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Kellogg Scholar Reports

Implementation of the fonterra palm kernel guideline.

Executive summary

The use of Palm Kernel (PK) as a supplementary feed for NZ dairy cows has seen unprecedented growth over the past decade, despite volatile milk prices. Demand has been driven by system intensification, a production focus and climatic challenge. The availability, flexibility and cost- competitiveness of PK make it a popular choice with dairy farmers. 

New Zealand imports around a third of total palm kernel produced and is the largest sole importer. Palm kernel is a by-product of the palm oil industry, which is considered to have an adverse global environmental footprint associated with deforestation, biodiversity loss and greenhouse gas emissions, particularly in Indonesia and Malaysia.

In response to an increasing amount of PK fed to dairy cows by its suppliers, Fonterra Co-operative Group (Fonterra) announced the introduction of a PK guideline in September 2015, recommending a maximum feeding level of 3 kg/cow/day to future-proof the co-operative as a supplier of pasture- based milk. Further communication indicated a milk test was being developed to assess PK feeding levels. There was a likelihood that high PK feeding levels were causing milk composition changes that could cause issues with manufacturing and/or customer specification requirements.

The aim of this project was to understand individual farmer use of PK, their understanding of the Fonterra PK Guideline, the changes and time-frame required for implementation and the perceived impact. Their views on the likelihood of a future nil PK directive and an associated transition time were also explored.

Ten Fonterra farmers were interviewed who were feeding above the PK guideline level for all, or a part of, the season. In addition, industry professionals (industry body and farm consultants) were also interviewed to give a broader perspective to how implementation could be achieved and what the impact would be.

All farmers rated PK as important or very important to their farming business, despite using it in different ways and for different reasons. Findings indicate farmers use PK as a base feed to underpin stocking rate or predictable climatic challenge, a buffer for vagaries of pasture growth or as an emergency response to an adverse climatic event, or a combination of these uses.
Interviews found implementation of the guideline is achievable. For most farmers it is anticipated change will be incremental rather than transformational. Options to reduce the level of PK fed to guideline levels included:

  • Reducing feed demand through stocking rate, culling and drying off decisions,
  • Reducing feed supply by non-replacement of PK above guideline levels
  • Increasing feed supply from home-grown feeds or alternative imported feedsThe impact of the guideline on farmers will depend on the degree of change required to adhere to the guideline and the climatic challenges they face. The impact could be minimal or even negated if other aspects of the farm feed system are optimised.There is a need for farming systems to increase their resilience to climatic challenge and adverse events. Although System 4 & 5 farmers (high input) would be most immediately affected by the guideline, it was anticipated System 1 to 4 farmers (nil, low and medium input) would be made most

vulnerable, particularly in challenging or adverse climatic events. It is recommended Fonterra communicate a PK policy for adverse climatic events as this was considered to be the most likely challenge to compliant feeding thresholds.

Farmers indicated a twelve month period would be required for transition. It is recommended Fonterra adopt this time-frame for compliance and provide milk test results during this period. It is anticipated there will be variation in feeding levels for compliance both between farms and within individual farms, due to seasonality and management differences. Farmers should be encouraged to challenge the milk test during transition to find their individual farm feeding thresholds.

A consistent message from interviews was the need for Fonterra to provide more clarity and proof around what they were asking farmers to do. Farmers were unclear whether the motivation for the guideline was milk composition creating processing issues or customer expectations around sustainability or product specification, or a combination of both. It is recommended that Fonterra provides relevant research around the key drivers of the guideline and clarity around factors that will influence farmer management.

Seven out of ten farmers and four out of six industry professionals felt Fonterra was unlikely or highly unlikely to introduce a nil PK directive in future. Reasons given were that adherence to the guideline would overcome milk processing issues, a perceived lack of consumer willingness or ability to pay a premium for a PK-free product and the risk of supply loss to competitors for Fonterra. Those that believed a future nil PK directive was likely, thought so because of issues with customer perception and sustainability. Farmers felt that if a nil PK directive was made, they would require 2-3 seasons to transition.

Although beyond the scope of this project, interview findings have also led to broader recommendations for Fonterra to develop a “Know Your Customer” programme, develop a NZ grass- fed certification standard and investigate a ‘grass-only, home-grown’ specialty milk pool.

Rachel Baker

Supporting our rural women.

Executive summary

Rural women are moving their social space and networks online and increasingly seeking to work longer hours off farm, while the communities they live in continue to operate in the historical colonial space of a ‘man’s world’. 

