Sometimes the purpose of a business is very clear, however many times it is below the surface, as businesses simply get on and “just do it”, but are driven by something in them that is great. Some themes come up frequently in terms of purpose – whether the businesses are outwardly successful or struggling. These are a willingness to:
fulfill a personal drive and ambition to do something great or to be the best
provide a foundation for family well being
fulfill a way of life and a genuine love of farming
provide something different that is good for people and the world
enhance financial wellbeing
simply do it, because it’s what we do.
The operations I have observed had a variety of ways of driving performance, and many different ways at attempting to improve their practices to achieve better results. Focuses included:
building and working from a solid financial foundation
enhancing competitive advantage and responding to the market
being more expert in technical aspects of their operation than others
having a good knowledge of the regulatory environment and using this to advance business and gain competitive advantage
maintaining stable access and right-to-farm suitable land-investing in their business and enhancing innovation
pushing the operation beyond its natural performance trajectory
recognising the capability of people in the enterprise and enhancing this as required
effective collaboration throughout the supply chain
an integrated approach to the supply chain
having a good story and telling it well-maintaining a commercial edge
organising themselves well and disciplining their strategic decision-making
trusting their gut
taking the leap into the unknown when it felt right
working collaboratively to enhance the businesses advantages as above
It is important to note that whilst many of the operations I studied are operationally sound, run professionally, and inspirationally led, not all are overwhelmingly viable businesses from a profit and loss perspective, or necessarily successful farming operations. There are many reasons this might be the case, but common themes are vagaries of the market and fickle consumer behaviour affecting demand in market, distortion of markets due to government influence, bad luck playing a part in business, or a lack of focus on profit and loss due to other factors being the prime driver of an operation.
To summarise, in observing the above strategies to achieve the purpose of farm businesses, I have distilled some of the key aspects that agri-businesses should focus on to drive performance.
Many if not all of these drivers are needed in some form to run a good business – and indeed many of the seemingly positive behaviours can be a negative and hold a business back if applied in the wrong manner (e.g. hyper competitiveness leading to low pricing, driving market share up and profitability down).
In this paper I will further expand on what I believe to be the key drivers of the agricultural businesses I have studied.
Perhaps the key overarching factor is that these businesses affect what they can, take account of the factors beyond their control, and get on with the job and make things happen. They are results-orientated rather than problem-focused. They work hard AND smart to make their own luck.
This paper explores the options available to manage effluent within the New Zealand Dairy Industry.
It also clearly investigates why Anaerobic Digestion is not suitable at its current levels of technology to be an option for commercial dairy farms in New Zealand.
Only 20 percent of the available effluent is collected in the Cowshed
High costs of substrate such as Maize silage
Lack of time and skills to manage the running of an AD plant
Nutrient levels are still maintained using this system
Then it provides some practical, innovative solutions to manage the effluent.
Using 3 key options for integrated management
Bio Crude manufactured using Algae
Dung Beetles
Precision Farming technology
It also challenges those within the industry to support change, and take action to implement the above solutions for the benefit of all those within the industry.
New Zealand potato growers produce on average 50tonne/hectare in the current farming system which on a global level within the potato industry is within the top spectrum. (www.fao.org)
For New Zealand to move up the ladder and raise the bar in terms of production, further investment into technology and advanced farming systems not commonly used in New Zealand to date is required.
One technology that could benefit the industry significantly moving forward is Genetic Modification (GM) of varieties. This could aid overcoming pest and disease pressures and allow growers to further maximise yields. The most important opportunity for farmers offered by GM is to drive some cost out of production and therefore increase the grower’s profit margin.
Research and development conducted to date in this area globally, GM has resulted in the development of varieties tolerant to the likes of blight, which does not only reduce chemical use (and the cost associated with this), but also makes the crop more environmentally friendly.
The identification of the Tomato and Potato Psyllid (TPP) in 2006 in New Zealand has resulted in a considerable increase of insecticide chemical use throughout the growing season to keep the crop clean and decrease processing defects. The use of GM could help by developing varieties to overcome such issues and further decrease the chemical use.
GM is not used in New Zealand to date commercially, and it will require education by industry for the consumer, and further research to prove GM is not harmful. I believe embracing the potential of GM crops would be beneficial to the potato industry in New Zealand, and increase New Zealand Export Income as a result.
