The Big Issues: Election poses rural dilemma

Farmers are worried that any change in government will unsettle progress made towards sustainability. Photo/Sarah Ivey

In this first of a six-part series, Paul Dykes looks at the major challenges and questions
facing the primary sector, as identified in KPMG's Agribusiness Agenda. First up - politics.

Agriculture sector leaders are keeping a weather eye on the fortunes of the various political parties as the September General Election nears. Many are concerned a change of government could introduce uncertainties, such as ushering in tougher legislation.

Professional services firm KPMG discovered this concern when it conducted 13 roundtable discussion sessions with business leaders across the country in March and April while researching its two-part "2014 KPMG Agribusiness Agenda" report.

Part one, "Facilitating Growth in an Uncertain World", says it was soon apparent that many leaders were approaching the forthcoming election with some degree of trepidation.

It says farming groups feared their "lack of runs on the board" in relation to core sustainability issues, such as water quality and nutrient management, could encourage a new government to legislate, perhaps imposing charges for the use of natural resources and/or shortening the time-frames for compliance.

Change could also spill over into the official stance on free trade agreements, such as the Trans-Pacific Partnership, which has been criticised widely for a perceived threat to national sovereignty. The farming sector knows it must enter free-trade agreements, particularly in Asia, to overcome the significant restraints against trade at present.

Another touch point was foreign investment in New Zealand-based assets; deemed vital by many in the rural sector to fuel growth in the economy.

Although it was recognised in the roundtable discussions that not all foreign investment was good for the economy, a more-rounded policy was preferred than those being suggested.

The research base was not opposed to a change of government -- just the uncertainty. The report author, Ian Proudfoot, KPMG's global head of agribusiness, says there is an expectation that a new coalition government would take a much more active stance in promoting sustainable business, with a particular focus on increasing the investment in research and development activities.

It was also felt that a new coalition government might be prepared to take a more active role in regards to the creation of a pan-industry vision and strategy to develop a roadmap for growth.

The participants felt that, in some cases, such as engineered timber, a step change in the performance of a sector might not be possible without government action.

They acknowledged that the primary sector must work hard to inform and engage with urban New Zealand.