Survey results for this report portray farming Mums in particular, as largely feeling lonely and isolated and without support.

Social media has become their crutch – their shoulder to cry on and for some, their exclusive social forum with the outside world.

With 88 percent of the rural mothers in this report’s survey working 21 hours or more and 26 percent working for over 40 hours a week, their usual social space within the rural community and, in particular, the school community had been vacated.

Traditional volunteering roles of these women within communities that are heavily reliant on the exploitation of that time, were not able to be met, leading to exclusion from important social peer groups.

Coupled with that was the immense exhaustion, stress, anxiety and pressure these women reported as suffering due to hectic timetables and pressure to take children to a large number of extracurricular activities.

The rural school’s role in escalating that pressure was evident, with many demanding volunteering from parents as Government funding has tightened. However, if that role was not fulfilled by a rural mother, she was in danger of being completely isolated from the community.

The majority of rural schools offer little to nothing in the way of after-school childcare despite evidence that many rural women were now earning off farm with many working Mums reporting feeling ‘excluded’ and ‘ostracised’ because many school events were held during working hours which they could not attend.

Many rural women have come from urban environments and may not have any experience of agricultural life. It is clear that educated career women outside of agriculture have limited options in using their skills in a farming context and risk limiting their personal growth.

Women spoken to for this report that categorized themselves as being ‘happy’ were utilising skills they had in a former career and were being paid for them. General farm manager from OB Group, Stu Taylor deliberately looks to use male employee’s partner’s skills in a way that benefits both parties. Recently this saw a female partner of a member of staff create a health and safety app for his farm that is now about to be rolled out nation-wide.

From this it is clear that farm owners and managers have a role to play in supporting rural women whether they be employees, partners of employees or partners and wives.

With the Government wanting to double primary industry export targets and wanting to encourage educated students into agriculture it is clear that the current ‘wasteland’ of knowledge among rural women who have had to stop their careers to live on farm has not been tapped into or acknowledged.

Finally, there has been very little research undertaken of today’s rural women or the wider social environment she endeavours to live within. Without urgent research, and targeted initiatives rural women and their families are at risk of severe harm that could be felt for generations to come with a vast cost to society.

To that end the following recommendations are made:

  1. Urgent in-depth research of rural women in New Zealand is needed.
  2. Current rural women’s groups need to engage empathetically across social media and educate themselves on the modern social space of rural women if they are to survive. To do that there needs to be better internet access across rural New Zealand as this is also the main way in which the modern rural woman socially engages with her peers. Without that connectivity she is at risk of further isolating and excluding herself from the wider rural community and that in turn could lead to deteriorating mental health.
  3. While the social space of rural women has changed, the environmental space has not. Rural schools are at the forefront of communities and should reflect that modern social space, and seek to support it. Board of Trustees within these schools need to consider if they are currently supporting the changing environment of today’s rural families or if they are condemning them.
  4. Working women need more support in after school childcare. Until that is enacted it will be hard for rural women to continue careers and personal growth. It’s a practical way of enabling social change, particularly as this report’s survey shows many women are working substantial hours often to the point of exclusion in their community.
  5. Transformative learning across rural New Zealand, for all rural women, not just those who have been marked out as leaders or professionals, would benefit the community and rural women’s health. While there are many professional courses available to rural women in agri-careers there is no support available to the rural woman who does not have an agri-career and is not interested in attending agri-professional women’s groups such as Dairy Women’s Network, Women in Arable or Rural Women NZ.
  6. Farm employers need to embrace the skillsets offered by females who may live on the farm because of their partner’s career. They should seek to find ways to incorporate those skill-sets in a way that showcases the female’s worth and remunerate financially.
  7. Volunteer work is often considered mandatory in rural communities where volunteer workloads are high. However, it should not be considered a viable alternative to a women’s previous career as that can prove exploitative and ultimately unfulfilling.
  8. There is no data available to analyse mental health in our rural women. There needs to be an annual survey similar to ‘rural business confidence’ conducted by one over-arching organisation so that when a crisis like the dairy downturn occurs, there is data available to lobby groups to ensure Government does not leave our rural women behind. We have no gauge as to how our rural women are coping in the current downturn and no knowledge of the crutches some of them may be turning too to cope i.e. alcohol and/or drugs.
  9. Who is the voice for rural women? There seems to be confusion among women as to who is representing them. Rural women groups urgently need to co-ordinate and develop a collective strategy in today’s environment.