The other technologies that will help potato production dramatically will be the use of variable rate fertiliser, especially nitrogen. Intensification of other farming systems in New Zealand is putting pressures on the environment and impacting the clean-green image we as a nation are currently renowned for. By using variable rate input technology we can manage fertiliser inputs based on potential outputs of the crop resulting in better efficiencies and returns to the grower.
Variable rate irrigation in – conjunction with GPS and yield monitoring will be another technology that could play a major role in potato (and other edible crop) production in New Zealand in the future. Although some of this technology is already available and is being used currently, it is not used as standard practice in Primary Industries as yet in New Zealand.
With increased data collection and more precise use of inputs we are likely to see a direct outcome of better utilisation of crop inputs resulting in increased efficiencies and possibly yield increases. Importantly this data and efficiency will play a role in meeting customer demand for food production with high environmental awareness (especially if marketed effectively on an industry scale), and demonstrate best farm practice and decisions made as a result of increased knowledge.
With global regulation so stringent and only likely to get more challenging we need to be at the forefront of quality assurance programs, meeting regulatory requirements within current farm systems and leverage off our historical “pure” clean and green image to maintain our competitive advantage as a primary exporting nation.
Knowledge and skill alone does not result in practice change. Verbal persuasion, even well-articulated has low impact. Great extension is about a consistent focus on delivering to farmer needs that are self identified as well as those from gap analysis and doing it in a way that results in practice change.
Seventy percent of change programs fail because we assume people are ready to change. Understanding the stage a person is at on the change cycle helps target effective extension intervention which improves the probability of being successful.
To influence change, at pace and scale, requires a focus on changing behaviour, and to change behaviour we need to change the way people think. Most human behaviour is learnt from observing others. Through observation, one forms an idea of how new behaviours can be performed, and this coded information serves as a guide for future action. Practice change will occur when an individual believes they can be successful (self-efficacy).
Farmers learn best from other farmers and keeping farmers in the driving seat will increase participation and relevance of any extension activity, leading to more change on farm.
Identify barriers and then remove them before trying to change behaviour. Involving the farmers who need to change in the planning of the change initiative and the decision-making makes it easier to identify barriers and enables trust. Making general principles local through role modelling and or good story telling reduces barriers to change.
Breaking recommendations into small change steps helps to make success easy. Following up, and involving gatekeepers (decision makers) of the system are key triggers for change as restraining forces are reduced.
To support self-efficacy any change program requires some one on one and or group peer support as change is often stressful and confidence may be lacking.
Successful practice change begins and ends with a successful partnership. Therefore extension professionals will be more effective by building an ecosystem of partners.
The extension professionals’ toolkit needs a change model that guides extension to work systematically through the change process with farmers. It also needs an evaluation framework to measure effectiveness. One model is the See (belief’s), Do (behaviours), Get (results) Model. If a farmer is not happy about their results, extension can work with the farmer to review their beliefs which can then be challenged to change their behaviour to improve the results.
Recruiting extension professionals for head (intelligence), heart (passion) and tenure, helps to build trust and credibility with farmers which is important to influence change. Building capability is important in both hard skills (technical) and soft skills (understanding people and relationship management). Persistence is also needed as change happens over time (at least 3 years).
The recommendations outlined in this report operate as interdependent determinants in practice change. These recommendations will not only help extension professionals do their job effectively but also enable them to enjoy their work more while being effective at influencing change on farm.
Farming in New Zealand has changed dramatically in the last two decades with 283,700 hectares of land being converted to dairy between 1996 and 2008 (Land Use and Farming Intensity Report, 2013).
The New Zealand dairy system is unique in the respect that it is grass based with supplements and rations making up less than 25% of the diet, unlike other dairy systems throughout the world with comparable production figures, where the cattle are housed for at least a portion of the year and are fed a total mixed ration (TMR).
Milk production both per cow and per hectare, is also increasing (See Figure ) and has resulted in demand for supplementary feeds grown outside the dairy farm gate. Much of this feed is sourced from the arable industry, whether that is from the supply of grains or from the production of winter forage crops.
