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What is the most profitable way to harvest asparagus in New Zealand.

Executive summary

As a relatively new asparagus grower, in the Waikato region of New Zealand, I am interested in exploring opportunities within this industry. The harvesting costs in an asparagus business are a significant portion of the total expenditure, so any efficiency gains would provide a direct contribution to profitability. 

There are currently several different methods for harvesting asparagus, all of which involve manual picking of the spears. This project looked at which of the current methods was the most profitable for the New Zealand asparagus industry. Variations include paying staff a ‘per hour’ rate, a ‘per kg’ rate, or combinations of both. Picking methods vary from individuals walking along a row in their own time, harvesting into a bin or container carried on their person; to a team of pickers walking behind a tractor with a 20 metre boom, loaded with crates that they place the spears into as they pick.

The highly manual nature of the harvesting raised the question of what automation options have been considered or attempted in the past, as well as what the potential for this may be in the future.

The interviews held with existing asparagus growers provided a wealth of information regarding the picking process, as well as the potential for automation. The lowest cost system currently in use amongst the interviewees involves paying the pickers $0.87/kg through the entire season. The next lowest cost involved paying pickers a ‘per kg’ rate that varied from $0.85/kg at the start of the season, through to $1.20/kg at the end of the season when volumes were lower. The most costly system paid the pickers $18.00/hr, plus a $0.20/kg bonus for all ‘Class One’ graded asparagus. These costs were adjusted to reflect the wastage through the grading process, and therefore provide a more accurate actual cost per kilogram of saleable product. The results then saw the lowest net cost at $1.31/kg.

Although this assessment clearly showed the lowest cost, the determination of their relative profitability from a long term perspective was much more subjective. This was because each business had a number of unique considerations to incorporate into their decision making process around harvesting costs, for example the age and productivity of a block, access to labour and the typical profile of the labourers. The interviewee’s perspective on the potential for automation was explored and their opinions varied widely, from highly unlikely to occur, to highly likely to occur.

The potential for further study regarding innovative harvesting techniques, by incorporating automation, is significant. The challenge will be in balancing the needs of the growers for a cost effective and easy to use solution, with the research and development costs required to provide that as an appropriate solution.

Tim van de Molen

Starting the family succession conversations

Executive summary

Why is family succession planning an issue we should be concerned about? It comes back to the word family. Family succession planning within the agricultural landscape conquers within, an emotional connection to the land and a cultural identity within New Zealand. There have always been family businesses running farms and there appears to be a strong desire for this to continue long into the future within New Zealand Agriculture. Family succession also deals with the love and affection of those most dear to us and with significant wealth at stake it must be done well for family relationships to be enhanced through the process. 

However when it actually comes to family farm succession, no one size fits all and that is primarily why succession is still discussed, researched, and written about. It has never been an easy conversation to navigate through to the desired outcome with operating environments constantly changing and continuing to evolve. However there are processes that can enable the conversations to occur within the family business to focus them on a desired outcome they can achieve together.
In some cases the terminology of family farm succession is also beginning to change. Being referred to as an ‘intergenerational business model’ and ‘family business continuance’ where the sole concept of asset transfer has broadened to include the transfer of knowledge and experience between the generations (McLeod & Dooley, 2012). This in itself infers a shift in mind set to intergenerational or continuance indicating a natural progression through the generations as opposed to simply succeeding in the family business or a sale of an asset.

Those spoken with and throughout the literature identified numerous triggers for a family succession process to begin ranging from a death in the family, an accident or injury, marriage or divorce, son or daughter wanting to ‘come home’, age and stage, someone asking the family the question of succession, through to business opportunities being identified which require a succession conversation. The trigger point will vary depending on the family situation. Once identified by the family as a priority the process can begin and conversations initiated to determine the way forward. Key attributes contributing to the success or otherwise of the process is a commitment and good will to see an agreed outcome achieved. This will often require patience and perseverance along with mutual respect for all involved.