Nadine Porter

How can we create value from compliance in the dairy industry.

Executive summary

Investment in time and capital to satisfy compliance requirements in the dairy industry is increasing year by year. While this is a necessary requirement to operate a business in our modern environment there is potential to create value out of this at the same time. Often when we look at disruptions we look for solutions as to how to get around them or avoid them rather than embracing the change and making the most of the opportunity. 

The aim of this project was to investigate an opportunity to develop an audited farm assurance scheme in New Zealand. The process included looking at the existing programmes which have recently come to the market as well comparing the opportunity in New Zealand with what is in place in Ireland with Origin Green Ireland. DairyNZ’s Sustainable Milk Plans which have been used in different catchments across the country could also offer a template to be built on to develop an assurance programme.

While Synlait and Miraka have recently launched their assurance programmes in anticipation of demand from consumers as well as showcasing an opportunity to create extra value. This could be expanded and rolled out across all primary industries and also the tourism sector. There is a large amount of commonality in what the primary industries and tourism are focussed on and that is selling New Zealand products and experiences.

Based on findings from this study and looking at similar assurance schemes, the following recommendations could take the opportunity to the next level and should be investigated further.

  • An assurance scheme committee should be started with representatives from supply companies, DairyNZ, Beef and Lamb, MPI, and other interested parties
  • It will be wise to canvas farmers early and ensure that a majority of suppliers are in support of such a scheme to give it the required critical mass to get moving
  • Marketers within supply companies should investigate the value of this increased brand value to determine a return for the scheme
  • Logistical aspects of an assurance scheme would need to be sorted at the start of the project to ensure that the workload requirements are able to be met (data collection and auditing)
  • It is important that the industry support (rural professionals) have the capability and capacity to handle the likely increased demand from farmers also

The next steps following this report in my view are –

  • A meeting of interested parties should be gathered to further work through details of how such a farm assurance scheme could be implemented and funded (look to the case studies as examples of a template)
  • There may be an opportunity to incorporate the Synlait and Miraka programmes under a New Zealand umbrella programme that satisfies the other requirements of a cross sector assurance scheme
  • Once a clear and defined strategy has been established it will be important to get a group of influential and innovative farmers on board to ensure that a critical mass of product supply backs the initial proposal to ensure that a large majority (ideally all) of farmers are on board before any programme is launched
  • Marketing will be important so any initial committee should consider getting suitably qualified marketing personnel on board to establish an easily recognisable brand to go along with the launch

While there would undoubtedly be some resistance to this opportunity by farmers seeing more compliance as a hassle, the reality is that most of what is being reported and audited is legally required to operate a business in New Zealand anyway. We need to stand back, have a critical look and identify the opportunity from challenges which are placed in front of us. All New Zealanders should strive to improve our environment and be excited about an opportunity to increase the value of our products by meeting an auditable standard.

Sam Williams

Exploring stock access: Perspectives on framing the problem and solutions.

Executive summary

New Zealand’s pastoral industry was founded on the breaking in of the land, and the romanticised image of cattlemen droving stock across rugged countryside remains a powerful image, even today. In abrupt contrast, however, is the more recent focus on stock access to waterways and its power as a catalyst for intense debate about water quality.

The aim of this report is to better understand the manner in which the problem of stock access and proposed solutions have been constructed. The approach used involves a case study of the Marlborough region. Ten individuals from a cross section of the community were interviewed in depth to gain insight into the values, experiences and understandings they had of the issues in question. Essentially a piece of qualitative research, the interview data was extended through an analysis of both the published and grey literature, including policy documents, discussion papers and media reports. Participant observation, was an additional component.

Participants framed the water quality problem in different ways. There was no consensus either on the scope or nature of the problem. There was some general acceptance that stock access as a component in hill and country farming was different from stock access in the lowlands, due to relative density of stock numbers in both areas. Almost all interviewees believed there was little difference between dairy and beef cattle in terms of their impact on water quality.
What were presented as issues of stock access on further examination were viewed as symptomatic of broader environmental concerns, including the intensification of agriculture over the past two decades, habitat destruction, and lack of pest management.

