Expert tips election tension on food, fibre

Food and fibre organisations will have to adapt quickly to the likely changes any sustained recession will bring. Ian Proudfoot , KPMG

New Zealand can expect food and fibre to be a campaign battle ground at next year’s general election, consultant KPMG says.

In its latest issue of Agri Agenda, timed for the start of New Zealand’s biggest agricultural event, Fieldays, KPMG’s global head of agribusiness Ian Proudfoot said 2023 was shaping up to be a difficult year.

“As we move into Election 2023, we can expect battlegrounds to appear around areas of political tension,” he wrote in Agri Agenda.

“It is reasonable to expect our food and fibre sector will become a campaign battleground given existing tensions in the sector (particularly in relation to climate policy) which brings with it the risk of entrenching divisions amongst farmers and growers across the country and between urban and rural communities,” Proudfoot said.

“We have seen the consequences of a fragmenting society here in New Zealand this year, particularly in the occupation of the Parliamentary grounds and the subsequent riots.

“New Zealand is not immune to the societal pressures that are encouraging people around the world to look for candidates offering MAGA (‘Make Anything Great Again’) promises and solutions.”

Proudfoot said global data pointed to high inflation, rising interest rates, employment levels and the issues central banks are facing taking stimulus out of over-stimulated economies.

“These challenges are being faced by many countries around the world and are being compounded by the very significant cost and geopolitical implications arising from Russia’s invasion of the Ukraine.”

The trouble was the Covid-19 pandemic was not over as quickly as hoped and the stimulus stayed in place for years rather than months.

“Food and fibre organisations will have to adapt quickly to the likely changes any sustained recession will bring to the purchasing power of consumers around the world to ensure the resilience of their businesses.”

Current labour shortages would change the way the sector works forever, he said.

“The industry will face continuing competition for talent, making the economics for automation of repetitive roles more compelling; long-term certainty around seasonal labour programmes, more critical; and the investment in future talent pipeline into schools and universities more urgent than ever.”