Communication was identified time and time again underpinning the succession conversations because this is where and how the process has to begin. Addressing the ‘icebergs’ within the family business is about clearly articulating a number of often unspoken expectations, aspirations, assumptions, concepts such as fairness and equality and ultimately what the vision of the family business actually is. The part of communication which is often forgotten is the ability to listen and respect each person’s contribution and opinion to the conversations as the process unfolds. As George Bernard Shaw stated “The single biggest problem with communication is the illusion that it has taken place”.

Starting early often yields the best outcome for the family as time allows identified issues or concerns to be raised and addressed before it is too late. Dr James Lockhart points to the Dutch as an example of how to begin the conversations around family business governance. He indicates this should start from an early age discussing family business matters around the kitchen table. As the family grows and develops keeping the family involved in planning meetings and discussing the future helps to shape business principles and future conversations about their place in the business or what the future may hold. The family is exposed to the process of sharing ideas, listening and discussing plans for the current business and its future. By discussing the family business from a young age, siblings are exposed to business processes and skills which are required when it comes to more formal discussions around family succession planning.

What became clear from interviews with professionals and farmers is that strategic business planning is an area of running a family business that is not given enough priority. Rather time is spent working in the business but not on the business. The planning process involves disciplined time set aside to think about and plan for the future needs of the current business. Thinking through where are we now and where do we want to be with a plan of how to achieve that. Prioritising business planning enables a step towards succession conversations as this should come up within these planning sessions as the future is discussed. Encouraging business planning and governance principles within a family business is an important enabler for a strong platform for succession conversations to begin from.

Ultimately the outcomes of a family succession conversation will be determined by the family, for the family, as success will look different to every business. Following a structured process to succession planning which is led by a strong chair or independent facilitator to navigate a series of conversations, interviews and family meetings can enable this to occur and an outcome achieved rather than being put off or put in the too hard basket.

It is for the family to decide together what they want to see happen in the next phase of the family business cycle, how they determine that to occur, when the transfer will take place and why they want that to be their future.

Nathan Nelson

Improving Maori capability to make decisions for the development of Maori land.

Natasha Clarke-Nathan Kellogg report image

Executive Summary

This report outlines research conducted to identify how Maori decision making capability can be improved to increase the development of Maori land and to recommend ways to support that capability.

The research identifies how historical Maori decision making frameworks enabled Maori to develop their land collectively as a tribal people. It describes the key differences of historical frameworks to the current legislative Maori Land Trust frameworks provided in the Te Ture Whenua Maori Land Act 1997 and the constraints to progressing Maori land development.

The research highlights that historically Maori worked collectively as inter-dependents and how legislative frameworks that today promote individualism, have disbanded this collective ability. Individualism is established with the appointment of trustees who to some degree act independently on behalf of their land owners. The research identifies this as a key deferent to the development of land. The handing over of authority and decision making from the owners to trustees presents a risk or threat to the owners. This has contributed in the loss of Maori land development.

The results of the data analysed and tests of additional processes and thinking techniques present opportunities to reinstate the collectivised approach to developing land as Maori practiced historically – pre European contact.

The report finds that the application of additional processes can improve land owner participation and the application of thinking techniques can mobilize the development of Maori land and encourage new styles of thinking for Maori.

The recommendations of the report are for further testing and refinement of the process and for the process to be tested in other sectors (outside Primary Industries).

The dream that made us.

Executive summary

When looking at people and culture, it is difficult to use traditional academic processes to understand how we see the world, and how we think and feel. This is because the influences on humans tend to be more around emotions, rather than logic. Traditional academic process has been around logic or critical thinking, and this has served us well but I have strayed away from this discipline to explain the emotion behind our culture. 

I have chosen to deliver this paper in way that can explain the perception or the emotion of our culture – The Culture of Dairy Farming. I have also written this paper so a dairy farmer that reads this paper can easily follow the information. I have used the story telling approach to allow the reader to relate to different perspectives. The hope is to allow for a solution to develop by having a better understanding of different people’s perspectives. 

