Agriculture leaders support industry strategy
Primary sector players outline their vision for the future of the vital sector. FARMER INCLUDING Little in Budget for farming innovation
Agribusiness remains a fundamental pillar of New Zealand’s economic performance, KPMG says in releasing its 2012 KPMG Agribusiness Agenda.
KPMG agribusiness head Ian Proudfoot said New Zealand should be achieving much more with the talent, knowledge, natural resources and reputation previous generations have built.
The 2012 KPMG Agribusiness Agenda provides analysis of the opportunities and challenges facing the sector, and is a focus point for discussion and debate.
The survey gathered the thoughts of nearly 100 industry leaders who unanimously agreed the potential for the New Zealand agribusiness sector was significant, Proudfoot said.
The 2012 Agenda calls for clear direction on New Zealand’s agribusiness and food strategy through to 2030.
Key points included that biosecurity was a top priority for industry leaders, Proudfoot said. Maintaining a world-class biosecurity system to protect New Zealand’s economic interests is rated as a priority by 83 per cent of survey respondents. Concerns as to whether enough is being done to protect our border were highlighted by the recent hunt for the Queensland fruit fly in Avondale.
Industry leaders showed little interest in foreign ownership of agricultural land and assets, Proudfoot said.
‘‘The Crafar Farms sale may have caught the public’s attention but industry leaders are more concerned about the negative impact on foreign direct investment (FDI). If the debate is not resolved soon and FDI dries up, this will have a material impact on land values and a consequent impact on debt levels the banks can advance.’’
Eighty-one per cent of respondents see the benefits of creating a pan-industry strategy to encourage people across the primary sector to start talking the same language, Proudfoot said.
‘‘Many industry leaders suggested that we simply can’t afford not to work together. As the only developed country that relies on the primary sector to underpin our economic wellbeing, we have not just got to be as good as the rest of the world, we have to be better.’’
Creating a need for organisations able to take a longer-term perspective on strategic opportunities had sparked much debate around the role of industry good organisations, Proudfoot said.
Industry good organisations are being encouraged to explore the long-term benefits of such initiatives as a more active role in the future in people development, engaging with women in the industry, including independent directors from outside the industry to fill skill gaps, and making inter-generational investments for the long-term good of the sector.
A widely-held perception was that New Zealand is failing to deliver an ‘‘innovation future’’, Proudfoot said.
‘‘We cannot afford to have already passed the golden years of agricultural innovation, and . . . we rely too heavily on the Government to lead the way.
‘‘There is a growing recognition that innovation needs to become part of the day to day job of everybody in every organisation in the primary sector. The agricultural sector would benefit from having more people with the vision to challenge what they are doing to create better outcomes,’’ Proudfoot said. It is likely the primary sector will need to get used to more Budgets like Budget 2012 over the next couple of years, KPMG’S agribusiness head Ian Proudfoot says.
‘‘While the sector continues to support the economy through this elongated period of financial constraint, it can only expect targeted investment of what little there is to go round as rural voters do not win or lose elections,’’ he said.
Looking at the positives for the primary sector in Budget 2012, the Government will continue investment in previously introduced programmes, in particular the Primary Growth Partnership, Irrigation Acceleration Fund and Sustainable Farming Fund. The Government will continue to invest in core science activities through the Ministry of Science and Innovation and the Crown Research Institutes, Proudfoot said.
‘‘On the downside, there is little in this Budget to drive new transformational innovation in the sector. There is little to help foster greater industry collaboration. There is little to increase the supply of young, talented people into the primary sector.
‘‘In reality – and perhaps not surprisingly given the current state of the economy – there is little in the Budget that will help the primary sector to make a step change in its performance.’’
Proudfoot said KPMG had been vocal around the need to target tertiary student funding towards economically valuable courses to ensure a supply of talented people to the primary sector.
‘‘The reforms of tertiary student funding in Budget 2012 presented an opportunity to take a step in this direction but, sadly, this was not taken.’’
New Zealand’s innovation performance was well below that of our international peers, Proudfoot said.
A recent World Economic Forum report ranked New Zealand’s innovation system the 27th best in the world, highlighting as significant issues – low company spending, lack of access to venture capital and lack of availability of scientists and engineers.
‘‘As a small player in the food, fibre and timber sectors, New Zealand will only compete effectively if we are more innovative than our competitors.’’
Initiatives the Government could introduce to help create an environment that addresses the weakness in the innovation environment would be welcome. For instance, facilitating greater access to venture capital through the New Zealand Superannuation Fund, or providing personal tax incentives and grants to leading global scientists to base their research programmes in New Zealand, Proudfoot said.
‘‘The reality is, in the current economic environment, the onus is on commercial companies in the primary sector to commit to investing in the innovation needed to drive the sector forward.’’