Given the growth and intensification of agriculture in New Zealand, we are faced with the prospect of more environmental regulation as government seeks to ensure a sustainable future for the environment.
Grass based grazing systems have little opportunity for the capture of nutrients and manure from grazing animals, unlike the housed systems, where effluent is captured and spread onto land, at a time when there is less potential for runoff and leaching.
Arable systems have historically used artificial fertilisers in order to maximise production, however there is the opportunity to utilise the potentially excess nutrients within the dairy systems. This may be by piping liquids from the dairy to the arable farms, but will require the land use types to share the same geographical area in order for the cost of infrastructure to be viable.
The wintering of dairy stock is set to undergo some changes in the near future with regard to land use capabilities and nutrient run-off and the leaching. The off farm wintering is a very integral part of the overall dairy system and allows production to be pushed beyond the capabilities of a self-contained unit. The system again, places pressure on the environment when the cows are fed forage crops in situ with no opportunity to contain nutrients and effluent.
When we look at other systems around the world, a recurring theme is indoor wintering, and the control of the effluent that it brings. We are beginning to see some of these indoor wintering systems introduced in New Zealand, mostly on the dairy platform where there is the opportunity to milk later into the season and increasing milk production which offsets some the cost of infrastructure.
Implementing this system creates the potential for further nutrient overload within the dairy operation as more feed is introduced to the dairy platform; therefore it is only viable if the dairy operation is a self-contained unit.
If the dairy unit is not self-contained and is reliant on the arable farm as a source of feed over winter, the wintering barn or pad may need to be on the farm that the crop is grown in order to maintain the nutrient balance and reduce transport costs. This will however mean some fundamental changes in the cost structures that are currently in use are in order to ensure viability of both businesses and may require some transition period.
With respect to the opportunities for the arable industry to supply feeds better utilised by dairy cows, it appears there has been little work done in that field. The dairy industry in the US and the EU tend to focus on breeding feed efficiency into the animals and sourcing a range of products to formulate the diet required to enhance profitability.
Often products within the diet are by-products of other processes as opposed to a particular crop. This could be distillers grain from ethanol production, almond hulls, or even stale bread which can be sourced in the Netherlands and the UK at a cost cheaper than wheat. There is little scope individually for these crops to be tailored to a particular dairy diet, however when used in a blend, the mix can be adjusted to suit the requirements of the herd or in the individual cow.
The arable industry globally tends to be focused on breeding and agronomic management that allows for better water use efficiency, disease controls and nutrient deficiencies, and more recently the renewable fuels industry. This is wide-ranging and involves ethanol production, bio fuel production and feedstocks for anaerobic digestion. These are important for sustainability of the industry, but if we look at the feed industry there is little focus on the needs of the consumer.
Historically quality testing of feed grains has been related to the pig and poultry industries rather than the dairy industry. This differs from maize silage and other forages which have been selected for bovine animals.
The New Zealand arable industry is particularly innovative and adaptive to change and is well placed to participate in the dairy value chain and to assist with sustainable environmental outcomes.
The power of the 21st century is now literally in our hands. We have never before had such a powerful tool to connect with millions of people from the comfort of our own home and all around the world it is changing the way business is done. Social media has given the power to the voice of the average Joe, and whilst that may come with its challenges, the opportunities are there for the taking, especially when it comes to telling the story of New Zealand agriculture.
Social media is now a mainstream form of communication around the world, and continues to grow in popularity with the increase in the number of smartphones, and the ease of use whilst on the go. There are now 1.5 billion users of social networking platforms in the world and other industries have embraced these platforms in business and consumer engagement, however it has not been widely accepted in agriculture. Limited research available shows that there are increasing trends in farmer and agribusiness uptake in social media as the popularity of smartphones increase.
The purpose of this report was to assess the value social media could have for the New Zealand agricultural industry to propel us into the 21st century. By meeting a wide range of farmers, agribusinesses and professionals around the world, particularly in the UK & USA, I discovered four main themes of value for the industry.
The value of social media for the agricultural industry lies in the value of social capital. It brings the farmer, industry and consumer closer together so that there is more transparency, engagement, trust and authenticity in the supply chain. Financial returns are often an indirect result of improved social capital, however this is difficult to measure.
