Synthetic food (SF) is being touted as a revolution in food production that could replace animal products. While the industry is more bark than bite at the moment, it’s rapidly gaining awareness and attracting significant funding by being portrayed as a solution to many of the global problems associated with conventional agriculture. As the pressure intensifies on humanity to curb climate change, all options are being considered and, with a carbon footprint larger than the global transport sector, agriculture is well and truly in the spotlight. Agriculture has held relative impunity from climate mitigation strategies up until now but SF is bringing that into question by providing a potential alternative method of food production.
The environment is one of the key drivers behind SF but there are others as well. The drivers are being used as a platform to promote SF as the way of the future and leveraging off the growing disconnect between consumers and the farms that currently produce their food. It’s too early to know if SF will actually compete at scale on a cost and quality basis but nevertheless, the messaging around SF is already having a negative impact on the perception of agriculture. Countries like NZ who rely heavily on agricultural exports are at risk of losing market share to SF as well as being tarred with the same ‘industrial agriculture’ brush as other countries and becoming what one journalist has described as the “Detroit of agriculture”.
As with many emerging technologies though, things don’t happen overnight and the devil is often in the detail. The NZ primary sector needs to resist the urge to take a stance against SF based on weak journalism and instead be part of an informed conversation. The first response from people a year ago, when discussing SF, was was ‘yuk, it will never take off because people want natural food’. Thankfully, the conversation is now shifting to ‘what could happen if SF did take off and how do we approach this potentially disruptive technology?’. SF needs to be approached with an open mind and lots of questions rather than building a wall to defend our patch.
NZ Ag needs to get a better handle on how conventional food measures up against SF based on the ruler that tomorrow’s consumer will use. Carbon emissions, soil conservation and animal welfare are some of the attributes that consumers will look for and this needs to become part of our marketing approach in the future.
In reality, conventional agriculture is more of a threat to the SF industry at the moment, not the other way around. SF consists of startup companies with products in the development phase and markets that are built on promises. This isn’t a reason for us to rest on our laurels but instead a window of opportunity to get involved and have a say in how the SF industry evolves. We can choose to be disrupted or help shape the future of food production by understanding the drivers behind SF and being part of the solution, not part of the problem.
Our economy is founded on excellence in primary production and exporting this produce around the world. Given our isolation and abundance of agricultural production, New Zealand has responded to the challenge of distance between the production base and markets through a focus on operational excellence. Continual improvement in productivity and efficiencies along the supply chain from perfecting a pastoral based farming system has enabled New Zealand to compete internationally regardless of distance.
Historically the United Kingdom and Europe were our main markets, with counter-seasonal demand. Therefore, the main goal was to produce more volume at a cost competitive price. Over the years New Zealand has diversified away from the traditional markets towards more emerging markets of Asia, particularly China. This pivot has been enabled through Free Trade Agreements that have allowed New Zealand product preferential access.
New Zealand will face new challenges as the global trading environment moves on from a period of liberalization. This presents significant challenge for New Zealand and a cause to reconsider how we could overcome the market production dislocation challenge. The New Zealand agriculture sector have strategies associated with greater internationalisation and market orientation, however there is limited evidence of implementation. The paradox between market orientation, greater internationalisation and a continued focus on operational excellence needs to be recognised.
If New Zealand wants to overcome the market production dislocation in a new way, it is useful to draw on the lessons of other small economies. This report investigates the market production dislocation of five other countries, and the ways by which each country has developed an eco-system to overcome this challenge. A framework is presented that sets out the importance of recognising the why, the how and the what of an eco-system to overcome the market production dislocation. Understanding the why, clarity of purpose, or in New Zealand’s case our kaupapa is critically important to establish to overcome the market production dislocation. Kaupapa can be defined as the principles and ideas which act as a base or foundation for action. Each country was found to have a burning platform that either forced change, or presented an opportunity to change. The inherent culture of each country combined with the burning platform challenge led to the purpose, or why, for change. Once the why is understood, the systems and leadership, and nature of value creation and realisation can be developed. These are secondary concepts, and can only be developed once a clear why is expressed.
