Farmers and growers across New Zealand certainly have valid reasons to feel gloomy about the sector’s prospects. Cyclone Gabrielle and other weather events have taken their toll.
Policy change and regulatory reform in the areas of freshwater and climate change have been poorly implemented and communicated. Inflationary pressures have taken the gloss off what has been an extended period of healthy farmgate returns.
With on-farm inflation running about twice the rate of New Zealand’s average 6.7 per cent, this will hurt farmers in the coming year.
The good news is that while inflation is persistent and at elevated levels, it appears the peak is over, and interest rates will also trend down in the year ahead.
The interesting part of today’s situation is that this sector has faced many similar challenges before and worked through these to thrive. I have no doubt we will do this again, and the future remains bright for those prepared to lift their heads and realise the opportunity.
Farmers and growers have missed the message they continue to be world-leading in nearly every area of their business, but we need to keep moving to stay there.
Others are catching up, and as an exporting country, we need to ensure we stay at the head of the pack.
It is time to be forward-thinking, accept change is coming, and adapt to ensure we remain global leaders in the area of food and fibre production.
Governments are not driving this agenda. This is a consumer and customer-driven change, and while some aspects may not seem rational to Kiwi farmers, they will be requirements imposed by retail chain partners in order to retain the ability to access their customers.
There will be limited premiums for these individual requirements unless we stack up a compelling range of attributes that together provide a compelling story alongside premium and differentiated food and fibre products.
Some realities are clear.
The world is increasingly focused on climate change, and the food and fibre sector will need to reduce emissions and drive towards net zero targets with urgency.
Arguments here about whether emissions are warming or not are irrelevant. Our competitors offshore are all adopting net zero targets by 2040 or 2050, and if we ignore this reality we will lose our seat at the table.
We will also need to ensure our animal welfare standards are fit for the modern consumer’s view of animals living well. This will require clear interpretation to ensure our standards are put in the context of our farming systems which differ from many others in the world.
Our environmental and sustainability credentials will need to meet customer expectations and provide us with the opportunity to operate at home.
Banks and insurance companies will have similar requirements for farmers and growers in order to access funding for our businesses.
All of this will need credible and trusted verification to ensure the attributes being claimed are real and able to be translated internationally with ease.
I have no doubt that the food and fibre ecosystem is up for this challenge, and farmers should not feel alone in adapting and adopting the changes required.
This ecosystem of professional, service and support companies is stepping up to the plate to invest directly in helping farmers and growers with the changes required.
We will all need to do more but, then again, that is what we have always done, and we will do it again.
The future for premium, attribute-rich New Zealand food and fibre production, backed with credible and trusted verification, is real and can be assured.
We now need a mindset change to help us get there.
- Mike Petersen is a former Special Agricultural Trade Envoy and chair of Beef + Lamb New Zealand. As well as being a sheep and beef farmer, he is also a director of an agribusiness company.