The four key areas of value are:
1. Networking (Farmer – Farmer) via social media platforms (such as Twitter) can:
Reduce social isolation for farmers
Enable farmers & agribusinesses to meet and network with other farmers, agribusinesses and consumers domestically and globally
Enable interaction directly with people of influence
Provide you with a wealth of knowledge and ideas from a range of sources
The AgChat model (Twitter online discussion group), which is widely used in US A, UK, Australia & Ireland, is a great concept for facilitating discussions of industry issues between farmers and agribusinesses.
2. Industry Knowledge, Extension & Marketing (Farmer – Agricultural Industry)
Marketing using social platforms can enable agribusinesses to connect with a growing farming demographic online by providing content that is of value.
Lobbying on social media brings together a collective voice to bring about action and change by interacting with people of influence and power directly. Facilitating large groups of people and discussion around an issue of importance is made easier using these platforms. Examples of this are:
UK #sosdairy campaign in which Twitter was used to coordinate protest efforts and spread the message to the public about what farmers were actually getting paid
In Australia, the ban on live export brought about a growing number of farmers engaging in social media to lobby to politicians & #supportliveex
Extension and knowledge transfer of agricultural practices may reach a wider audience by using social media tools
Connecting and engaging with consumers is becoming more important as our consumers increasingly are using social platforms to make purchasing decisions. Opportunity for producers of food and fibre to use social media as a tool as part of their marketing toolbox.
Social Media enables farmers to be part of the conversation surrounding controversial and emotional issues to do with farming practices E.g. animal welfare, genetic modification and environmental issues. People will be talking about our industry whether we are involved or not.
Allows farmers and the agricultural industry to better understand our consumers needs and viewpoints
Helps build trust by being transparent and authentic
4. Crisis communication
Communication strategies for the agricultural industry should include social media by using two – way communication with authentic, efficient and transparent voices.
Learning’s from the Fonterra botulism case in 2013 highlight the need for effective communication on social media in the agricultural industry.
In all respects it has been acknowledged that social media is not a silver bullet for every communication challenge that the industry has in respects to crisis communication, marketing, lobbying and networking however it does add a lot of value in conjunction with traditional methods.
My recommendations for getting the best value from social media and the above findings:
More industry training for farmers and agribusinesses is required so that farmers and agribusinesses understand the capabilities of the tools better.
Formation of AgChatNZ Twitter discussion forum (currently in the process of this with other industry members).
Farmers should be utilised more in social media marketing for our produce internationally as they are the human face in the supply chain, which provides authenticity and trust.
We have the opportunity to bring the world to our farm gate and connect to our consumers with authenticity and transparency. We have the responsibility to tell our story to protect our industry, and now we have the power to as well.
“It is not the strongest that survive, nor the most intelligent; but the ones that are most responsive to change” – Charles Darwin
Agriculture’s importance in the world is growing. In 1988 New Zealand agriculture was infamously described by David Lange, the then leader of the Labour party as “a sunset industry”. He believed New Zealand’s reliance on agriculture was diminishing and the country should now be focusing on manufacturing and tourism. 25 years on agriculture is as important to New Zealand’s economy as ever. Today agriculture is seen as an industry of the future with the outlook for farming never as bright.
Every day there are more people on our planet than the day before. Demographers tell us that the planet is gaining around 160,000 extra people every day. With global starvation already higher than it has ever been, especially in the developing world, pressure on agriculture to lift production and fill this food shortage will continue to increase.
Where will this additional food come from?
There will be small gains made from better food distribution, improving transport networks and by minimising the enormous wastage from paddock to plate but the greatest increases in available food must come from increasing production on farm. Farmers’ ability to keep lifting yields at the same rate using conventional farming methods is diminishing, so any further gains will involve the capacity to adapt and adopt new technologies. These new technologies, whether they are precision agriculture, genetically modifying crops or something else entirely, will certainly play a part in achieving the additional production that is needed.
New Zealand is a country that can benefit from this increased global demand for food. With an economy that is more reliant on agricultural production than most, increasing agricultural exports would have direct benefits to the wealth of our country. New Zealand has many natural advantages, from its fertile soils and temperate climate, to its established production systems and recognised quality assurance programs, creating huge opportunities for agriculture throughout the country. As an already high yield producer, New Zealand’s gains will come from looking at fresh ways to improve production and adopting new technologies rather than any modest variations to our existing farming systems.