Perception was identified by interviewees as shaping the views of of the general public. The “community” was referred to as demanding of change, yet it was difficult to get an understanding of who makes-up that community. Most interviewees had some connection to farming in their background and their childhood experiences of local rivers became important to their narrative.
Council representatives saw stock access problems as easily address through better communication between their staff and farmers to encourage riparian planting and fencing. Farmers with experience of fencing and riparian planting identified numerous barriers to resolving the issues.
The report makes a number of recommendations.

  1. We need to develop good frameworks to ensure that environmental problems are well defined. We cannot underestimate the importance of the problem definition at the outset.
  2. Members of local communities need to be empowered, and given the agency, to determine their desired water quality and environmental outcomes, as part of a regular and iterative process. Fundamentally, this is about values.
  3. It is important to recognise that science has a critical role in informing the development of people’s opinions, informing options for possible solutions, and in comparing relative degree or extent of an issue. But science alone will not provide us with the answers; they exist within the community.
  4. We need to think carefully about our discourse, how we communicate our intentions, our experiences, and our beliefs. Language is more powerful than we might first realise.

The stock access debate is as much about how environmental and social problems in New Zealand, in regions, in local communities are constructed and pieced together as it is whether stock should be allowed access to waterways.

In the midst of much debate, discussion and heightened interest, and on the cusp of recommendations from Central Government that will determine the pathway forward for stock access, I consider that we need to crystalise our thinking on the problem definition. It is time to return to the problem definition, and acknowledge and debate the preconceptions and assumptions that are contained within that definition. Put simply, I believe the problem needs reframing.

Kristy McGregor

What are the critical success factors to an agricultural non-profit excelling in knowledge creation and dissemination for industry improvement.

Executive summary

The South Island Dairy Development Centre (SIDDC) is a non-profit set up through a collaborative effort of seven dairy industry partners: Lincoln University, AgResearch, Plant and Food Research, DairyNZ, Ravensdown Fertiliser Cooperative, LIC, and SIDE (South Island Dairy Event). Founded in 2001, it has operated the Lincoln University Demonstration Dairy Farm (LUDDF) as a means to advance South Island dairying. 

SIDDC achieves this through the development and refinement of innovative farm systems on LUDDF; decisions involve multiple stakeholders for management and governance support. It integrates applied research within and alongside the commercial farm operation to further industry perspective on key issues such as nutrient loss and ground water quality. Farmers and industry are then invited to engage with these findings through regular field days, weekly published technical notes and a comprehensive website and social media presence.

SIDDC also provides a forum for the partners CEO’s to network and gain context and perspective on industry issues affecting South Island dairying, and then work to align efforts in tackling these issues.

Recent uncertainty in the dairy industry around milk price and nutrient limits are creating opportunity for non-profits such as SIDDC to provide leadership to the industry. In this uncertain environment it is appropriate for SIDDC to review its strategic plan; this report is part of that review.

Through literature review of the successful strategies of non-profits I identified that clarity on mission is essential, and enables delivery on high value outputs in a social good entity. I developed a logic model to explain SIDDC’s value chain. It represents the flow of information across the interface of SIDDC, LUDDF and the wider industry. From this I identify the key relationships and focal points to create knowledge for industry advancement.

A strong strategy for SIDDC is in part born out of better understanding of its value chain and then through applying this to the evolving environment of the South Island Dairy Industry. I recommend SIDDC tighten up its mission statement, further survey its target audience for clarity on the market situation, and look to strengthen its relationship with Lincoln University to further integrate industry and academic opportunities for applied science.

Corrigan Sowman

Farmer capabilities: what’s next for New Zealand dairy farmers.

Executive summary

T he New Zealand dairy industry is constantly evolving with changing practices, expectations from beyond the farm gate increasingly affecting farm practices, and consumer demands shifting – both in terms of product quality and the method of production. These issues are particularly noteworthy when looking at the Golden Bay population where this study is based, given its diverse population and views. 

With increasing complexity and an increase in expected social and environmental responsibility leading to increased compliance that effects many aspects of the way we farm, from the feed used, farm inputs and human resource management to animal welfare, health and safety, and the environment.

These changing demands require farmers to continuously develop their farming capabilities to remain profitable. Many farmers are not fully aware of these changing expectations with a common view that it is just a “fad” and external parties cannot influence of farm procedures. This is not the case and the sooner this is realised; the sooner farmers can begin to upskill themselves in relevant areas they are deficient.

This report covers the issue by surveying a population of farmers in the North-West South Island to ascertain what they perceive to be the biggest issues dairy farming and whether they have the skills to overcome these challenges.

