Time for a new approach for NZ agriculture - KPMG

Business Reporter·NZ Herald·

13 Jun, 2017 05:00 PM3 mins to read

The KPMG report says bold action is needed on water and the environment. Photo / File

Farming needs to change its volume-based approach to a more market, value-based focus, international consultancy KPMG says.

In its latest edition of Agribusiness Agenda, a publication based on contributions of more than 100 industry leaders, KPMG said success of the agri-food sector was dependent on individuals across the industry placing consumers at the centre.

Ian Proudfoot, KPMG's global head of agribusiness, said New Zealand historically had placed most if its focus on maximising production.

He said when volume is paramount, governments tend to set the rules.

"However, as organisations pivot towards markets and consumers, the rules that shape the future are no longer determined by the domestic government but by much tougher masters, the consumers to whom they sell," Proudfoot said.

While the government was not responsible for securing the value lift, it can be an "enabler".

Proudfoot said creating and capturing value fell on people and organisations involved in the industry, including farmers, processors and exporters, industry good organisations, councils, Maori trusts, iwi and service providers.

"Only by the whole industry seeking ways to work collaboratively will the pivot from a producer-focused, volume-based culture to a market-focused, value-based culture be achieved sufficiently quickly to capture the opportunities available to it," he said.

The Agenda looks at what needs to be done to capture more of the quarter of a trillion dollars New Zealand products realise in-market and make a greater contribution to New Zealand's prosperity.

This relies on the industry collectively shifting its focus towards the consumers of the food and beverage, fibre and timber products it produces, Proudfood said.

The impact that structural changes in the Agri-Food sector globally, driven by innovation and consumer preferences, will have on our traditional markets was not widely understood. "Some have the potential to literally vanish overnight, so there is no place for any comfort or complacency."

In its Agenda, KPMG said there was a significant difference in business leaders' outlook in the lead up to this year's election compared to three years ago, when concerns about the impact regulatory changes would have on the sector's productive capacity dominated the conversation.

As the election nears, Proudfoot said November's poll hardly rated a mention, with conversations instead centring on the expectations of consumers and the community.

Innovation has become an integral aspect of a complex agricultural system as we compete with many challenges; food and nutrition security, health, environmental changes and sustainably managing the planet's resources.

"To reinvent the food system, new farming models are challenging tradition norms as we seek opportunities to better embed food production systems to our day to day lives to nourish the world," KPMG said.

In the years 2005 to 2015, the amount invested in agri tech has grown from US$100 million, to US$4.2 billion.

Markets have recognised the opportunities, and are investing to disrupt with a clear purpose addressing the issues facing the global food system, it said. KPMG said "blockchain - the technology that underpins the alternative cryto-currency Bitcoin, is emerging as a way to tackle food safety.