Two of these technologies, Genetic Modification (GM) of crops and Precision Agriculture are both likely to play a big part in New Zealand’s agricultural future.
Due to rapid advances in equipment, software and expertise, the Precision Agriculture industry will continue to progress and evolve helped by a greater uptake from farmers. The ever increasing environmental pressure now on farming means the ability to accurately apply, record and map any inputs will become more important than ever. The real benefits of precision agriculture are still ahead of us.
While the advantages of precision agriculture are generally understood and accepted, the benefits of the genetic modification of crops are less so. Critics of GM food products insist that they are unsafe, untested, unregulated and unnecessary. But the facts are starting to show otherwise. We are starting to consistently see many benefits including new varieties of crops like wheat or maize with resistance to different pests and diseases.
This in turn is leading to lower pesticide use and higher yields. It is often quoted that in North America there has been over two trillion servings of food that contain GM ingredients without any cases of documented harm. Is this enough? How long will it take before the science is seen to be proven?
Currently New Zealand is practically free of any Genetic Modification due to the very strict regulations around release. But for GM to be a useful tool for the future, research has to start now. This research is critical to New Zealand’s future.
Globally public attitudes towards GM may be softening but the New Zealand consumer still might not be quite ready for GM technology. New Zealand farmers will be commercially growing genetically modified plants one day, but not yet. While there is growing interest from producers and consumers, there still needs to be more information on the benefits and risks so the purchaser is able to make an informed decision.
Education is the key, moving people away from the extremes to more middle ground. There is also a need to respect the views of people who take a contrary view and respect people’s right to choose.
But Genetic Modification is a powerful tool if used well which may bring many benefits to future generations. Can New Zealand agriculture afford to turn its back on this?
New Zealand has very high rates of entrepreneurial activity by international standards, but this has not translated into the expected numbers of large and high growth businesses. The result is significant loss of opportunities for growth. This phenomenon has been attributed to cultural influences (primarily lack of aspiration) and a possible lack of finance at a transitional stage in business development. Agriculture is not immune to this problem, as it is not performing to its potential in a number of areas. The goal of this study was to find companies or industry sectors in other countries that had experienced growth, identify factors that they had found helpful during the process and then relate those experiences back to the situation in New Zealand.
Three themes have emerged. They are firstly the use of alternative sources of funding, secondly the value of networks and mentoring and lastly the potential of new strategic tools such as business model generation. These represent effective responses to problems often associated with growing businesses: the need for finance, the need for information, confidence and role models and the need to continue the process of innovation over the long-term. These factors were reported as critical for success and/or may also relate to commonly identified problems here in New Zealand.
As regards alternative sources of capital, crowdfunding was identified as a tool with potential value for agriculture. This form of finance involves large numbers of people who each invest a small amount of money in a business, as opposed to the more traditional methods, which depend on smaller numbers of investors providing large sums. A universal element of crowdfunding is the use of internet technology, to reach many potential investors cheaply and easily. This and other characteristics make crowdfunding particularly suited to the needs of small and medium-sized businesses, which currently make up the bulk of the New Zealand economy. Crowdfunding has its roots in the United States during the 1990s, adopted primarily by the creative and technological sectors. It has now become a significant source of funding, with US$2.7 billion invested in 2012. This figure is forecast to top US$5 billion for the first time in 2013. Governments in Italy and the US have passed legislation to facilitate the practice, seeing it as a valuable aid to economic development. New Zealand has now also passed laws designed to encourage crowdfunding, which will be implemented in April 2014.
Until now, the primary sector has had limited involvement with crowdfunding, but this is beginning to change. Agribusinesses in Europe and the US are now taking advantage of the opportunities that it provides. Limited access to sources of ongoing investment remains a problem for business in this country. This is forecast to worsen in the primary sector, with a future finance gap of $210 billion predicted for agriculture between now and the year 2050. Therefore, despite some (relatively minor) risks associated with it, crowdfunding may prove a helpful tool to remove some of the barriers to entrepreneurial growth in New Zealand.