The results of the survey and literature review show Market Volatility and the increasing Social License to Farm are the principal challenges to both the dairy industry as a whole and farmers individual agribusinesses. The skills required to overcome these issues are possessed in varying degrees amongst the farming population.

Discussion is held surrounding the variation of skill competencies between generations and genders, and the importance of building farmer networks as this is seen by farmers as the most important source of new information and skills.

The importance of education and industry training will become more significant to success in the future, with the increasing complexity of dairy farming in New Zealand. At present there are promising trends for both degree level completion and industry training participation.

Alice Reilly

Courageous leadership: A look at present day leadership in New Zealand agriculture.

Executive summary

This report is a look at leadership in agriculture in New Zealand.
The purpose of this research is to provide a context in which leadership exists in the agricultural sector today. If we can understand the present situation and the reasons that has shaped leadership in this way, then this will give us far greater insight into the structure, skills and psyche of the sector. Once this analysis has been completed, discussion can then be had regarding what kind of leaders the future will need.
When the current context is used as a framework to look at the structure that currently exists, a pathway can be plotted to achieve this new leadership, while avoiding mistakes made in the past based on who farmers are and how they choose leaders. This gives the sector the best chance at success, by momentarily looking back and then looking forward with the current constraints in mind.

“Leadership has changed and these days’ leadership is very much about how you can get the best out of your team and the people around you. Leadership in the old days- it was very much about ‘I’ll lead, you follow’. John key is a good example of this [new] kind of leader. People say he flip flops, but it’s not flip flopping at all. He’s very good at understanding that you have to take people with you and that’s the only way you can be an effective leader and so it’s very much about the most effective leadership style for today’s environment which is taking people with you and someone that leads from within rather than someone that leads from in front. We are a much more inclusive society today. In a small country like NZ, if you go out in front and try and lead, there’s always people that want to chop you down, so I think the leadership style matches our personality in many ways. We don’t like tall poppy’s and people that go out in front. We like people that lead from within.”

The research undertaken, and the resulting report, seeks to answer questions around leadership in New Zealand Agriculture. What do we have currently and why has this evolved? What are the things that are working and not working and what aspects of leadership, sector structure and knowledge/skills do we need for our industry to have the best chance at success? The ultimate discussion focuses around the opportunities on how we achieve this leadership and strengthen our back bone industry of New Zealand. Agriculture needs to be made more resilient and economically viable enough to withstand any challenge it is likely to face in the future.

The key opportunities discussed are:

  • A collaborative sector through combining meat, dairy and Maori Agribusiness. This is imperative and it needs to happen from the farmers right through to governance. Collaboration will allow New Zealand agriculture to align its reputation and identity as closely as possible. This will require leadership we don’t currently have and policy that currently doesn’t exist.
  • Leaders are made either by becoming accidental leaders or seeking out higher governance roles. Both leadership beginnings will be required in the agricultural sector, with training and self-awareness to understand the limitations and insights of both.
  • Diversity of the leadership within the industry is imperative. That needs to include women, Maori and other ethnicities and younger leaders. This is not about gender equality; but different perspectives helping to enrich discussion and solution based leadership. The millennials could well be the key to looking at challenges we are yet to face, with renewed vigor and courage.
  • The leadership that is required for these challenges is different to leadership in its current form.
  • A radical change in how we sell our produce and who we sell it to is required, to attract a premium to allow farming in New Zealand to stay economically viable in the face of increased costs and regulation.

There is no doubt the agricultural sector needs strong, courageous, brave, skilled leaders with good judgement. Some of this currently exists, but a larger cross section of leaders with diverse perspectives need to display these attributes. If we have these ideas about the weaknesses in the sector, we can rectify these going forward. Training and leadership organizations will help this and there should be a larger focus on professional and personal development by leadership teams and potential leaders. However, the future challenges the industry is likely to face will help to cultivate strong and courageous leadership, and this leadership will prosper.

Had time permitted, ideally more leaders would have been interviewed to bring more depth of discussion and perspective. However, the research undertaken here can be built on at some stage. More research into leadership theory by Hogan, Marlow’s hierarchy of needs and different leadership styles would further develop this research. This topic would be worthy of a comprehensive thesis, as leadership is often talked about but rarely understood.

Validating the “brand” for New Zealand’s target dairy consumers in China.