New Zealand agriculture lacks a clearly defined kaupapa and this makes it impossible to create change within the industry. Without a guiding star, there is no chance to make difficult decisions or trade-offs. The paradox of market orientation and operational efficiency will continue to create conflicts within the agriculture sector and wider economy. Leadership for change needs to come from the creation of a united industry body that represents all sectors of the agriculture industry. The critical mass generated from such an organisation will be powerful when speaking on behalf of all New Zealand growers and farmers.
New Zealand can use this moment in history as a chance to redefine our kaupapa, and come together through collaboration. Success will come when New Zealand speaks with one voice when asked what the agriculture sector stands for. The paradigm of globalisation is shaky, and the opportunities for innovative business models due to global connectivity are higher than ever before. Now is the time for action.
Corporate governance has grown in prominence in recent decades to the point that it is promoted as a default business practice. This has more recently translated to a belief that all businesses should embrace good governance. In other words, corporate failure is often closely associated with poor governance, resulting in the widespread assumption that good governance is therefore a pre-requisite of corporate success.
Traditional corporate governance represents an ecosystem of rules, tools, influences and activities that collectively operate to direct and control an organisation.
While the re is no single accepted theoretical base for corporate governance, one – Agency Theory – which seeks to address the risks arising from a separation of ownership and management – overwhelmingly dominates practice and education. However, the governance needs of the bulk of our SME agribusinesses are not satisfied by an Agency Theory approach:
Governance as a means of Control : Strike one! SME – Agribusinesses are generally owned and operated by the same people or group, often a family, where Agency theory adds little or no real value, resulting in “management processes on steroids masquerading as governance.”
Governance as a d river of Strategy : Strike two! “Culture eats Strategy for breakfast.”
Green – Zone Governance – the role of Service: An opportunity to re-calibrate the approach to Agri-SME governance based on Resource Theory, which seeks to bolster the capability, networks, outlook and expertise of the business and business owner as a whole.
In a family business, genuinely fair outcomes are realistically few and far between – which is why a commitment to a fair process is so important, and why Service-focussed governance can help.
Green Zone governance assumes you already have control over your own organisation, and that you have the culture you need to win. If you have neither, introducing a formal system of governance is the least of your problems. But project governance might help get you on track.
We have inherited a brand. New Zealand was the last major land mass on earth to be colonised by humans, it is distant from most of the world’s population and has beautiful scenery and biodiversity. This brand is about a safe, unspoiled last paradise, or to quote a Rudyard Kipling poem: the “last, loneliest, loveliest, exquisite apart — ”. Brand New Zealand has been used for many years to sell our products and services around the world and in recent times Tourism New Zealand has built a marketing strategy around it, 100% Pure.
This study has come about because of a genuine belief that New Zealand is the greatest country to live in on earth. We are however regressing in some critical ways. The author believes we can stop the regression and build a robust and resilient economy without significant environmental loss. People are realising more and more the interconnectivity of all things on earth, human health with environmental health, our actions on environmental health and at the same time becoming globally connected within an instant by modern media. We are still perceived as clean and green by most of the world, and compared to many countries we are. Because of our position in the world, our brand and our demonstrated conservation leadership, we have a huge opportunity to leverage our economy into a higher value sustainable space that could be the envy of the rest of the world.
A Nuffield Scholarship has enabled the author to investigate this vision – including two international research tours, a study of international visitors and a survey of business and environmental leaders. It has helped him to learn, grow and gain a perspective, and now he can share what he has learnt This report studies the reasons why being true to Brand New Zealand is the best option for New Zealand agriculture. The aim of this study is to show that New Zealand, and particularly our farmers, need to be ahead of the game, stay relevant and have products in high demand in order to survive in a rapidly changing and sophisticated global marketplace. This report looks at the advantages as well as possible pitfalls this approach could entail.
The author was raised in backcountry New Zealand, travelled the world as a young man and learnt how lucky we are to live in this country. He built an eco-tourism farm in the backcountry and realised that we need to unite to look after New Zealand. Individual conservation efforts will never achieve as much as a combined and collaborative strategy will. From the world study and surveys conducted we know that New Zealand’s environment is hugely important to everyone; it is in fact the backbone of our economy.