Another theme that emerged from case studies was the use of networks and mentoring. Networks have long been known to support business performance and are considered particularly important for their role in enabling the flow of information, that core building block of innovation. However, they often remain under-utilised. New Zealand’s failure to grow large and high growth businesses from a base of early innovation has been attributed for the most part to culture. Innovation is also a largely psychological process, so measures designed to improve entrepreneurship practices must engage the minds of those involved. As demonstrated by the case studies, one of the most effective ways to do this is through networks.
Some of the characteristics of effective networks were identified as follows :
A successful network speaks to the identity of the participants. The best examples become participant-led, allowing them to take ownership of the process.
A successful network is also topical and changes with the feedback of the network members. It must be based on a genuine need. Over time, as issues and demands change, the network will alter. At some point, it may look quite different to what it was in the beginning, with different participants, focus and even function. This is to be expected and is not a failure.
Different forms of network may preform different functions, so the goal of the network determines in part the form that it should take. For example, to promote radical innovation, global networking should be encouraged. To foster better links across the value chain, an annual meeting of all interested parties in a sector has been shown to be very effective. If the goal is to increase the performance of grassroots businesses, while they may benefit from a large annual gathering, they derive greatest value from regular local meetings and peer mentoring.
Finally, networks are vital to building and maintaining the performance of any sector and should be actively fostered at all levels.
The third theme involves the use of a strategic tool known as business model generation. The core assumption behind this technique is the requirement for continuously re-inventing your business model, in order to preserve and strengthen your competitive position. The reasoning behind this is as follows.
A gradual decline in rates of innovation (and subsequently performance) is perhaps the single biggest risk to mature businesses. It is now almost universally recognised that innovation must be ongoing and companies must be preparing to reinvent themselves, even when times are good and they are under no immediate pressure to do so. In this way, they protect their competitive position and ensure the survival and growth of the business in the long run.
Simple as this sounds, it has proved remarkably difficult to achieve. In an effort to provide tools to help the process, a number of strategic approaches have been explored, of which business model generation has proved an effective example.
Business model generation is based on a number of other assumptions that have their roots in innovation theory. These include :
The need to look holistically at the entire system of doing business and its context. A description of the business model provides this.
As people process visual information faster than any other kind, business models are best described graphically. No one person is in possession of all the pieces of the business model. Therefore, multi-disciplinary teams are required to achieve the process of describing current and future models.
The current business model must be outlined, before any further work can be done, such as assessing weaknesses and strengths, comparing your model to that of competitors or creating new and innovative business models.
The process of business model generation, its relationship to related theories and role in promoting innovation and growth are described. Although it has been successfully adopted by some of the world’s most innovative companies, it remains an emerging field in agriculture. As earlier outlined, New Zealand has difficulty in translating high levels of innovation and early entrepreneurship into large and high growth businesses. Once larger businesses appear, continuous innovation is widely recognised as necessary to ensure survival and encourage further growth. Some commentators have also described agriculture in New Zealand (dairy excepted) as showing many of the signs of a mature industry, with slowing productivity and use of longstanding business models. By aiding the production of novel and more competitive ways of doing business, business model generation has resulted in increased growth and sustained performance in companies that implement the process. Therefore, it may be of significant value if applied more widely in New Zealand agriculture.
To conclude, we have an opportunity to grow the primary sector in this country, building on our already high level of early stage entrepreneurship and innovation. The message of this report is that we need to create the right environment for agribusiness to maximise this potential. We already have the most difficult element in place – innovation. Now we need to correct the weaknesses in our innovation system. One way we can do this is by encouraging use of new tools in finance and strategy and by taking advantage of the benefits of networking. This will strengthen our industry, ahead of what could be an extremely exciting and rewarding period for agriculture.
The ability of a business to compete in an ever changing world is linked into its ability to identify and adopt innovations. Introducing new ideas, alternate systems and different technologies enable a business to change and meet the market; it maintains competitiveness and relevance in an ever changing world.
A major challenge facing agriculture globally and within New Zealand, is the increasing more complex farm business environment. Price volatility, climate change and shifting societal expectations on food producers are bringing greater demands on the farmers of today, and those of tomorrow. The ability and willingness of farmers to explore new ideas and adopt innovation will play a significant factor in the success of farming in the future.
