Mel Poulton: Insights from a Special Agricultural Trade Envoy.
2014 Nuffield Scholar Mel Poulton is someone with a unique perspective. Well, two really. As both a food producing farmer and New Zealand’s Special Agricultural Trade Envoy, we asked Mel to share her perspectives on trade, Nuffield, Brexit, and an industry grappling with significant global challenges.
Question: What do you do in your various roles?
Mel Poulton: In and on my farm business, I’m on both sides of the farm gate. I do anything from stockwork to bulldozing, to making all the decisions required to run a business.
In the Special Agricultural Trade Envoy (SATE) role, following my appointment, border closures and a vastly different global operating context, have meant changing how the role is delivered. It’s a two-pronged approach with an international and a domestic focus, mixed with face to face and virtual engagement.
I’ve been more purposeful working with the world here in NZ, by way of direct engagement with the International Diplomatic Corps here (they are the eyes, ears, and influencers of their nations in NZ). This engagement includes taking Ambassadors on x-sector farm tours, hosting Diplomatic Corps meetings, and meeting with them one-to-one, or with industry groups. I am also working internationally on virtual platforms, speaking on panels, webinars, or virtual meetings with farmers, and private and public sector organisations.
Covid has provided opportunity for me to invest more time and effort with NZ sectors (all food and fibre – except Forestry and Fisheries). My background is the sheep and beef sector, but I put a high priority on building a greater understanding of the other sectors I represent as well. I use these insights when engaging with each of the sectors, government, and the world.
Helping NZ food and fibre producers broaden their understanding of the global and domestic context is a priority too. Both behind and beyond our farm gates.
Q: What changes have you seen since being in your SATE role?
MP: Quite a few things.
Trade negotiations, particularly the New Zealand-UK Free Trade Agreement (FTA), have been the fastest progressed trade negotiations in New Zealand history to get to Agreement in Principle – so I’ve been told. Much of this negotiation has been done virtually, also a first. This will change the way trade negotiations occur in the future. A lot less travel overall.
Direct and indirect farm subsidies in large economies, such as the USA, have increased exponentially. People may argue they have already exceeded agreed WTO thresholds.
There’s a growing distrust of governments in the democratic world. Governments need to work on their social licence to operate. Social licence is not just a thing for food producers.
Supply chain vulnerability.
Just In Time (JIT) delivery has been exposed for its supply chain vulnerability in this global pandemic. Economies and businesses will now be building more capacity in their value chain system. This will mean a more conservative approach to exports and imports, to withstand the volatility, uncertainty, complexity, and ambiguity (VUCA) in the world of trade, market access and freight.
Nevertheless, nothing beats high trust and long-term government to government, business to business, and people to people relationships across the world. New Zealand has optimised these relationships throughout the pandemic to utilise market diversity for navigating trade, market, and supply chain disruption.
For example, Covid19 related trade agreements to secure medical imports and food exports. As well as digital certification for export products, through to relationships that our major exporters have with freight companies, importers, and international customers. The last 18 months haven’t been easy, but these strong relationships, and diversity of markets, have shown their worth to New Zealand.
Economies are moving from thinking about food security, to actively putting mechanisms in place to secure their food supply in a pandemic disrupted system, e.g., green lanes in Europe. There’s also a slow nuanced shift from food security to nutritional security taking place.
Farmers and food producers in New Zealand and around the world are wrestling with the multi-layered challenges of regulatory pressure (particularly on the environmental and climate change fronts), as well as market volatility, and Covid 19 induced uncertainty. This is increasing farm input costs and diminishing the tools available for farmers to use to produce food.
As an example, farmers in Europe have real fears about their ability to produce the volume of food required to stay viable and maintain food security. The new farm to fork strategy in the EU is deliberately shifting organic food production up to 25%, with rules to reduce synthetic fertiliser by 50%. Glyphosate use is under threat too. In some places farmers can’t use it (I note in New Zealand, the EPA is currently undertaking a review of Glyphosate use). There’s major transformational change happening in Europe.
The rush of multi-layered change gives a sense of exponential pressure. Farmers all over the world are feeling exasperated, frustrated, misunderstood and under siege. All the same, if there is anywhere in the world I would rather be farming right now, it is here in New Zealand.
We’ve navigated major challenges in the past, and when farmers look at the change they’ve implemented on their farms over the course of their careers, or in the intergenerational businesses they are running, we can take confidence in the fact we are already change agents.
A uniquely positioned New Zealand.
From a New Zealand food producer’s perspective, farmers here are uniquely positioned. Without subsidies, we aren’t dancing to someone else’s tune in quite the same ways as farmers receiving subsidies elsewhere. There are two sides to this. On one hand we’re not being bailed out at the next threat, but we also get to take full responsibility to master the destiny of our businesses. So, we have an ability to create workable solutions in a way that keeps our businesses competitive globally.
With an innovative, integrated systems approach, we can create solutions to challenges like reducing our global warming impact, improving native biodiversity and water quality, while producing high quality, safe, nutritious food – delivered with integrity.
In New Zealand we have an industry ecosystem focussed on helping farmers create and implement solutions. Our research centres and academic institutions, both provide science and knowledge, and help support farmers crack real challenges. There are the easily accessible service providers, and the folk in Government ministries – who are in the teams working hard on trade negotiation to ensure the best possible outcomes for access to markets, and on removal of tariffs and non-tariff barriers to create a level playing field for New Zealand. Let’s keep it that way.
This ecosystem enabling success is our major competitive advantage in the world. We’ve really got to leverage this and remember we’re all on the same team.
