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Putting a face to the challenges of small, rural businesses in New Zealand.

Executive Summary

The school bus pulls away from the farm driveway and the already-exhausted mother sinks into a chair at the kitchen table to drink her now-cold coffee. The pet lambs have been fed, school lunches made, lost uniform items recovered, homework sorted and kids packed off to school. There’s washing to hang out, beds to make, housework to do… and she’s expected at the yards at 10 o’clock to help with the drafting. Somewhere in there, she has to do some work for her business too.

Down the road, someone else is cursing at their screen because the computer won’t load the latest orders from their company website because the internet speeds are too low and they can’t do it via mobile because their farm has no cell phone reception. Another rural business struggling to do business.

The purpose of this project was to give a more personal view of the challenges facing small rural business owners from their own experiences and perceptions. I wanted to create a greater understanding of those challenges and how those business owners felt about them.

I defined small as self-employed people with fewer than five staff (mostly working alone) and rural as being in a rural area or rural service town (and not farming). I surveyed 24 small, rural business owners under five sections–governance, operation, technology, communication and personal. After collating and analysing the results, I identified specific challenges to investigate further.

Rural areas do have their challenges, but they also have many opportunities and resources for small business development.

Rural people running non-farming businesses or urban people moving to the country to run businesses for a variety of reasons, are doing their best to overcome these challenges to create successful rural businesses. Challenges such as work-life balance and distractions, human resources, rural connectivity and general lack of business know-how.

In some cases, they are issues facing people with small businesses all over the world. But in rural New Zealand, it’s not always easy to solve them in isolation.

Comments about rules and regulations mainly came from those businesses in food production and health and safety–they have no choice but to deal with legislation being governed by their respective government departments.

For human resources, it wasn’t necessarily the lack of people to employ but the added responsibility of being an employer.

Rural connectivity was about the lack of internet coverage and cell phone coverage, not knowing the best or most appropriate software to use within their businesses and the lack of postal services. There is a great example of a community fighting to fix its internet woes and one of my survey respondents is part of that community.

Work-life balance evoked a range of emotions, especially when the family home was the place of business or the business seemed to play second-fiddle to the farm. Distractions fell into the same category, especially when the ‘distractions’ were children, farm work or house work.

I discovered the best things business owners can do is get help, ask for advice and improve their own knowledge. To quote one of the HR websites I visited: “Getting it right is so important and so cost effective. Getting it wrong is very costly.”

Knowledge is power. It doesn’t necessarily have to be your own knowledge – that’s where networking, mentors and coaches can be useful. But I would implore small, rural business owners to take the time to try to improve their knowledge – it will help them and help their business. But on the flip side, don’t be scared to pay the experts in areas of great difficulty or implications.

They need to do their homework early, involve an accountant or similar consultant early in the creation of their business, spend time researching to-do lists and business plans.

This project includes three case studies of women who started their businesses with young families in tow.

Angela Payne’s children are grown now and Agri-Lab has been in operation since 1998 , but she has a world of wisdom for someone starting out – including the need for support and her “goddess principle”. Look after yourself first.

Gretchen King and AgRecord are coping with growth – in the business and in their family. She brought forward the interview with me because of the impending early arrival of baby #2. In the middle of one conversation later, she laughed wryly, and said “Babies, toddlers and business… tell them not to do it Kate.”

The enthusiasm from Michelle Burden with her Fantail’s Nest was infectious. She smiles when she talks about what she does and all the future holds for her business and her family. That’s why we do it.

Running a small, rural business has its challenges.

But they’re worth it.

This a personal project – I know many of the people I have interviewed and surveyed and I have made personal comments in the Findings & Discussions that relate to my own small, rural business

. Rural areas present many opportunities but business people in those areas face challenges they must learn to navigate (Siemens 2010).

When urban people think rural, they often simply think farms. They think sheep and cattle, pasture and fertiliser, tractors and motorbikes. They drive through farmland to get to the beach. They drive through farmland to get from one city to another. But often the communities and the livelihoods that make rural New Zealand are not in their sights.

Rural people know how special rural New Zealand is, that’s why we fight so hard to stay out here running businesses alongside our farms or within our homes.

Putting a face to the challenges of small, rural businesses in New Zealand – Kate Taylor

Drivers Of On-Farm Compliance.

Executive Summary

Meeting the requirements of compliance is an area that farmers struggle with. They are great at working the land and with animals and get frustrated at having to slow down to complete what is sometimes seen as needless paper work. Compliance in the agricultural sector is only going to increase and become more complex. Local communities and customers are demanding ethical environmentally sound products. They want safe, healthy, affordable food and don’t want the production of that food to be at the expense of the environment or animal welfare. The social licence to operate is becoming more important as communities are expecting more from agriculture. If the agricultural industry doesn’t act quickly to the pressures of the community, then regulation will only continue to increase.
Health and safety regulation changed relatively recently in response to poor health and safety statistic in the agricultural industry. The tide is changing but slowly, there are still those around with antiquated views who see health and safety as PC rubbish. You only need to scroll through the NZ Farming Facebook page for examples. Agricultural leaders need to take a hard line in this area, call out poor behaviour and distance themselves from supporting those who continue to display it.
To help farmers navigate the compliance minefield we need to understand what it is that drives them to comply. If we understand that, we will be in a better position to help farmers get up to standard and move beyond compliance. Moving beyond compliance and proving that farmers are meeting their obligations will slowly build the trust back within the local market.

