Rural Delivery: Deer industry teaches vital lesson

The outstanding success of 25 years of deer farming in New Zealand shows no signs of abating, writes TREVOR WALTON*.

Twenty-five years after the birth of the New Zealand farmed deer industry, exports of venison, velvet and co-products yield more than $200 million a year and could reach $1 billion before the decade is out.

In Europe, prospects for New Zealand deer appear practically unlimited, with production unable to keep up with the rapidly growing demand.

Affluent consumers are cottoning on to the fact that this naturally grown red meat is tender, easy to cook and doesn't have the strong gamy flavours they associate with shot wild game. Best of all, it is free of mad cow disease, hormones and the other nasties they associate with meats produced in the Northern Hemisphere.

In the United States, where most exporters are united under the Cervena appellation, growth in demand has been slower, but prices are being maintained at the top end of the white tablecloth restaurant market.

On the other side of the industry, research into the properties of antler velvet is being used to spearhead a carefully planned entry into the United States nutriceuticals market - a potential goldmine.

Velvet is the only living mammalian tissue which grows and is shed each year, making it a treasure trove of biologically active substances.

Velvet has been used in China and Korea for at least 2000 years. In Russia, the velvet extract pantocrin has long been used to help restore patients after surgery and to boost the immune systems of cancer patients after chemotherapy or radiotherapy.

Every year, the swag of solid evidence backing velvet's extraordinary properties continues to grow. So much so that marketers are advised not to claim too much for their extracts, pills and powders lest they be seen as low-credibility cure-alls.

The message from the marketing gurus is to create a product for each market niche.

The first target - and it is more like a canyon than a niche - is the multimillion-dollar sports supplements market. Trials have shown that velvet helps athletes recover from strains and injuries associated with intensive training and competition.

In short, velvet helps sportspeople play harder for longer and bounce back quickly afterwards. Hurricanes lock Dion Waller and Olympic triathlete Hamish Carter are two of the growing number of top performers who sing its praises.

At present New Zealand is over-reliant on the volatile South Korean velvet market. But the deer industry has shown it is capable of thinking strategically and responding rapidly to market signals.

It's hard to imagine that the burgeoning nutriceuticals market won't soon become yet another deer industry success story.

At the New Zealand Deer Farmers Association's 25th birthday conference last winter, much was made of the industry pioneers - people like Allen Ford, the Amos brothers and Rex Giles in the North Island, and the legendary Sir Tim Wallis and Sir Peter Elworthy in the south.

But without taking anything away from the vision, drive, energy and sheer guts they have shown, acknowledgement about the role of the Government is long overdue.

The brilliant work done at Invermay Research Centre in Otago, financed by several million dollars from the taxpayer, forms the basis of good deer farming practice.

Then there were the schemes and special partnerships which encouraged thousands of city investors to put their tax dollars into deer investments in the 1970s.

Such schemes are now almost universally scorned. But this criticism ignores the pivotal role tax breaks played in allowing the deer and kiwifruit industries to rapidly achieve the critical mass needed to become viable.

Sure the incentive schemes could have been better targeted and managed, but 25 years later the proof is there for all to see: the deer industry is a success story, creating value for farmers, building exports and providing jobs.

The contrast with the dismal performance of our listed corporates, for whom the playing field has been so carefully levelled and manicured over the past 15 years, could not be much more obvious.

There are a number of lessons from all this:

There need to be entrepreneurs willing to risk everything for their vision - people like Rex Giles and Tim Wallis.

The Government needs to help finance research needed to make their vision a reality.

There needs to be Government encouragement for private investors who are willing to risk their own money in selected entrepreneurial ventures which play to New Zealand's strengths. While this means picking winners, it still leaves it to private investors to shoulder most of the risk.

Fourth, the Government should allow the venture or industry time to find its feet, then it should get out. With the deer industry, it was pure coincidence, but when Sir Roger Douglas' blunt axe fell in 1985 it was about the right time, though it would have led to better business outcomes if investors had been forewarned.

New Zealanders want a First World standard of living. But because our country is at the bottom of the globe and has a small domestic market, it's a very difficult place from which to do business.

But when strategic Government assistance is combined with Kiwi entrepreneurial energy, the results and benefits can be spectacular. The deer industry is probably the best example.

* Trevor Walton is a Wellington-based public relations consultant and publisher of the Deer Farmer magazine.