Identifying and adopting innovation is a complex and personal process, and improving our understanding of innovation adoption will aid in lifting the performance of farmers and farm business.
An individual’s upbrining, their educational achievement and their participation in the world around them, establishes their willingness or openness to innovate. Whereas the adoption of that innovation is influenced by an individuals own aspirations and goals and under-pinning the personal driver, is the compulsion to improve an individuals’ place in life. Interacting with these personal drivers are external factors which also influence the willingness to innovate. These factors disrupt the status quo and bring about a change which requires a response from the individual.
An innovation needs a supportive environment to flourish. Leveraging off the personal drivers and factors increases the likelyhood of the innovation to be adopted, and building a supportive environment increases prospect of the innovation becoming normalised into the business.
NZ’s future agricultural success lies in a skilled workforce implementing innovation along the value chain. NZ agriculture needs a workforce that challenges the status quo and looks for creative solutions. Building these skills is the repsonsibility of all members of the agricultural industry. The industry must acknowledge the importantce of formal education and structured informal development, and build a culture of learning and discovery. This starts with our young people .
The willingness to innovate is the beginning of the innovation process, and the full value of the innovation needs to be demonstrated in technology transfer and the extension processes. Within these systems recognotion of drivers other than financial drivers need to be accounted for, and innovation ‘hot spots’ identified.
NZ would do well to consider structured innovation development for farmers through processes like Innovation Incubators; structured creative exploration groups with supported discovery and inplementation of innivation. Facilitated creative exploration within a supportive network would add significant value to the business of agriculture, and establish a blueprint for innovation discovery and adoption within the farm gate.
By building our people and equipping them for a changing world, NZ will be well positioned to captialise on the challenges of the future. The heritage of resourcefulness and creative problem solving is embedded in the NZ farmer’s psyche, and building skills and competencies to support this will strengthen our future and consolidate our position as producers of high quality, safe and secure food.
To explore a vision for grower representation in the New Zealand wool value chain.
Background
Wool was once New Zealand’s most valuable export product – it was to our economy what dairying is today. Currently, however, the New Zealand wool industry is weak and fragmented to the point of being dysfunctional. This is not a judgement of the individual businesses involved, but rather a symptom of the commoditization of a product along a convoluted supply chain.
In 2009 New Zealand sheep farmers voted, by a slim margin, to discontinue the wool levy paid to Meat and Wool New Zealand.
Four years on it has been established that wool growers are now ‘under-represented’ in a number of areas.
This representation – what works, what doesn’t and what would it look like for New Zealand wool growers – is the focus of this report.
Key Factors for Success
Successful industry representation has several defining features.
The first is elected representatives simply doing what they commit to do.
Great industry representation is PROACTIVE.
Elected representatives are approachable and respectful of their industry members.
When all these factors combine, the result is an overwhelming sense of positivity. While all the participants are fully cognisant of the issues and challenges facing the industry, they are confident that everyone is pulling in the same direction. In the case of New Zealand wool, the following must also apply:
Grower, Government, key decision-makers, media and community acceptance of the true value of the New Zealand wool industry.
Combined grower and Government funding.
Awareness and adoption of research outcomes.
A cohesive and progressive wool industry throughout the value chain.
Enhanced awareness and thus improved global market position for woolen textiles – with an emphasis on New Zealand wools.
Financially and environmentally sustainable land use.
Recommendation
New Zealand wool growers need to be focusing forward as an industry – to be looking to realign the value chain that begins with us, the producers.
Collective producer investment in industry representation and R&D provides cohesion and in turn, strength to growers.
Proposal
Levy set at an initial 0.03c per kilogram from growers at first point of sale.
Matched by Government investment to make up a total 0.06c per kilogram of greasy wool sold.
Based on figures estimated by the Beef + Lamb Economic Service the total greasy wool sales for this year (2012/ 2013) will be 172,600 tonnes
Doing the basic maths results in a total Wool Levy income of $10,356,000 per annum.
Allocation
There are several factors that must be built into this programme.
Equivalent of Government contribution must be allocated to Innovation, Research and Development to avoid any criticism of industry protection (World Trade Organization requirements).
There must be surety around funding for the Campaign for Wool.
A small, effective team of dedicated people will be pivotal in the success of this programme.
