KPMG's Agribusiness Agenda: Bill Bennett highlights megatrends affecting New Zealand.
Biosecurity remains the top priority for New Zealand's agribusiness leaders. It has topped the list for the last nine years in the survey conducted for KPMG's Agribusiness Agenda report.
As the minister for agriculture, Damien O'Connor, points out in his foreword to the report, "a robust and well-funded biosecurity system is essential for our food and fibre sectors."
He says it remains a priority for his ministry and notes significant challenges, including the recent fruit flies found in Auckland suburbs, the stink bug and the continuing work to tackle Mycoplasma bovis.
KPMG's Ian Proudfoot notes the question of government-industry collaboration and cost-sharing to manage the biosecurity risk also moved into the top 10 priority list.
Two other priorities moved up the list and into the top 10: the need to impose penalties on farmers who fail to protect their livestock and delivering research and development incentives to support innovation. The fastest rising priority is taking practical steps to minimise food waste.
This, and the idea of penalising farmers who don't look after their livestock are clearly in line with KPMG's conclusion that the list highlights the challenges the agribusiness sector faces with the "social licence it needs to operate".
New Zealand's agribusiness sector is an export industry. It only exists in the context of what happens elsewhere in the world. KPMG's look at the global forces likely to have an impact on the sector identifies a number of mega-trends and singles out two in particular: how the transition to a low carbon future is unstoppable and the fusion technologies that are accelerating exponential change in daily life.
Other trends address issues such as the rise of what KPMG calls generation voice and the realisation that it's no longer possible to overlook inequality. This all adds up to a more complex world.
Transitioning to a low carbon future
There is increasing scientific consensus that human activity is contributing to the rise in temperatures. That rise has brought in its wake a number of extreme weather events. Governments, companies and civil society are all taking action to move to a lower carbon future.
KPMG points out the government plan for climate change action has broad support from the agribusiness section, but notes the proposal to reduce biological methane by between 24 and 27 per cent by 2050 has been negatively received. There are concerns about the cost of transitioning to a carbon reduction strategy, but KPMG points out there has been little consideration of the opportunities the move could unlock.
Fusion technologies and exponential change
KPMG says the ability to fuse biological, digital and physical technologies reshapes all aspects of day to day life. This change also creates opportunities for new business models and has the ability to transform agriculture. The agri-business sector has been slow to embrace digital disruption but it now has no choice but to accept it and work out how this can help in the long-term.
"We see the agri-food sector as being at the centre of the fourth industrial revolution combining the biological (plant or animal), with the physical (tractor or a hoe) and the digital (knowledge and insight) has been what the industry has always done to grow food and fibre products," the report says.
"We do, however, distinguish the revolution in the agri-food sector from the wider revolution because the sector effectively missed the first three industrial revolutions and is consequently facing more disruption over the next decade or so than any other sector of the global economy".
We must be able to do that with plants
KPMG notes the importance of making more and more consumer products from renewable resources. In most cases that means plant-based materials in place of plastic, metal or other non-renewables. It says modern bio-technologies have the capacity to unlock sustainable solutions to these problems.
Economic influence will continue to shift as wealth grows in emerging economies
The world's economic centre of gravity is shifting away from Europe and North America and returning to Asia. This changes our long-held perspective on economic influence and our trade partners.
Millennials facilitate the connected, instant access economy
Consumers are digitally connected. They have immediate access to products and services anywhere in the world and no longer need to worry about long term asset ownership, nor are they restricted to buying what is available in their locality.
Infinite search for ways to do substantially more with a declining resource base
The world's population is growing, affluence is more widely spread than in the past. This means there's a growing demand for consumer products. However, producing these products puts more pressure on natural resources.
Some limited resources are already stressed. Governments and societies are looking for sustainable resource management.
The goal now is to generate more output from less input.