I have relied on comments and perceptions from interviewees to explain an agricultural perspective. I have also conducted a survey of dairy farmers to understand how they see or think about their work and life.

Stuart Taylor

Organics: fat into the fire or get out of jail card.

Executive summary

Aoroa Farms Trust sees organics as a Get Out of Jail Card!

This report was written to enable two decisions to be made:

  1. Whether or not Aoroa Farms Trust remain a conventional dairy farm or convert
    to becoming an organic dairy farm.
  2. If the decision is to convert do they supply Fonterra Coop or Organic Dairy Ag
    Hub Coop

The people involved in this business plan and who are critical to its success are the directors of the Aoroa Farms Trust Hal Harding and Penny Smart. They fully realise that they will not fulfil their goals on their own however, they will need good advice and support. During their time farming and during their due diligence on the organic conversion they have surrounded themselves with people to fill the skills gaps that they lack. Their farm consultant Rodd Hodgson, accountant Charmaine O’Shea and bank manager Bryn Hughes have been integral in helping them with their decisions; there are no plans to change this combination. Aoroa Farms Trust also have a very skilled, steady and committed staff whom they have consulted with throughout the whole organic due diligence process and from whom they have full support. Hal and Penny along with Aoroa Farms have a strong vision, set of values and clear goals regarding the farm and how they want it to be now and in the future. Hal and Penny back themselves, work well as a team and are confident that they can make an organic system work well on their farm. 

The opportunity for organics domestically and more importantly through export is growing very quickly and it would appear set to grow exponentially in the short to medium term. (The Organic Aotearoa Report March 2016). There is currently an undersupply of organic dairy and as more and more consumers want to know that the food that they are consuming is good for them and just as importantly the planet, this is set to continue. There will need to be ongoing improvement in the integrity of organic products as well as less fragmentation in the organic market place amongst suppliers, for the full potential of organics to be met and continue to progress at the current rate. (https://www.marketresearchreports.com/technavio/global-organic- dairy-products-market-2015-2019).

Aoroa Farms Trust has a high debt and in order for organics to be financially sustainable on the farm, they need to have an average $8/kgMS farm-gate milk price once fully certified. Benchmarking production, costs per kgMS and farming systems with other Northland organic dairy farms (which included on farm visits), has guided the figures and predictions used in making the organic decision. Being a ‘value add’ product the organic milk price is de-linked from the conventional global commodity milk price and so more likely to be as volatile/affected by global events as conventional milk pricing. This is one of the main attractions for the conversion as well as the ongoing benefits to the environment that occur when farming organically.

Risks that are involved and are beyond the control of the Trust are the weather, as Northland is prone to drought (affecting levels of production); the stability of the global economy, geopolitical disruption and the demand and supply equation for organics, affecting price paid.

There are two options available to Aoroa Farms Trust as to a processor to supply; Fonterra Coop and the Organic Ag Hub Coop. Fonterra (whom the Farm currently supplies with conventional milk) has recently stepped up/come back into the organic milk market. Fonterra have historically been unreliable in regard to renewing contracts in Northland for organic milk. They currently offer a transition premium linked to the conventional milk price pre full certification of .45c/kgMS with the share ownership requirement the same as conventional i.e. fully shared up at the market value which is north of $5.50/kgMS currently (May 2016). The Organic Ag Hub is a new cooperative that has a business model of matching organic milk to processors only i.e. they don’t own any processing plants themselves, they are small and intimate but as yet unproven. Their transition pricing is currently higher than Fonterra’s and shares in the Ag Hub Co-op are valued at $1per kgMS with the requirement to be fully shared up if supplying transition or organic milk.

The Trust feel that the rewards are there for the conversion both financially and environmentally which fit with their values, vision and goals.

The backstop if organics do not work out would be reconvert to conventional supply.

