KEY POINTS:
Almost a billion dollars of new Government funding will start to reverse 20 years of falling agricultural investment, says AgResearch chief executive Andrew West.
The NZ Fast Forward fund was launched yesterday with $700 million of Government cash aimed at pastoral and food industries.
With interest, this is
expected to grow to about $1 billion during the next 10 to 15 years.
The new funding would start to reverse a real cut in on-farm government research funding of roughly 70 per cent since 1984, Mr West said.
"Up till now we've been trying to diversify the economy away from food and textiles on the basis that they're sunset industries."
The move was not an election-year event, he said.
"This is not opportunistic. This is a fundamental rethink, and that's why it's so encouraging."
The Government was to be congratulated, although Mr West was concerned that private investment might not be eligible for a tax credit.
"That puts a very substantial disincentive on the private sector," he said.
"I think the Government is going to have to clean that one up if this whole mechanism is really going to fire."
The money would have a reasonably significant effect on New Zealand's research spending rate of 1.2 per cent of gross domestic product.
Mr West defended the use of taxpayer money.
"This is just another example of where society thinks collectively. It's in its interest to fund a certain amount of science as opposed to asking private individuals to fund everything."
Meat & Wool chairman Mike Petersen said an expectation that industry would match the Government contribution could be a challenge.
"It's not just finding the money from industry," he said.
"It's also having enough researchers around to be able to do the work, enough education people ... to pass on the skills."
The agriculture sector was already one of the biggest investors in research and development in the country.
"The Government is saying there's an opportunity now to try to build on that investment and that innovation, so the challenge is really up to the industry to now match that funding and take it to the next step."
Kiwifruit exporter Zespri had been invited to sit on a committee to design the governance framework.
Chief executive Tony Nowell said the company - which invested about $8 million a year in innovation - had several seedlings under evaluation and would consider how to take advantage of the new funding to increase the probability of delivering another leading variety.
Fonterra chief executive Andrew Ferrier said the initiative's focus on sustainable pastoral systems was welcome in light of New Zealand's commitments to the Kyoto Protocol on greenhouse gases.
"It is important for the health of the economy that we achieve profitable production growth and it is equally important for the health of the environment that we achieve this growth through sustainable farming practices." he said.