Based on all that has been learnt or gleaned from the scholarship study, the following recommendations are made to help kiwis build a healthier, wealthier, more sustainable future:
New Zealand should develop a positive and engaging environmental vision that consolidates the aspirations of multiple key industries and the public in protecting what makes us famous.
New Zealand’s 100% pure image is our competitive advantage . As a nation we must strongly question any thing that is counter – productive to our brand.
The world is not short of food but healthy, quality products are in demand. New Zealand must align with what the world wants.
We can adopt and adapt best practices from other parts of the world. A more formal study should be completed of nations that are managing their environments well and strengthening their brands.
We need strong industry leadership to build some collaborative goals between agriculture and tourism. For example Federated Farmers and Tourism Industry Association could build a co m bined strategy that is mutually beneficial to the New Zealand story.
An economic shift towards value – add food and beverage production and visitor experi ences should be developed.
As international tourism to New Zealand continues to grow, we need to ensure that these visitors become customers of our produce and then go onto become ambassadors telling our story on our behalf .
Agriculture needs an education plan showing farmers what the affluent of the world are demanding: traceable, higher quality products with a story.
Educate New Zealand to realise that complacency is the biggest threat to t he future health and prosperity of our nation. Every farm needs a conservation strategy that is being put into action.
As a nation, we need to find innovative ways to increase our environmental spend by exploring more diverse sources of revenue for conserv ation.
New Zealand should implement visionary conservation programmes such as Predator Free New Zealand that will demonstrate our commitment to safeguarding our natural assets and engage people from all walks of life.
In summary we have a huge opportunity to lead the world in clean green living and to leverage serious economic benefit from this. The author believes these recommendations would strengthen our brand and start steering us in the right direction to supplying affluent consumers healthy products and experiences. The world is waiting for leadership around global issues such as climate change, resource use and safety. New Zealand can do it, let’s pull our socks up!
NZ dairy farmers are directly exposed to uncertainty and fluctuations in commodity pricing. Over the past ten years external factors have had a significant impact on dairy farming businesses, leading to increased financial pressure, delayed investment plans and solvency issues.
New Zealand (NZ) dairy farmers have been left behind. Sophisticated and diverse price risk management (PRM) tools are a vailable to our competitor farmers in the USA and Europe. This will impact NZ’s industries competitive advantage on the global market in the years to come. Farmers need to be prepared with a plan and strategies to manage price risk.
PRM tools are well advanced and diverse for farmers in parts of Europe and USA compared to tools available to NZ farmers. These tools vary from simple forward fixed prices in Europe to a variety of flexible hedging tools in USA. Processors, milk marketing companies, cooperatives, and/or financial brokers provide ease of accessibility to the tools and in depth information to help farmers utilise the tools, thus providing key competitive countries with an advantage.
These PRM solutions enable farmers to transfer the price risk to someone else via a processor or a futures exchange and experience the benefits of a stable profit margin. The choice to have stable or volatile profit margins has provided some farmers with different advantages. These include enabling new farmers to enter the industry with confidence, helping some farmers to grow their businesses with certainty and others to have the ability to manage debt and achieve their goals.
The introduction of PRM tools is relatively new to the NZ dairy scene and options are not readily available. PRM is a developing area and the availability and flexibility of the tools will depend on farmers understanding of the tools, demand for the tools and adoption of PRM. Further support by the industry is essential. Areas of support include more PRM tools, risk management decision making tools, margin calculators and or information that will help farmers understand their price risk and make an informed PRM plan suitable for their individual situation.
This report investigates the wide variety of ways that producers (farmers and fishers) have coped with constraints. These constraints include industry restructure, market pressures and environmental restrictions. How environmental limits have been navigated, and even utilised, is a major focus of the report since this is a current issue for New Zealand (NZ) farmers. In looking at the overseas stories and in ‘bringing it home’ to the experience of farmers in the Lake Rotorua catchment, the report explores what producers have done, how they have thought and what may be useful to them in the future.
Farming is an interaction between the individual farmer (often with family), the physical features of the farm and the wider environment it operates in. Because of the complex and adaptive nature of this farming system, a useful way of framing this report has been to use ‘resilience thinking’. Resilience is defined as a system’s capacity to respond effectively to change. Resilience thinking assumes that change is normal not unusual, and considers the adaptive capacity of the people involved with the farm system. It has also provided a useful model of responses to change–strategies of Exploit, Absorb, Adjust or Transform (EAAT) (Darnhofer et al. ,2010b). Resilience thinking allows us to view farming as a dynamic system that is shaped and re-shaped by changing contexts.
