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Home / Business / Companies / Agribusiness

<i>Owen Hembry:</i> China deal will beef up market position

Owen Hembry
By Owen Hembry
Online Business Editor·NZ Herald·
6 Apr, 2008 05:00 PM8 mins to read

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Owen Hembry
Opinion by Owen Hembry
Business news editor, NZ Herald
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KEY POINTS:

The advantage of being the first country to sign a free trade agreement with China will strengthen the meat and wool industry's ability to defend its market position, says Meat & Wool New Zealand chairman Mike Petersen.

"New Zealand exported $170 million worth of raw wool to China
in 2007," Petersen says. "China has a high demand for wool and this is expected to increase and so an FTA that provides for improved security for New Zealand wool will be valuable."

China is New Zealand's fourth largest trading partner with $1.7 billion of exports and in the year ending June 2006 imports totalling $4.4 billion.

China accounted for nearly $63 million of sheepmeat and beef exports last year.

"China continues to develop rapidly and has a growing middle-class population looking to increase its consumption of protein like beef and lamb," Petersen says.

Meat exports have been attracting tariffs of between 12 per cent and 25 per cent.

"An FTA that provides for improved meat access conditions will put New Zealand in a good position to meet this demand."

GREENER PASTURES

New Zealand plant breeding and research company Agriseeds is teaming up with scientists in Australia and the Government in a $6 million project to develop better pastures.

For five years starting in July the collaboration will develop pastures with greater water efficiency, tolerance to heat, insect resistance and improved animal health.

Naturally occurring microscopic fungi called endophytes, which live inside the plant cells, will be used to improve the performance of the commonly sown perennial ryegrass.

Marketing director Murray Willocks says endophytes were very important in pastoral farm systems.

"Because of their relationship with plant survival and performance, they hold the key to increased farm productivity through increased milk and meat production," Willocks says.

"A small number of endophytes has already been commercialised in NZ, with some exciting results for farmers."

Australian research group Molecular Plant Breeding CRC will stump up $3 million of the cost and undertake a great deal of the work, while Agriseeds and New Zealand Trade and Enterprise will each invest $1.5 million.

"The extra Crown investment that has just been announced means farmers will benefit from the results of that research much more quickly than if it continued to be solely privately funded," Willocks says.

Molecular Plant chief scientist German Spangenberg will head up the project.

"We are very excited about this development," Spangenberg says. "Being awarded Government funding for further endophyte research means we will be even better placed to deliver those pastures in the future."

SQUIRT SQUIRTED

Scientists have found a simple cure for a threat faced by mussel growers from sea squirt - water.

Or to be precise, freshwater.

Sea squirt, or didemnum vexillum, is a spongy-textured, light-mustard-coloured marine organism that arrived in New Zealand on the hull of a steel logging barge from the Philippines and by 2005 was spreading through the Marlborough Sounds.

Research looked at killing the sea squirt by dipping mussel seed stock in vinegar and bleach but if the seed stock was exposed for too long it died.

But Marine Biosecurity Group senior scientist Barrie Forrest says tests using freshwater - a possibility he had examined earlier - showed excellent results.

"We found that greenshell mussels have a surprisingly high tolerance to freshwater," Forrest says. "You can leave them in it for as long as three days with very little effect on their survival and we have successfully killed didemnum by immersing infected seed stock in water for as little as one hour."

The research was funded with $42,000 from Aquaculture New Zealand and the Foundation for Research, Science and Technology.

Didemnum has infected five farms owned or managed by Apex Marine Farm, which is experimenting with the freshwater treatment.

Owner Bruce Hearn thinks Apex is winning.

"I inadvertently spread the sea squirt myself by growing spat in Tory Channel and then transferring it to various properties without realising the didemnum was present."

Marlborough Mussel Company's Aaron Pannell says the industry already loses up to 15 per cent of seed stock through fouling.

"If didemnum got established it could take another 20 per cent of our seed out and really threaten the industry," Pannell says.

"For a relatively small number of research dollars, industry has received a beautifully simple and effective solution."

A steaming bowl of mussels grown from seed stock cleaned with freshwater certainly sounds so much more appealing than one cleaned with bleach.

SHEEP GENOME

Researchers striving to map the sheep genome have achieved the first assembly of a draft sequence.

AgResearch senior scientist John McEwan says it is the biggest sequence assembly project attempted in New Zealand and Australia, with more than 9.7 giga bases of sequence generated from six sheep.

Meat & Wool research and development manager Max Kennedy says the initial assembly allows scientists to use the genome sequence directly for the first time and is a step towards identifying DNA variants.

"This will enable researchers to accurately position DNA variants on the genome," Kennedy says. "The identification of these variants is the primary goal of the next phase of the project."

It is a costly undertaking but the later benefit to farmers will be significant, he says.

The mapping of production traits to specific regions of the genome is hoped to be completed by the end of 2009, when it will be used commercially for selecting better animals.

The New Zealand and Australian researchers who created the draft sequence assembly are part of the International Sheep Genomics Consortium - a collaboration between scientists from 16 countries.

GREEN WINE

Corbans Viticulture has become the first grape propagation nursery to be accredited by Sustainable Winegrowing New Zealand.

Chief executive Dennis Lunken says to maintain the industry's profile as a premium wine producer all sectors must be committed to best practice.

"This commitment should not only be from technological standpoint but also include the best possible environmental practices from the nursery to the winery to underpin the country's clean green image," Lunken says.

New Zealand Winegrowers wants the whole industry working under Sustainable Winegrowing New Zealand or an alternative independent scheme by 2012.

Corbans-owned Cottage Block Hawke's Bay Chardonnay 2006 won the first Bell Gully Champion Sustainable Wine Trophy at the Air New Zealand Wine Awards held in Christchurch last year.

Sustainable Winegrowing was launched in 1995 and is an initiative by New Zealand Winegrowers to provide a framework for best practices that protect the environment.

New Zealand Winegrowers chief executive Philip Gregan says about 70 per cent of the industry is covered so far, including between 700 and 800 vineyards and about 70 wineries.

There are a number of reasons for the initiative including market expectation, Gregan says.

"It's the right thing to do, it's the right thing for the environment," he says.

"Farmers generally have an inter-generational view of the land and they want to pass on the land to their children, successors, in at least as good a shape as they got it in the first place."

Another reason for being sustainable was the view that the fewer interventions in the vineyard and winery the better the wine.

I'll drink to that.

GM CROPS

Genetically modified pastures are coming - maybe not for a few years but the countdown has started.

This is the view of several people at last week's annual biotechnology conference.

Future debate was expected to be more informed and perhaps less emotional than in previous years. But the proof, as they say, will be in the pudding.

Genetically modified pasture crops are not banned but we are waiting for a successful applicant to step up.

When an application is approved to release a genetically modified product, what will the public reaction be?

Shrugging of shoulders or unfurling of banners?

The global population is growing, food is getting more expensive, there is pressure on land use and in some countries a genetically modified crop that could grow more on less water, survive a harsher climate and predators might be considered heaven sent.

Genetically modified crops are being used overseas and some can be traced back more than a decade, but in a non-GM environment there will always be the perception of letting a genie out of a bottle.

Arguably the public is also more informed about nuclear power, although some people in nuclear-powered countries who accept the need will still not necessarily approve its use.

But would the public here go nuclear? Seems unlikely. So what chance GM?

The countdown may have started but just ask Nasa - a stop watch can always be paused.

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Small Business

Will a Free Trade Agreement with China be good for us?

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