The need for substantial investment in the agribusiness sector to ensure its continued success was the overarching sentiment at the inaugural New Zealand Agri Investment (NZAI) Week which took place earlier this month.
ASB Bank were proud to be the naming rights sponsor of the week and were lucky to have some of our experts speak at events and attend others. This gave us great opportunities to interact with our customers and other people in the agribusiness sector.
The growing need for more investment was a common topic, both at the formal events and in the discussions held amongst delegates.
The Government has a goal of doubling primary industry exports to $64b by 2025 and in order for this to happen, New Zealand's agricultural industry needs substantial investment in three key areas; capital, innovation and people.
Capital is key to achieving the country's growth agenda, as well as for agribusinesses to achieve their individual ambitions. Funding will continue to come from existing investors but it's clear that new investors need to be attracted.
We've projected that there will be a capital shortfall if the agri sector is to achieve the Government's goal. "That capital shortfall needs to come from new participants in the agri sector from within New Zealand and globally," says Mark Heer, ASB General Manager Rural.
With a global challenge to increase food supply, attracting overseas investors to New Zealand is a realisable task but needs to become a strong focus for agribusinesses, and the agri sector as a whole.
During NZAI Week, a select number of agribusiness start-ups were given the opportunity to pitch to potential investors and partners at an Investor Showcase. Opportunities like this are a step in the right direction to encouraging more investment in New Zealand agribusinesses.
A point that was raised at the showcase is that businesses raising capital want more than just money from investors. They're looking for the right investor with skills, knowledge and experience that the business can utilise.
Furthermore, some companies aren't looking for money at all - they've already attracted capital but have a knowledge and experience gap when it comes to commercialising product and driving global growth.
This knowledge gap, and ultimately people shortage, is a crucial issue. Filling these spaces with the right people is fundamental to the success of New Zealand agribusinesses and to the achievement of the Government growth agenda.
It's estimated that there needs to be 50,000 more people in agribusiness jobs to achieve the government's growth agenda by 2025. To fill these gaps, there needs to be significant investment in education and workforce development.
Here at ASB we're committed to helping New Zealand achieve this goal and are working towards it through initiatives like our partnerships with Mount Albert Grammar School and Taratahi Agricultural Training Centre.
The agri sector is now offering career pathways that were previously unexplored - with the strong focus on technology, there are now professional and analytical roles that just weren't there before.
Three young people involved in agriculture spoke at the launch event of the week and gave their thoughts on the future of the sector in New Zealand and the role youth have to play. One of the speakers, Greer Baldwin (a student at St Paul's Collegiate School) mentioned that when you're at school there can be a stigma attached to agriculture. Often it's not seen as a worthwhile career and is something only kids who grew up on farms pursue.
The broadness of an agriculture career is often unknown, with people not being familiar with the roles in science, technology and banking that the industry has to offer. It's often presumed that studying agriculture is only about becoming a farmer.
It's important that young people are encouraged to enter the industry and see it as a viable career path with a huge variety of different roles.
One of our initiatives is our investment in Mount Albert Grammar School's agriculture course. We lease a farm to the school for a nominal annual rent of $1 and last year we renewed this for another 99 years. At the same time, we also announced our ambitions for the farm, partnering with KPMG and other organisations to upgrade it to a world-class teaching facility and experience centre.
Agri-tech has a huge role to play in the future success of the industry. It allows agribusinesses to achieve better results more efficiently with the same resources. It's also fundamental to creating a more sustainable industry - something that all agribusinesses should be focused on.
Technologies such as Xero and Figured not only make day-to-day accounting easier but they allow farmers to make more informed and more accurate decisions. This ultimately leads to greater profits and allows farmers to manage volatility more effectively.
As well as supporting agribusinesses with traditional banking needs like accounts, loans and insurance, we also offer specialist services through our Agri Capital and Rural Corporate teams. The teams can work with you to achieve your ambitions by sharing their knowledge and expertise. They're also invaluable to agribusinesses looking for funding; providing connections between agribusinesses, investors and industry partners.
Read more ASBfarmsmarts innovation content here.