The decision was made on the 18th May with the approval of the bank to start the conversion to Organics and supply the Organic Dairy Ag Hub from the 1/6/16.

Penny Smart

Blackroom: A concept incubator for the future of coarse wool.

Executive summary

The coarse wool industry has been described as being in a state of malaise by the existing literature and industry experts. Back in 1981 Prime Minister David Lange infamously boasted that agriculture was a sunset industry (Federated Farmers, 2014). At the time this was challenged by industry sector leaders as being false. However, whilst undertaking an analysis of the coarse wool, the research has indicated the industry has passed through the ‘sunset phase’ and now is in the ‘decline’ phase and may be irretrievable, unless major changes occur. 

The primary reason for this research is to investigate the future for coarse wool. Wool is a hugely under rated product that has so many positive, environmentally conscientious and natural benefits that are being over-looked in favour of synthetic alternatives.

The report continues on from the previously titled “The New Zealand Coarse Wool Industry – Does it have a Future?” (Oliver, 2015). As reiterated in the prior report, the only way forward now for the industry in the expert’s opinion, is for the industry to commit itself seriously to advanced research to take the coarse wool fibre into new uses. This report outlines the potential of using a foresighting, backcasting concept incubator, named ‘Blackroom’.

The key to the utilization of a Blackroom futures concept is to takes the researchers away from the present and places them in the distant future, envisaging the future system state and then bringing it all back in order to determine the pathway to the future product use. The resulting outcome of the Blackroom will be to develop new research pathways for the future of the wool fibre and industry.

Nicole Oliver

Bobby calves: The game changers within New Zealand’s supply chain.

Executive summary

There is significant potential for New Zealand to increase its ability to utilise more bobby calves therefore making them a more valued product. It is important that we have a sustainable, viable, ethical and PR friendly value chain. It is also important that NZ Inc. gets this right to maintain farmers/producers’ ‘social licence’ to farm and maintain our positive worldwide perception.
While difficult to calculate, it is estimated that more than $1 billion is on offer, if we can capture the full value of underutilised bobby calves.

It is acknowledged that famers all operate different policies with different values, so it is near impossible to make a recommendation that will suit all producers and fit with processors’ expectations and resources. There is a range of options which will lead to more prosperous returns for the farmers, processors and overall sector. However, more leadership is needed to make these changes at all points of the industry supply chain.
Key recommendations:

  • Increased use of beef genetics across dairy herds
  • Increased use of sexed semen across dairy herds
  • An integrated dairy beef “profit partnership” supply chain model, where everyonecaptures the value of the end product
  • Uptake of a tool which measures beef performance through the supply chain toallow a feedback loop
  • Increased farmer education on what options are available

Dairy farmers are at the start of the value chain, so it is critical that those options are easy for them and do not affect their primary objective, which is producing milk at the highest margin possible.
In implementing any of the above options, it is expected that sacrifices would have to be made and some options do not benefit everyone in the supply chain.

Andrew Jolly

Primary connections: Leadership pathways within rural organisations.

Executive summary

A Professionalism shortage in governance, more and more organisations are beginning to expect more professionalism, from potential candidates. Although this might be the case there may not have been enough done to clarify and support the transformation. Every year thousands of people volunteer their time in leadership roles throughout the primary industry, yet there is no cross industry information to provide a pathway for these individuals to allow them to take their next step in governance and leadership

This feasibility study and research asks the question:


“Where do you go find the relevant information to get involved in the various governance roles in the volunteer based rural organisations?”

My project looks at the feasibility of a website concept that rural industry good/Non-profit organisations can use as a platform to promote the leadership pathways available within the organisation that shows short job descriptions and information on how to get involved from an entry level to high level of governance.

