing our existing practices.”
The report was prepared by Vivid Economics for GLOBENZ, comprising a cross-party group of 35 members drawn from all political parties.
Rabobank says 2017 has begun on a positive note for the country’s farmers, with rural confidence levels edging up, primarily driven by signs of renewed optimism among horticulture and beef and sheep producers.
Rabobank New Zealand general manager for country banking Hayley Moynihan said horticulture producers and sheep and beef farmers had shown signs of increasing optimism about the agricultural economy. The overall net confidence reading in the horticulture sector climbed from +26% to +39%, while among the sheep and beef sector, confidence moved out of negative territory, from -5% to +9%.
“There has been cause of optimism across these sectors recently,” she said. “Horticulture had an exceptional year of production and export growth in 2016, and a similar performance is expected in 2017.”
Horticulture producers were increasingly optimistic in their expectations about business performance with the net measure climbing from +19% last survey to +44%. “Rising demand from Asian markets continues to be a key source of growth for horticulture exports – and this demand is being met by large harvests of gold kiwifruit coming online and a record crop expected from apple growers this year,” Ms Moynihan said.
Farmer investment intentions increased further this quarter, and are at the highest level since the end of 2014. The number of farmers expecting to invest more in their businesses in the next 12 months rose to 31% (up from 28%), while those intending to reduce investment declined to just 7%.
Expansion plans in horticulture are seeing this sector, in particular, lead the investment charge, Ms Moynihan said.
“On the back of strong business optimism, planting and re-planting of new orchards is taking place in principal horticulture sectors with the aim of feeding into new export markets,” she said.
“Horticulture had an exceptional year of production and export growth in 2016, and a similar performance is expected in 2017.”