COMMENT:

There are myriad lessons New Zealand as a whole and the agriculture sector can take from the Covid crisis, through its own experiences and by taking heed of what has happened in other countries.

Health is a selling point, being fleet of foot is valuable, and food is still something that people want to consume.

We, and many other countries, have had some very strong reminders this year of health, hygiene and food safety — "wash your hands for 20 seconds".

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The result is a greater focus on being healthy. There are several potential ways New Zealand can benefit from this heightened focus.

One, quite literally, is the adage "an apple a day keeps the doctor away". Fruit is NZ's fifth largest export, worth $3.5 billion in the year to March, with kiwifruit and apples the mainstays.

Fruit prices have been very resilient this year. Kiwifruit is doing well coming out the other side of global lockdowns, with Zespri leveraging the fruit's Vitamin C content and using savvy marketing techniques in key markets.

New Zealand already has a good reputation for food safety, which is another angle to continue pushing as a selling point. That reputation could be burnished if New Zealand can ensure that it remains Covid-free.

Another lesson has been the value of flexibility in export markets.

A key market like China, which was disrupted earliest, is one that is always going to be hard to wean off. And if it is delivering the highest prices, then there is a genuine foregone opportunity from diversifying. But maintaining contacts or some market presence in other countries can help in times of crisis when key markets get impacted. Our exports have held up well this year, in part because of agility to switch markets.

That ability to pivot when needed has value. New Zealand contrasts well with some examples in the US for diversification and the ability to flex. During the Covid crisis the US managed to have both a surplus of potatoes and a shortage of frozen French fries.

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There was a spike in demand for frozen fries for home consumption. Yet producers of bulk pack fries for fast-food operators had little need to purchase potatoes to process when many fast-food chains and commercial kitchens were closed and did not have the equipment or packaging to supply the home market. Overspecialisation has its disadvantages.

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The importance of resilience has been strongly brought to the fore. Financial resilience is the make or break of many businesses in New Zealand at present. It is no less important in the agriculture sector.

Agriculture needs to deal with weather impacts, climate change, swings in commodity prices, and over time a transition to a more environmentally sustainable industry. This is a time to look really hard at business models and financial positions and work on making them better able to weather shocks.

The Covid crisis is not yet over, and we don't know if there is more pain to come in our key export markets. Even simple things like packaging sources can throw the spanner in the works, so the supply chain for our exports needs to be reviewed for its resilience.

The final thing New Zealand should not lose sight of is that food exports still have a good long-term future.

World population growth means many more mouths to feed.

New Zealand's challenge is to strive to maximise the value of what it can create from its land while increasingly rebalancing to produce in a more environmentally sustainable way — and do it in a world which risks being more inward-looking.

- Nick Tuffley is chief economist at ASB.