A one stop shop website of information on what is available to the up & coming leaders of tomorrow wanting to make a difference in the rural communities of New Zealand.
The areas of research to complete this paper have used the following methods

  1. A Literature review, to gain understanding of current used of leadership pathways and opportunities
  2. An online survey promoted via Facebook and email targeting people involved in the primary industries tounderstand their method of finding information relevant to my question.
  3. Case Study interviews that were held face to face and via email and phone, to gain an understanding howthese particular organisations promote their leadership pathways currently.

A key finding through the process of the online survey and case study interviews, found that the primary industries in the Non-profit and Industry good sector, who may rely on governance structures and people coming through to fill these roles. Haven’t consider the role that the internet and Social media can play to advertise and show the leadership opportunities to the future leaders looking for their next step in the governance ladder. And so could be missing the opportunity to engage this particular generation which we call the “Millennials”.

By having clear and concise information in which the “Millennials” (Researchers Neil Howe and William Strauss defined as those born in 1982 and approximately the 20 years thereafter) crave, to collectively to tell these Future leaders the opportunities available. We can look to change the way we engage and fill these vitally important positions on the various rural governance groups in New Zealand.

Preparing for the changing tide.

Executive summary

The regional council of Southland (Environment Southland) is mid-way through its Water and Land 2020 and Beyond (WL2020) Project. This project consists of three stages, and is the council’s response to the government’s National Policy Statement for Freshwater Management. It aims to prevent any further decline in water quality, and to help the Southland community achieve its goals for water.
Dairy farming has increased significantly in Southland over the previous 20 years, and is now a substantial contributor to the Southland economy. With this intensification, has come water quality pressures. The changing environmental regulations of the WL2020 project will impact Southland dairy farmers, as well as the Southland community.

The aim of this project was to investigate how Southland dairy farmers had been involved in the WL2020 process so far, and how to increase this involvement. From this, the aim was to find ways in which DairyNZ, the industry levy body, can support Southland dairy farmers to adapt to changing environmental regulations. Thirteen people, a mixture of industry members and Southland dairy farmers, who have been very involved with the WL2020 process so far, were interviewed.
It was found that engagement by dairy farmers in the WL2020 project was between 10 and 20%. This low engagement restricted the majority of dairy farmers from being able to have knowledge of the proposed rules and changes of the WL2020 project, the impacts of these and from being prepared for these impacts.

Five broad recommendations were made that would contribute to Southland dairy farmers and their communities adapting to the changing environmental regulations:

  1. Water quality is a social science issue as well as a science issue – dairy farmers must understand the water quality issue, accept that there is an issue and understand the effect of their actions on it.
  2. DairyNZ should continue what it is doing in Southland but build on this – the work of DairyNZ in Southland is effective and appreciated. There were some recommendations for building on this, but overall DairyNZ is on the right track.
  3. Engagement is the first step – dairy farmers needed to be engaged before they could have knowledge of the proposed changes, their impacts and adapt to these. Personalising the issues and one-on-one meetings were important in this step.
  4. Sustainable Milk Plans (SMPs) are an effective tool but need a follow up visit – SMPs helped increase the knowledge and preparedness for the proposed rules and changes, but a follow up visit and auditing system would increase their effectiveness.
  5. Relationships and leadership are key – relationships within the community and with ES are important. Dairy farmers must be prepared to show leadership.

It was found that Southland dairy farmers themselves have a responsibility to build relationships in their own community. Although DairyNZ has an important supporting role to play, dairy farmers must be prepared to show leadership. If this occurs, not only will Southland dairy farmers and their communities adapt to the changing environmental regulations, they with thrive within them.

Jolene Germann

Avoiding complacency in kiwifruit biosecurity.

Executive summary

Psa has increased biosecurity awareness in the kiwifruit industry, and is reinforced by recent fruit fly incursions and biosecurity communications by industry bodies. Kiwifruit growers believe that a future biosecurity incursion is a significant risk to their investment in kiwifruit, if not the greatest risk. Yet on most orchards, biosecurity practices have slipped from where they were several years ago.
The aim of this study is to determine if growers are becoming complacent in biosecurity practice over time. If so, how do we overcome this to ensure that the kiwifruit industry is prepared for a future biosecurity incursion?

