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Home / Business / Business Reports / Agribusiness report

Agribusiness: Fail to plan, plan to fail

By Damien O'Connor
NZ Herald·
15 Jul, 2015 04:00 PM4 mins to read

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Damien O'Connor, Labour's Primary Industries Spokesman.

Damien O'Connor, Labour's Primary Industries Spokesman.

Investment, innovation and hard work may be wasted if we head in the wrong direction, says Damien O'Connor.

New Zealand is still very reliant on the agricultural and primary sectors to create wealth for the economy in spite of concerted efforts by successive governments to wean us off dependence on the land.

The new and emerging weightless economy, where clouds deliver information and profits, not water and floods, is the world of students and entrepreneurs.

Though the only sign of our biggest industry in Auckland may be the new Fonterra headquarters, export revenue generated by the dairy sector keeps the economy of New Zealand and the city rolling.

But questions of where our primary sectors are heading are beginning to emerge as dairy returns to farmers halve, logs continue to be exported without any value-added processing, and arguments in the meat sector strangle the enthusiasm of our sheep farmers.

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The wider public are, rightfully, demanding cleaner waterways and fewer emissions from the primary sectors where nature still plays a big part in the success of individual business operators.

A growing number of farmers and stakeholders are looking for direction and leadership to guide their everyday business decisions on crucial issues like fertiliser use, breed selection and planting of trees.

Any sound business or industry would have in place a strategic vision and plan to refer to when making such decisions. The unfortunate truth is that aside from horticulture, every primary sector lacks a vision, a strategic plan or sustainable pathway to guide the committed and hard working stakeholders who underpin our economy.

This major vacuum means the investment, innovation and hard work may be wasted if we head in the wrong direction.

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Major mistakes on issues of sustainable land use, genetic engineering, animal welfare or product integrity could seriously undermine our hard-won international reputation built on a heritage of hard work, Kiwi ingenuity and trust. We desperately need a long-term view at this critical time for agriculture.

From the setting up of the Dairy Board, the co-ordination of the kiwifruit industry, the removal of subsidies and the setting up of Fonterra, Labour has shown leadership when it is crucially needed.

Issues facing agriculture -- such as water quality -- have been acknowledged and are being addressed, but others such as genetic modification, intensification away from pastoral feeding and brand development float in a stormy sea of market confusion.

No one body or person has taken up the challenge of providing a vision and direction for New Zealand agriculture other than the basic goal of providing protein and fibre to meet a growing global demand.

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The recent excellent KPMG Agribusiness Agenda is another in a line of critical analysis that identifies the core needs of agriculture.

Protection from unwanted biosecurity invasion of pest or disease is paramount.

Attracting highly motivated and skilled people is essential but failing. Building and protecting a brand that places our products in the highest value markets in the world is the only way for farmers to survive without subsidy or protection.

Investing in leading edge technology and food innovation must be improved to stay ahead of international competitors who are winning in our traditional area of low cost advantage.

Primary sectors need creative and leading edge science now to give us a new viable position in an increasingly competitive international marketplace.

If we lose more creative thinkers and scientists because funding continues to be misdirected then our future is at risk.

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If we fail to plan, we plan to fail and this is the reality facing the future of New Zealand without real change in the primary sectors.

Raw logs, unprocessed meat carcases, basic milk powder and greasy wool should be the basis of New Zealand manufacturing sectors, not the unfinished exports that form an increasing part of our primary sector output because value-add processing is cheaper elsewhere in the world.

Damien O'Connor is Labour's Primary Industries Spokesman.

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