Overseas producers that have successfully coped with constraints seem to accept this inevitability of change, and are anticipating what that might mean for them as far as they can. Two major strategies for coping with a gradual ‘expected’ change pressure, such as environmental limits, are Exploit or Adjust. The first strategy is Exploit where the farm takes advantages of successful existing activities to compensate for the stress in other aspects, – adaptation is thus marginal. Farmers that successfully respond with Exploit often drive efficiency in their operation and/or increase scale; they have a clear understanding of what their resources are and how best to use them. The second strategy is Adjust. Here the disturbance requires more adaptation of farming – maybe new production methods, new products, on-farm processing, etc. Both Exploit and Adjust farming strategies employ excellent business management, have a range of networks from which to glean new ideas and consciously adapt farming practices to reduce impact on the environment (and often to otherwise respect what non-farming people consider important). Farmers who have successfully made more adaptations in their farming business have experimented or diversified – both to test options and to provide a ‘broader base’ to their business. These farmers also recognise the importance of their own relational skills. Final aspects of successful adaptation using an Adjust strategy involve farmers choosing actions that mesh well with their values and that in some way satisfy their identity as a farmer. This report includes many quotes and two farmer case studies that showcase these elements. Strategies for sudden change are Absorb and Transform – these parallel Expoit and Adjust, with Absorb coping with the crisis out of the farm system’s capacity to buffer shocks (eg using equity) and Transform responding to the shock with major changes to the farm activities. They are not considered in depth as they do not relate so well to environmental limits. Rotorua farmers have been working with regulatory limits to achieve water quality outcomes for over 10 years. However now they face a ‘step change ’ from staying within a nutrient cap to making significant nutrient loss reductions. While they have so far generally been able to respond with the marginal changes of Exploit, these farmers may soon need to adapt further and Adjust. A survey of Rotorua farmers shows that there is significant scope to support how New Zealand farmers cope with environmental limits.
Outside influences are most helpful with actions taken alongside their farm businesses (e.g. learning about the environmental issue, or increasing their involvement with community or industry groups). Both ‘thinking’ (e.g. considering different future possibilities for their farm) and actions within the farm business (e.g. experimenting with farm management strategies) also have significant influence by an outside person/experience. Rotorua farmer responses to open ended survey questions pointed strongly to: their need for confidence in the wider change process; a desire for multidisciplinary solutions; the deep value of interaction with others; an d the contribution of personal resilience factors to how they think about change.
The main findings of this project come from aligning overseas experiences with the responses from Rotorua farmers, which reveals several areas that require action in order to better support farmers to live with and shape change. These are listed below.
Social/situation enabling
Develop a strategy for understanding and fulfilling farming’s social licence to operate.
Support farmer confidence in the processes of achieving environmental outcomes.
Initiate reflection to reexamine farming beliefs and re-form meaning and identity.
Mind-set enabling
Train rural professionals to lead the way with the skills and language of adaptation, and to focus on the process of making choices in their work with farmers.
Widely explore what diversity may mean in NZ agriculture settings.
Develop a self-evaluation process for farmers to identify strengths and opportunities in their farming ‘change-ability’.
Relational enabling
Facilitate farmers entering into a multidimensional web of networks, which may have to utilise a range of means.
Creatively work relational skill development into more than human resource (HR) activities.
Functional enabling
Continue to build business, technology and systems understanding to provide a robust base for adaptation and a ‘library of innovation options’.
Work with the technology sectors that provide tools that will support NZ agribusinesses’ ability to retain their social licence to operate and remain profitable.
Industry transformation
Integrate the above and lead industry adaptation that answers society’s desires and thus protects future competitiveness.
Readers of this report will thus gain insight into the wide variety of ways that producers have coped with constraints and the experience and desires of NZ farmers now coping with environmental limits. Overall, this report signposts current opportunities to support adaptive and resilient farming in a changing New Zealand context.
