Proudfoot says we need to accelerate ocean "forestry" (the growing of seaweed and other plants) for food and carbon sequestration.
COMMENT:
There has never been a better time to be part of the global food system.
US$65.4 billion of venture investment into disruptive innovation in the last decade has set the platform for the most fundamental changes in food and fibre in over 10,000 years. A food renaissance is under
way, accelerated by the reconnection of people to the food they eat during a pandemic. Opportunity exists everywhere in the food system's Great Big, Beautiful Tomorrow.
Add to this high dairy prices, strong demand for red meat, record kiwifruit returns and good timber prices; the outlook for New Zealand's food and fibre producers, processors and exporters has, on the face of it, never been better.
However, this year's KPMG Agribusiness Agenda (Agenda) found fatigued leaders dealing with the practical challenges of the pandemic — labour shortages, broken supply chains — as well as having to find the time to understand, engage and respond to the Government's change agenda. This is leaving limited leadership capacity to think about the extensive opportunities available in the future food system.
For the first time, in the 12 years of writing the Agenda, we concluded there is a risk that our food and fibre organisations might miss opportunities available to participate in the food renaissance. This could cost us the ability to generate product premiums in global markets, slow our ability to transition to a lower-carbon, more sustainable country, that ensures every Kiwi has access to nutritious, affordable food and at the same time, address some of the fundamental health challenges we face as a country.
The future will be created by those that lead this global shift. Taking an active role in leading change across the food system, as New Zealand producers have done over the last 40 years in bringing innovation to pastoral farming, forestry, horticulture and wine, will provide opportunities for us to unlock new value — environmental, social and economic — across all our food and fibre activities.
An area of interest is the opportunity to maximise the potential inherent in our oceans. New Zealand's exclusive economic area is 93 per cent ocean, meaning we have significant scope to unlock new aquaculture capacity, including automated deep-water farming systems, to produce food and nutritional co-products. We also need to accelerate ocean "forestry" (the growing of seaweed and other plants) for food and carbon sequestration. The ability to sequester carbon into plants in the ocean, underemphasised by the Climate Commission, should be central to our decarbonisation discussions.
It offers a higher quality, more ethical carbon offset to some of the plans to plant trees on every hectare of land that can be acquired, regardless of its productive potential.
Another massive opportunity for New Zealand exists in bioproducts. Contributors to the Agenda suggested that if we maximise this opportunity, it could add $30 billion a year to the economy. This is about creating commercial alternatives to raise the value of the wood we grow providing viable economic alternatives to exporting logs (structural timber products, bioplastics and polymers or biofuels).
But this is only part of the bioproducts opportunity. Everything we grow comes with additional biomass (orchard prunings, grape marc, fish bones, animal effluent). Our goal should be maximising the value created (or costs saved) from utilising 100 per cent of what we grow. This could be new products, new ways of substituting fossil fuels out of existing products, but it could be using off the grid effluent to replace existing energy to generate process heat.
While political will is low, a mature conversation around the utilisation of biotechnologies can no longer be deferred. New tools since the last comprehensive discussion on genetic technologies (including gene editing) raise very different questions to those debated previously. They are being used extensively around the world to develop food with higher nutritional density, plants better able to withstand weather extremes and cultivars that can assist in managing greenhouse gas emissions.
A considered approach to these technologies would ensure we can retain the world's best biological scientists. It could also be critical to protecting our markets, where risks are increasing that if we don't use certain technologies our products could be ignored by premium consumers and become subject to market access restrictions.
The constantly growing population of sophisticated and informed customers around the world presents us with a significant opportunity to capture more of the value in the products that we grow.
However, it also increases our risk of losing custom if the story we tell the world does not align with our reality. While there is more competition for the premium consumer's dollar, we are recognised as a producer of safe, free-range, high-quality products but we need to lift our storytelling to move from sustainable to evidence-based products. Evidence-based products have all aspects of the experience informed by science, are backed by data and enhanced through authentic provenance.
There is no doubt that global interest is growing in regenerative farming. There is no consensus over what constitutes a regenerative system, presenting a unique window to take a lead in defining what we consider to be the essential elements of such a system.
The work currently underway as part of the Ministry of Primary Industries' "Fit for a Better World" programme to define the essential elements of Te Taiao, production systems that balance the health of land, water, soils and other living things, presents an opportunity to create a real point of difference for our food and fibre products.
Completing this work quickly and providing producers with the pathway and tools they need to evolve their production systems offers the opportunity to increase the value of exports while improving environmental and health outcomes.
It is also critical that we approach emerging modern food opportunities with an open mind. The future of our food system is not either traditionally farmed or modern foods (synthetics, plant-based, cultured foods, etc.) but is very likely to be a mix of both to deliver the necessary nutrition to global consumers.
If we understand the expectations of our community and consumers and do the work necessary to exceed these then we should be able to continue to sell our naturally produced food for a premium. We should be exploring the opportunities inherent in modern food; there will be premium niches that emerge that offer the potential for us to grow the nutrition we provide to the world and the value that this delivers to the NZ economy.
The opportunities available are significant but much needs to be done. We need recognition that an individual's time is finite; organisations must invest in greater leadership capability to respond to the structural fatigue that is currently being experienced and provide the time to think about the future. Our leaders need to ensure that they have the time to seek diverse opinions and reinvest in their networks and relationships as borders reopen.
Collaboratively, we should explore corporate venturing to provide access to the most relevant global innovation shaping the farming systems and products of the future. The government needs to ensure that the regulatory programme is joined up across agencies, consultation is targeted, and changes are made with enough runway to allow realistic time for change.
Finally, directors and governors need to govern for growth, supporting their executive teams to focus on opportunities that will create long term benefits for the organisation, for communities, and for the environment.
- Ian Proudfoot is Global Head of Agribusiness at KPMG.
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