Executive summary

The New Zealand dairy industry, like many other primary industries, fuelled by market volatility is at a pseudo crossroads in its evolution. Does it look to secure its past dominance in global dairy commodity trade and optimise its investment into established commodity infrastructure? Or does it forego past heritage and investments, adopting a more singular focused strategic migration into revenue dominance from consumer value-add exports and secure the perceived provenance value of our dairy products?

Anecdotally, the view of the majority of industry stakeholders is a push for the latter. New Zealand’s dominant dairy exporter, Fonterra has made a genuine contribution in this direction to date, but by its own acknowledgement, still has a long way to go7. Other dairy exporters are now re-aligning strategies to secure their share of the potential prize and as a result, considerable media and industry discussion has evolved on what needs to be done and the urgency behind the industry need.

I saw an opportunity to understand this subject better and apply a critical analysis of existing research, market participation and industry support initiatives to understand just what focus our industry needs in order to brand our products successfully.

China is an export market that has dominated export revenues for the New Zealand dairy industry in recent years and its demand for dairy with attributes like those associated with New Zealand is forecast to continue to grow17. Fonterra have recently stated the strategic importance of the Chinese consumer market within its strategic goals7. With growing attention and market penetration within China from competing dairy export nations, there is no better time for New Zealand to form a plan, which includes identifying a target market.

A review of existing literature and research identified that the current Chinese dairy market considers food safety, freshness and authenticity when making their consumer choices for food and beverage consumables. Existing New Zealand exporter marketing had not challenged the market with anything other than satisfying these key consumer needs.

The report proposes that the target market should be the emerging upper- middle-class demographic within Chinese consumer society. These consumers had been found to be young, adventurous, well-travelled, independent thinking, while maintaining traditional Chinese benevolence and health/wellbeing values20. They display much of the same behaviours observed within their western “lifestyle consumer” peers and combined with an empowerment to now establish a generation identity, are likely to be attracted to a brand purpose rather than more sterile functional attributes.

Existing literature points toward an opportunity for either the New Zealand industry as-a-whole or individual exporters to develop a story to support product differentiation. This has been partially accomplished through the national NZ Story Group and quality assurance platforms such as inSight, but to date the story does not appear to be compelling enough to draw the market demand and premiums the industry seeks.

Past research such as that by Lincoln University’s AERU has identified generic Chinese consumer feedback on the importance of many of New Zealand’s credence attributes but fell short of being specific to dairy, the identified target market, and did not challenge survey respondents to make trade-off selections to simulate the actual rapid product-purchase process. I conducted a quantitative survey of over 500 upper-middle-class Chinese consumers using basic milk powder as a sample product and asked participants to prioritise factors I predicted would determine their purchase decision.

The results confirmed that historically understood consumer needs of Food Safety and Freshness still dominated consumer priorities, but that attitudes towards genetic modification had changed to a more negative perception. New Zealand’s traditional credence attributes of environmental stewardship and Animal Welfare best practice continued to rank as important but not critical and that what value these attributes did provide, stemmed from an association with health benefits.

It appears that the “NZ Story” New Zealanders are familiar with and associate much of their industry pride with, is either not fully understood by the target market or does not resonate. It was identified that only those consumers that associated environmental attributes with food safety benefits provided a willingness to pay a premium. My recommendation for future research is to better understand the factors within the potential NZ story that will engage the interest of these target pioneering consumers, thus creating a value behind a desire to be associated with New Zealand.

There certainly needs to be energy directed at establishing a robust channel of current market intelligence within both the Chinese retail and e- commerce markets across all aspects of consumer needs and attitudes. Such information will need to feed brand development and future functional innovation focuses.

A word of caution though, as it may just be a matter of time before this ever-modernising and westernising consumer demographic simply “catch up” with their western peers and evolve an appreciation (outside of personal health benefits) for our existing ethical product value all on their own.

 

New Zealand growers priorities.

Executive summary

The aim of this research project was to understand the main issues that growers perceive are (or will be) affecting their businesses and industry. A survey with 233 responses and four focus groups (two focused on vegetables and two on fruit) were conducted to get a snapshot of the industry and to help guide the strategic review for Horticulture New Zealand. Survey respondents were predominantly small and medium sized enterprises with most (89%) indicating they had 20 or less full time equivalent employees year round. 35% of survey respondents indicated that they employed more than 20 people in the peak season (some over 150). Annual turnover for 67% of the survey respondents was $1 million or less with 36% of survey respondents indicating they had a turnover of less than $250,000. 

