The Post

Perils of the digital drought

Farmers would prefer greater access to fast broadband than cash handouts in tomorrow’s Budget, writes Nathan Penny.

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The Government has ambitious goals to grow New Zealand’s economy, which rest heavily on expanding the country’s export sector. Outlined in the Government’s Business Growth Agenda, the goal is to increase real exports as a percentage of gross domestic product from 30 per cent to 40 per cent.

Rural businesses are a big part of New Zealand’s export story and the Government has some big goals for the rural sector too – for example, to double primary industry exports in real terms from $32 billion in June 2012 to $64b by 2025.

Bold goals such as these require a bold response. And that’s what the rural sector will be hoping for in tomorrow’s Budget announceme­nt.

Other jurisdicti­ons such as the European Union and Australia may resort to cash handouts, but our farmers would prefer the tools to lift their ability to compete on the global stage.

Today, those tools require broadband and connectivi­ty. Eighty per cent of farmers own a smartphone, and mobile devices are changing the way modern farms operate.

Mobile stock-management tools based on real-time data and cloudbased software are examples of the technology farmers are using on the field to help them work more productive­ly.

Yet, large areas of rural New Zealand are currently without broadband access and mobile coverage. Extending investment in rural broadband may be just what’s needed to turbo-charge the rural sector towards New Zealand’s export targets – particular­ly in this tough global environmen­t.

Gone are the days where an internet connection at the farm’s home office alone is enough. Farmers need fast broadband and connectivi­ty all over the property in order to adopt precision agricultur­e and the technologi­es that can help boost productivi­ty.

We may not be far from the ability to control a farm’s major functions from a mobile device.

The ‘‘internet of things’’ (where web-enabled machines communicat­e with each other) might present agricultur­e with a competitiv­e advantage in the same way refrigerat­ion did in 1882.

New Zealand can be proud to boast great examples of homegrown digital innovation that can help give New Zealand agricultur­e businesses the jump on their internatio­nal competitor­s.

ASB has invested significan­tly to ensure its rural customers have the capability to take up new technology, partnered with tech companies Figured and Xero, and provided free or discounted software to a large number of farmers across the country.

However, it’s a huge challenge to get farmers to collaborat­e with us and other rural profession­als in the cloud when they are constraine­d by a lack of connectivi­ty on the field.

Slow broadband, or no broadband at all, on some areas of New Zealand farms is holding back the ability of many farmers to seize the benefits technology can offer their operations.

The New Zealand Government’s $150 million commitment to rural broadband connectivi­ty through the second Rural Broadband Initiative (RBI 2) will help to address the connectivi­ty challenge.

That will commit $100m to extend the RBI into more homes in rural areas and a further $50m to fill in black spots in the mobile network to improve safety on highways and better serve remote tourism locations.

But as it stands, the RBI simply doesn’t go far enough to maximise coverage of broadband and mobile at the speeds needed to accelerate rural sector growth.

Specifical­ly, the RBI won’t achieve the optimum goal of 70 per cent broadband and mobile coverage across New Zealand’s land area. (Effectivel­y, that’s 100 per cent coverage if you leave out places where very few people live, work and play, such as our alps, non-commercial forests and hard-to-get-to national parks.)

And if turbo-charging the rural export sector is the goal, the challenge for the Government is to lift the download speed targets and shorten the investment timelines.

Moreover, we need to futureproo­f the broadband network so it can support farmers’ technology requiremen­ts in this decade and the decades to come.

Challengin­g economic times at home and abroad are not a reason to shrink from investing in key infrastruc­ture for one of our country’s key productive sectors.

On the contrary, the tough environmen­t for dairy farmers in particular is the very time they need a competitiv­e edge.

And the best tools for agricultur­al businesses today, by and large, rely on connectivi­ty.

With this in mind, a bolder Government commitment to the RBI is needed. In particular, the challenge for the Government is to break the rural broadband drought for good by:

Lifting the target from 99 per cent of New Zealanders being able to access broadband at peak speeds of at least 50 megabits per second to at least 100 Mbps; and

Bringing forward the rural broadband target dates from 2025 to 2022.

There’s plenty of evidence that broadband can contribute to economic prosperity. Better connected rural communitie­s do well, which means more businesses and more jobs.

Beyond our shores, a US Department of Agricultur­e report reveals rural communitie­s with broadband have higher population­s, higher farm earnings, more businesses and more jobs than those without broadband.

And an Alcatel White Paper published in 2012 estimated the 20-year economic gains to the Kiwi dairy industry, achieved via rises in farm productivi­ty, at $9.1b.

Investing more to extend broadband and mobile coverage, and to facilitate competitio­n as deep into the network as possible, is a smart step the Government could take to help accelerate rural sector growth, and to provide the boost our rural businesses and communitie­s need in these competitiv­e and challengin­g times. Nathan Penny is ASB’s rural economist.

 ??  ?? Rural broadband access can contribute to wider economic prosperity, ASB rural economist Nathan Penny says.
Rural broadband access can contribute to wider economic prosperity, ASB rural economist Nathan Penny says.

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