We must not be paralysed by fear, but instead celebrate what we’ve already achieved throughout our farming careers and take confidence that we can use our whole systems thinking to improve what we do for our natural resources, our people, businesses, and our nation.
Q: What links between International Trade and International Policy have you seen, with direct and indirect implications behind your farm gate?
MP: Let’s summarise how it works first. There are recognised global challenges. Then international forums are established to address these challenges, leading to international commitments made by member states (different nations).
Examples of this include United Nations Sustainable Development Goals (SDG) and the Paris Accord on Climate Change. Some international commitments are legally non-binding. But where it applies to the WTO (World Trade Organisation) they are often legally binding.
Once those international commitments are made, each economy, member state, or nation must determine its own policy and regulation to deliver on its commitments. That gets shaped up (with some consultation in the process) and is rolled out by the government of the day, and folks like us everyday people have to make it work on the ground. The Government then reports back to those international forums, or institutions, on what our progress has been against the commitments the Government made. COP26 is an example of this.
Given New Zealand’s economy is so internationally exposed and dependent, we need to be at the international table to maintain influence.
But to have influence we need to have integrity and demonstrate action. So, these international commitments have been drivers for shaping NZ Government policy on Sustainability and Climate Change. Examples here are the New Zealand freshwater regulations and climate change targets. Both resulted in changes on my farm, and on farms all over New Zealand, which is increasing costs and could reduce revenue for some.
If we do it right, there could also be opportunity to reduce costs and increase profitability. It will be different for every business. The bottom line is that financially there’ll be change, so we need to reconfigure the financials for a new shape to our businesses. Easier for some than others, and not all will be the same.
The environmental, social, and economic outcomes are significant across NZ, and underestimated. In some cases, we might secure a market premium for this work, though there is no guarantee what we’re doing delivers a premium to food producers in New Zealand for all products in all markets. I have more confidence this work will enable us to obtain and maintain market access to customers.
This is where the work of our trade negotiators, ensuring a level playing field in market, is so critical for ensuring the changes we’re making here in NZ don’t make us uncompetitive on the international market. I’ve seen their tireless, relentless work, day, and night, to get the best possible outcomes for New Zealand. Many of these negotiators are the hidden superstars of our food and fibre ecosystem.
What is going on in New Zealand around environment and climate change is often a focus of interest from others in my international engagements. I talk about what these regulations and targets mean for me, and what I am investing in to address the challenges in my farm business, alongside promoting what other farmers from the different sectors are doing in New Zealand. I also give a clear message that much of this cannot be done quickly when taking a whole systems approach. Effective change takes time. Farmers the world over get this.
Q: How do you think Brexit will play out for New Zealand trade? The obvious and not so obvious.
MP: The choice of the UK people and UK parliament to pursue Brexit is forging transformational change for the UK food and fibre sector. The transition period will take 15 to 20, even 30 years to find a new equilibrium. Like the 30 years it took New Zealand to find equilibrium when agriculture subsidies were removed here.
This change requires a culture shift in thinking about UK farm business structures, their subsidy system, domestic policies, and rebalancing their trade and export portfolio beyond the common market, to a global market. Add major geostrategic inflection points in trade and security, affecting us all, and you have a UK trying to position itself as a global strategic leader.
Its focus in the Asia-Pacific region, particularly regarding the FTA’s it is currently negotiating with Australia and New Zealand, along with its formal request to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), all highlight the trade and security opportunities and challenges it perceives.
So, building more structure into the relationships of allies like New Zealand and Australia by way of FTA’s is an important part of their process to find their new place in the world. This is providing new trade opportunities for New Zealand, subject to the NZ-UK FTA and their accession to the CPTPP.
In the future it may create more competition in our export markets too. It will also create opportunities for more collaboration on the global stage, especially where we align with the values and perspectives that matter to both economies.
Q: What does New Zealand need to do more, and less of, now and in the future?
MP: Because our food and fibre sector is orientated to international markets, we need to continue to pursue being the best we can be. This means achieving optimal standards, positioning ourselves to have the best integrity, facts, processes, and story for all the concerns that governments, markets, customers, and consumers may direct at us.
Whether these be from the position of protectionism or not, we still have to give ourselves the best chance of capturing opportunity. So, concerns about animal welfare, food safety, or environmental stewardship, e.g., water, soil, biodiversity, chemical and fertiliser usage, climate change, labour, the list goes on. These are the things we need to keep improving to position ourselves to open as many doors as possible, and to keep flexibility, adaptability, agility, and economic viability open to us.
We have already demonstrated plasticity through this pandemic, and we need to fully embrace a plasticity approach in our lives, our businesses, and how we engage with the world.
We need to be able to maintain our essence and values, while changing and reshaping the way we live, do business, trade, and collaborate with others, as we all grapple with significant global challenges.
Q: How has doing a Nuffield Scholarship helped you?
MP: The Nuffield Scholarship has been an important part of my personal and professional development. It’s been a stepping-stone for doing what I do now, on and off farm. The international networks, the doors of opportunity opened, the domestic and international insights as well as the ‘aha’ moments. These all contribute to my thinking, conversations, and ideas on the farm and in the world of trade.
That said, and without taking away from Nuffield, the older I get and the more I learn, it seems the more questions I have and the more I need to learn.
I’d like to encourage all readers to keep that hunger to learn, take some confidence from the change we’ve already made on our farms, in our businesses and our whole industry with our systems thinking.
Let’s keep doing what we do best – producing top quality food and fibre to the best of our abilities.
Optimising all we do with high standards, care and integrity for our environment and natural resources, our people, communities, and for the economic viability of our businesses and nation.
Balanced with humility, we need to be able to hold our heads high and have pride in who we are and what we do. Keep being the best you can be.