Changing economic and social pressures in the rural sector mean farmers need to change the way they act and react to challenges if they want to survive and thrive. Strengthening rural leadership has been identified as a key opportunity to help famers to respond and adapt to their changing environment both on-farm and with in their wider sector. From the findings of my research, self-awareness and self-reflection are two recognised traits that show strongly in farmers who are performing well in leadership positions. The link between self-awareness and leadership is strong (Musselwhite, 2007), but the understanding of this link by farmers is limited.
By understanding their past, their experiences and actions, and connecting that with their personality type and leadership style, farmers will be more empowered and prepared to step into the leadership roles that are required to ensure the agriculture sector remains vibrant and adaptable in the future. When a farmer makes time to learn about and reflect on their past experiences, it creates a lightbulb moment.
This lightbulb moment creates an ignition of thought which stimulates them to seek what they need to learn about their leadership style and where they are best suited to contribute their leadership skills. Everyone has the potential to be a leader, whether in their own personal business or the wider sector. To understand this and make a conscious decision to place themselves in an area that is best suited to them, farmers then ensure their effort will provide the biggest benefit to themselves and those around them.
New Zealand pioneered the export of frozen sheep meat in 1882 and continues to be a world leader in many aspects of sheep breeding, meat and wool production and product development for both domestic and international markets. However we have never had a significant sheep milk industry and the question is why – or more importantly, why not?
Sheep milk has superior health properties, caters for the growing market premium around lactose intolerance, is arguably easier on the environment than other forms of dairy, and has a faster return on investment than cow milk.
Currently the world produces 10,122,522 Tonnes of fresh sheep milk, and parts of Europe and the Middle East have been milking for thousands of years. Some of the world’s most famous food ‘brands’ are products made from sheep milk including Rocquefort (France), Manchego (Spain) , Pecorino (Italy) and Feta (Greece).
This business plan for the NZ sheep dairy industry is one person’s observations and ideas after traveling for three months with a nuffield scholarship meeting and working with sheep milk farmers, small ruminant experts and retailers in Israel, France, United Kingdom, United States of America, Italy and New Zealand.
If NZ is to set up a strong sheep milk industry that has scale, high premiums and optimum volume we must think with the end in mind. Where do we want to position our products? And how are we going to get there? As a new industry we’re going to face many hurdles. We need to be able to adapt quickly, and learn from others around the world.
This report is a culmination of observations and ideas gleaned from countries with vastly different geographical environments, market opportunities, political and environmental constraints to NZ.
The target market for this report is business people who want to invest in NZ agriculture, farmers looking at alternative land use, and food and wellness product producers looking at utilising the superior health benefits of NZ sheep milk to meet growing market demand locally and Internationally.
The world is seeking two things which are NZ’s strength areas: food production & agriculture expertise. NZ has a goal to increase the value of exports 50% by 2025 but is hitting production capacity. For decades NZ’s exports of expertise has been ad hoc & uncoordinated, leaving money on the table. An integrated framework for trade negotiations, market access & exports of expertise = value capture. Robust strategies & management plans to commercialise intellectual property need implementing. Utilising its strengths to capture value, exports of expertise enables NZ Agriculture to transcend borders. Developing nations will meet the production gap – they have the scope for growth. Farmers and the primary industry need to get feet on the ground and seats at the tables of influence.
The research in this report was gathered in order to determine how mobile technology can deliver improved on-farm and industry productivity gains now and in the future and also to understand technology adoption and how mobile could deliver positive outcomes. The scope was limited specifically to New Zealand sheep and beef farming and focused on opportunities that can give a genuine return on investment. The information was collected both in New Zealand and in a number of their largest trading partners around the world including China, Northern Ireland, the Republic of Ireland, England, Wales and the US.
The initial research found that low numbers of farmers record data on-farm using mobile technology for simple day to day decision making. This in turn means that the level of data that is then attached to the animals electronically as they move through the supply or value chain is also low. The only data that remains with the animals is related to animal health declarations. The main reason that farmers gave for not carrying out more data collection was due to the time available to collect the data in relation to the perceived cost: benefit ratio. Further to this, almost all farmers felt current available mobile data collection equipment was not suitable to use to a level that will have a significant lift to their individual farm performance, nor is it able to create industry change that will provide enough financial benefit to them directly.
