Agribusiness and Trade: Nicola Shadbolt - NZ's role in feeding the world needs to be recognised

Nicola Shadbolt. Photo / Supplied

OPINION:

When I hear people saying we are irrelevant when it comes to feeding the world because we produce such a small percentage of global food, I realise how little is understood about the global food map and the role New Zealand plays in it.

The global food map reflects the balancing of interconnected supply/demand dynamics between countries. In many cases what is grown is highly perishable, so little is traded across borders, as a result markets are thin and highly volatile. For example, NZ produces about 2 per cent of global milk yet is responsible for a third of what is traded (only 9 per cent of global production crosses borders), similarly, a third of sheepmeat traded comes from NZ and for kiwifruit, it is well over 50 per cent. Our expertise, therefore, is not just in production but in getting products to distant markets — product stabilisation, packaging, storage, supply chains.

Importantly the balancing that occurs is fundamental to global food security; it is not a matter of whether we feed the rich or not, it is about whether everyone gets fed. The key decision-makers in meeting this goal are a combination of the farmers themselves (do I produce food, feed, fibre, fuel, ecosystem services etc with my land) and the industries and legislators who influence them with sticks and carrots.

In unpicking the supply/demand dynamics, the growth in demand for food has been inexorable not only as the world population has grown but as people have been pulled out of poverty. Three decades ago, 2 billion people lived in absolute poverty; by 2018 that figure had more than halved, with China playing a big part in that reduction. Their increased spending on higher quality/nutritious food as well as that of the burgeoning middle classes is well documented. To put this into perspective for dairy nutrients the annual increase in demand globally has been the equivalent of all of NZ's production, every year; global demand has increased by 2 per cent a year, and China's demand has increased by 3.1 per cent. For New Zealand we have always had a comparative advantage in meeting this demand; we have for many years supplied those countries that are not self-sufficient in the nutrients we produce and have also been able to achieve seasonal complementarity due to being southern hemisphere producers.

The supply dynamic is subject to a number of uncertainties that have had a large impact on price volatility, especially in those thinly traded markets. The supply shocks have been caused by disease (foot and mouth, swine fever, avian flu, PSA), as well as climate extremes, and geopolitical influences such as protectionism and war — the Ukraine situation is a very real example of that right now.

While food security is often debated and legislated for at the country specific level it is a global phenomenon and one that NZ plays a key role in due to our ability to supply. That ability is as described above, not just the products but the technology and systems that make it possible to get food where needed. The world is in the most precarious place with food security it has been in for many years, so NZ's role in feeding the world needs to be clearly recognised and not diminished.

There are three key issues now for global food security to contend with:

• Cost of production increases — labour, fertiliser etc
• Availability — supply shocks and geopolitical barriers to trade
• Affordability — inflation and price increases pushing people back into poverty

Mutual benefit between countries is created not just by matching supply and demand dynamics though, it also requires high quality relationships with genuine reciprocity throughout the value chains.

Mutual benefit can begin in the pre-competitive space, developing meaningful connections amongst scientists to address global issues and create step changes in science and innovation collaboration and delivery. Technology, for example, that will increase food supply and reduce the reliance on labour and impact on the environment.

Collaboration that will involve two way exchange of scientists and students.

There are some very good examples of high quality business relationships between NZ and China that have been built up over a number of years, as evidenced from the other panel speakers.

Reciprocity will enable NZ to deliver a secure stable supply of safe nutrients that are complementary to domestic production. If global food security is to be addressed it is not "either-or" it is both.

• Nicola Shadbolt is Professor of Farm and Agribusiness Management at Massey University. She is currently Chair of Plant & Food Research, a Climate Change Commissioner and is on the executive board of the International Food & Agribusiness Management Association (IFAMA).