Interviews were held with kiwifruit growers, post-harvest grower services representatives and biosecurity subject experts to understand grower attitudes to biosecurity practices and why certain practices were no longer being implemented, especially in “Recovery Regions” where Psa had been present the longest. A subject expert from Civil Defence was also interviewed to learn how they overcome complacency when preparing the public for emergencies.

The results of the study indicate that growers in Recovery Regions are retaining those practices seen to make a difference in mitigating the impacts of Psa. Some growers believe the initial protocols implemented for Psa are excessive for the current environment and the decline in practice is not a result of “complacency” but rather a “new norm” appropriate for the current level of risk.
However, this reflects the Psa-centric paradigm of the industry. For most growers thinking about “risk” does not extend beyond Psa at least not in terms of their own on-orchard practices. The role growers can play in mitigating the impact of future biosecurity incursions does not seem to be well understood and is considered the responsibility of organisations such as KVH and MPI.

Most growers believe they are doing what is necessary to manage “risk” (of Psa). However, this falls below what most subject experts would recommend as a minimum standard to reduce the impacts of a future biosecurity incursion. If every grower maintained a baseline of minimum on-orchard practice even in the absence of an imminent threat, the industry would be more likely to limit the spread of a pest or pathogen before it is detected, and for many organisms that could determine whether eradication is a possibility or not. For growers the financial implications of this can be extremely significant. A biosecurity threat that is not eradicated, creates a challenge that needs to be managed year after year. Impacts to the grower may include loss of orchard productivity and land value, increase in operating costs, market access implications and in some cases, all of the above. Biosecurity practices provide the industry with a form of insurance against a significant business risk.

Numerous barriers to implementing best practice are identified in the study including information overload, the cost of implementing practices and commercial disincentives associated with some practices. However, subject experts, from biosecurity or Civil Defence, were unanimous in stating that the single greatest barrier to uptake of recommended practice is a lack of understanding of risk, and how specific measures mitigate this risk. Creating this understanding is a fundamental step in the implementation process, but it is only the first step. Different segments of the industry respond to different cues and require different support through the implementation process which may include; guidance on how to implement the practice, testimony from trusted sources such as their peers or opinion leaders, observation that the practices are effective and feedback to reinforce their decision to implement once they have done so.

Literature and subject experts suggest that to facilitate the necessary behavioural change, the industry should establish a working group of biosecurity champions and opinion leaders. Involvement of this group in the development of biosecurity guidelines will ensure they are practical, fit for purpose and have the support and ownership of the industry from an early stage. Industry champions also provide a respected resource to communicate key messages and provide on-going support to growers. When programme champions play an active role in the development of an innovation, spread and implementation is likely to be more effective.

The study makes the following recommendations for the kiwifruit industry:

  1. Biosecurity awareness material needs to be made “real” for growers, in terms they relate to such as potential impact to orchard productivity, trade, and orchard value.
  2. Industry biosecurity guidelines are required, to indicate the level of practice required for business-as-usual operation in absence of an imminent biosecurity threat or response. These guidelines would provide consistency across the industry, remove commercial disincentives that currently exist, and thereby improve the industry’s ability to withstand a future biosecurity incursion.
  3. Guidelines should clearly explain the purpose of a recommended practice and how this mitigates risk.
  4. Recommended practices should be practical and easy to implement. Industry bodies should facilitate this process.
  5. A network of industry champions and opinion leaders should be created to assist in the development, communication, implementation and on-going support of the biosecurity practices.
  6. Care must be taken when selecting industry champions and opinion leaders to ensure selection of individuals with appropriate influence into a diverse range of industry networks.
  7. There is value in a coordinated approach with other industries and they should be involved in the development of biosecurity guidelines to provide consistent messages across the horticultural sector.

Matt Dyck