A further significant observation was the performance of those who were measuring their key performance indicators compared to those who were not. It was noted that there are individuals with a natural farming ability who are able to perform extremely well with little or no technology, often with higher on-farm performance than the innovators or early adopters. These individuals are able to monitor grass levels, stock condition and market conditions with little technology. However, the fact that 80% of farmers believe that they are in the top 20% would indicate there are far more farmers thinking they are able to do this successfully than actually can. This leads to the question : “how much could farmers improve if they increased the monitoring they undertook on farm?”
Research has shown that the adoption of mobile technology has not only changed the buyer behaviour of consumers, but also their decision making process. The improvement in logistics systems for perishable goods is enabling smaller retailers to compete with larger retailers for premium markets by shortening the supply chain. This in turn provides opportunities for more niche markets to be opened up for high end products, the likes of which New Zealand creates.
The red meat sector in New Zealand continues to underperform due to the huge variation in on-farm performance and supply/value chain inefficiencies, rather than change in demand or the product’s ability to attract a price premium over other proteins. Some of these in adequacies are small and could be reconciled relatively easily, while others are far more “There is nothing amazing about collecting data. Collecting data is just the basics” Eric Reid, Ex production director Moy Park Mobile technology is the technology used for cellular or wireless complex and would require the cooperation of processors, industry good and government organisations, both here and abroad. Individually incremental changes would not reform the industry but collectively they would have the ability to increase the overall performance to a level that would have a satisfactory return and may enable new opportunities to open up.
Mobile Technology has the potential to change farming as we know it by providing a platform that enables a more transparent value chain. In conjunction with a behavioural change, mobile technology can provide an easy, affordable, convenient data collection and delivery platform at all points of the supply chain.
This may create disruption by by passing agents as businesses up and down the supply chain could communicate information directly relating to products made transparent to them. This matching of specific products or product attributes between the seller and buyer at all levels is a way of turning the red meat sector into a more transparent value chain and deriving premiums for all stakeholders.
Before adoption of technology can take place, industry extension must look at what can be done to engage with different types of farmers. Once identified it may be possible to develop strategies that target the individual groups and enable them to achieve their desired outcomes. Moving to this more structured holistic model would provide an ongoing cycle of improvement.
Conclusions
Although some farmers use mobile technology very few have it as an integrated part of their farm decision making system , but instead use the information in isolation.
Many of the mobile applications are emerging but not in a commercially viable form because they are unable to satisfy farmers’ seven principles of the adoption matrix.
Technology will be responsible for the next doubling of farm productivity throughout the world – red meat is no exception.
The red meat industry is underperforming which, if it continues, will cause declines in stock numbers, exacerbating the problem.
Reforming the industry must start at both ends of the value chain. On-Farm–Developing Premium Markets
There is more gain to be made in the industry by concentrating on moving the middle rather than moving the top.
Cellular coverage in New Zealand is poor compared with many third world countries. Our future relies on it improving.
Using ave rage as a measure of performance averages out potential value.
New farm data tools are required focusing on automation and user experience (UX)
Farmers who want to continue must collect key metrics otherwise they will eventually be swallowed up by those t hat have created their own certainty.
Transfer of information between industry stakeholders is currently poor. Good research is not being utilised and a lot of the extension is confusing and unsuitable for the farmers it is intended for. “We need a market where quality attributes are rewarded” – Tina Mackintosh White Rock Mains
Recommendations
Information systems that provide positive productivity outcomes and enable a transparent value chain should be developed and implemented.
Investment in increasing the broadband coverage in rural areas is crucial.
Marketing should be focussed on product attributes that are inimitable to New Zealand as much as possible.
Farmers must monitor key performance indicators to aid decision making.
Accurate, clear Return on Investment (ROI) models focused on farmers must be created by industry that simplify the decision making process of adopting technology.
New technology should focus on simple problems first instead of trying to fix all problems at once.
Extension should be accompanied by personal service that is focused on thought leadership and enables the individual farmer to identify and achieve their individual outcomes (enabling).
We must not focus on farm productivity in isolation of the consumer.
Industry good extension needs to be clear, concise, modernised and include ROI modelling.
Integrated Farming Systems should be used to enable farmers to exploit the interaction not the average.