The survey found that these issues were thought to have had the most impact on growers businesses over the past five years (in order of perceived impact)

  1. The price of inputs
  2. The cost of compliance
  3. Market access
  4. Food safety
  5. Health and safety

The survey found that the top five issues thought to be facing growers businesses in the next five years were (in order of perceived impact)

  1. Health and safety
  2. Biosecurity
  3. Market Access
  4. Cost of compliance
  5. Access to Water

Growers thought that the issues Horticulture New Zealand should be focussing on for growers were (in order of priority):

  1. Biosecurity
  2. The cost of compliance
  3. Health and safety
  4. Access to water
  5. Market access

However, the priorities changed with the availability of seasonal labour being elevated as a priority (along with employment and immigration law). A similar pattern occurred when the results were filtered for businesses that were fully vertically integrated, possibly indicating that more vertically integrated export businesses, those with a single desk marketing structure and fruit growing businesses are more concerned with seasonal labour shortages than other survey respondents. A comparison was made between businesses that grew 100% of produce for the domestic market and those that grew 100% for the export markets. The differences in priorities mirrored that of fruit and vegetable growers probably due to the export only group being predominantly fruit growers.

The survey indicated a growing concern about access to water moving from 48% to 71% (+23%) from the current situation to the future. Concern over the impacts of land fragmentation concern also rose from the current to the future scenario (+7%) as did the perceived impacts of land availability (+13%).
When asked about decision making priorities, the number one consideration growers had was financial sustainability with 144 (77%) rating this as their number one priority. Environmental sustainability was the most common second choice with 60 (or 31%), the third, fourth and fifth priorities varied between environmental sustainability, business reputation, worker welfare and lifestyle/family impacts; the most commonly ranked least important was ‘wider community impacts’ with 122 or 54%. This echoed other studies of this type which have indicated that financial sustainability was most important, but environmental sustainability was of growing significance.

Business aspirations were assessed, and the most common response was a plan to double yield (40%) followed by staying the same size (40%) and (more concerning) getting out of the business (20%). Businesses planning to triple, more than triple or shrink were 14%, 7% and 4% respectively. When filtered for age there was an increase in the percentage planning to exit the industry (from 20% – 34%) however, this was not found to be the single determining factor for those planning to exit the industry. When age range was compared for fruit and vegetable growers the data indicated a high percentage of growers in the over 65 age group for both groups but more fruit growers in the ‘over 65’ age bracket and more vegetable growers in the younger age brackets.

Although there were found to be key differences between the fruit and vegetable sectors’ priorities the main issues that growers felt Horticulture New Zealand should address included biosecurity, access to water, health and safety, land availability and reverse sensitivity issues, labour (seasonal and permanent) and career paths. They also felt there is a need for horticulture to ‘tell its story better’ to be recognised and understood at a government and community level, and for Horticulture New Zealand to promote what it was doing so that growers recognised its value.

Overall this study highlights the diversity of horticultural businesses in New Zealand and the different priorities of growers. The difficulty of an industry body representing these diverse growers at a national level moving into the future is discussed, and recommendations made including regular grower surveys, ongoing quantification and calculation of its value add to growers, promoting succession planning and careers in the industry and communicating the value of the sector to New Zealand.

Angela Halliday

How has New Zealand dairy employment trends changed in New Zealand since 2000.

Executive summary

For the last 15 years I have been involved with the dairy industry in the capacity of a rural bank manager . Prior to this I worked as an accountant, property valuer and seasonal farm worker.

Ironically I started with another topic in mind “key factors to staff retention in Northland dairy farms”, however after numerous discussions with clients the topic evolved into the change in employment trends in the New Zealand dairy industry. The rational for the selection of topic was fundamentally due to the banking relationships held with clients with a large percentage complaining about the difficulty in attracting and retaining staff. 

I believe that there is an economic cost to many Northland dairy farmers in regards to staff turnover and retention which inhibits many farms and farmers from reaching their potential. I also believe that via better staff retention communities will be less nomadic and with a stable environment there is the ability to establish roots to aid and add to the community dynamic.

During my tenure as a rural manager there has been significant change in the dairy industry and the purpose of my research is to understand how this has impacted employment in the dairy sector.

I reviewed historic research conducted in a similar vein with a view to identify themes behind their work to enable me to establish my own hypothesis. Common threads were collated from this research work in to a survey to complete comprising questions around these threads from both an employer and an employee perspective.

Michael Skudder