Profitability will always come first in a business. This is not greed, it is economics. If a business does not turn a profit or break even it will not survive. Farmers need to be shown that compliance doesn’t have to be a cost, and in fact can improve profitability. All the farmers surveyed saw each area, Environment, Product Quality, Health and Safety and Animal Welfare as very important. the desire to do the right thing is there so If we can show how complying in these areas will help in running a profitable business, we should be able to help them progress. Desire and importance alone is not enough to drive compliance. Farmers are busy, and tasks are constantly getting prioritised; tasks where a farmer can directly link it back to profitability and success are always going to move to the top of the list.

There are three ways that farmers can be encouraged to comply with regulation, farm accreditation programs that will give them preferred access to market and premiums. Education around how complying can make their businesses more profitable and reduce their risks and lastly, negatively hit their profitability with fines and tighter restrictions. The first two options will be more successful. Option three doesn’t promote cultural change and relies on the regulator constantly looking over the farmers shoulder, as soon as the regulators back in turned behaviour will revert.

As an industry we need to move quickly to implement change and always be looking for better, more efficient, cleaner, safer and kinder ways of farming. We shouldn’t wait to see what society gets outraged about next and then respond. We need to predict what might become a problem and innovate around that now. We need to choose to change not be forced to change.

The time for change is now.

Executive Summary

If you talk to any vet out there, I can almost guarantee it wasn’t an offhand decision in their final year of high school that took them to vet school. The dream would have taken place years before. If you ask any vet, there will be a moment in their childhood; an experience or situation, that led them to say “I want to be a vet”. They then had to work hard at school and university to realise their dream and for the majority this became their focus and passion.

How sad is it then, that after ten years of being a vet only 60% of people are re-registering? What has happened to the fire and the passion over these years?

I surveyed 205 veterinarians and they have provided me with a lot of information about the good side and the down side to rural practice in New Zealand. I themed these up into 6 main areas:

  1. The job – the clients, the variety, after hours and job satisfaction
  2. The practice – the people, the culture and flexibility
  3. The lifestyle of a rural veterinarian
  4. The production animal industry- the changing role of rural vets
  5. Wellness – a look into stress, anxiety, mental health and wellbeing
  6. Other things that help retain vets – the side comments that I couldn’t ignore

It is up to all veterinary business owners and managers to ensure they do everything possible within their power to retain vets. Without young vets staying on and potentially they themselves investing in practices, what will the local veterinary practice look like in 30 years’ time? A few big corporate clinics over the whole country? Lay companies doing the ‘technician’ work and the odd ambulatory vet patching up the problems?
The main findings from my research were that although we cannot expect anyone to stay in their initial job after graduating there are fundamental problems within the rural veterinary profession that do need attention to help with retention issues.
Practices need to have good people work for them, who are supportive and aware and enhance the culture of the practice. There is a need for good strong leaders that also show understanding. Employers need to be innovative, flexible and adaptable; and ensure the healthy well being of all their employees.

The Time For Change Is Now – Kristina Dykes

Recruitment for the future: Making the dairy industry the industry of choice.

Executive Summary

The dairy industry has for a long time been challenged to recruit sufficient people to fill vacancies and to meet the needs created by natural attrition.

Generation Z (Gen Z) are people born after 1995. The relevance being that Gen Z are aged up to approximately 20 years (as at 2017) and are starting to join the workforce, therefore are considered the workforce of the future. Either having recently commenced their working career or still within the education system, the characteristics and priorities of Gen Z when considering employment are largely undeveloped and will evolve and mature in time.

The objective of this research project was to identify if misalignment exists in the priorities of both perspective employees (Gen Z) and employers. Surveys were used to explore and gain insights as to the characteristics of employers and Gen Z, further to understand what they each prioritised when considering employment from their respective positions.

After compiling and analysis the information there was not a lot of misalignment between what employers and Gen Z when considering Gen Z’s top three priorities for employment. However, there is misalignment between what Gen Z prioritise and the realities of a career within the dairy industry where long hours and poor rosters exist. This is creating a real barrier to the dairy industry being the career of choice.

Farm businesses and/or employment systems within the dairy industry need to change if Gen Z are to find dairy farm work more appealing.

Navigating the unknown: Effective primary sector leadership for the 21st century.

Executive Summary

“The intuitive mind is a sacred gift and the rational mind is a faithful servant. We have created a society that honours the servant and has forgotten the gift” Kasanoff (2017). Although this might be a paraphrase of Albert Einstein’s work, it is a quote that has spread all across the world and is a great example of right brain intuition and left brain rationalisation.

It is no secret that traditional leadership in New Zealand’s primary sector, and many sectors for that matter, have been known to be very logical and analytical. These leaders enjoy familiar, accurate and practical ideas. These attributes stem from the left brain and allow a clear methodology of decision-making to take place. To ‘think big’ or to be creative are common attributes of right brain thinking.
For many, left brain leadership can be seen as a comfortable place. It includes statistics to guide decisions, risks are mitigated at every turn, processes are familiar and the business ticks along in a very orderly fashion. However, businesses today require fast pace changes, decisions made on gut feeling, flexibility and often going down the path of most resistance.

The fourth industrial revolution is upon us and the world stage looks completely different to five years ago. Robotics, AI, quantum computing, 3D printing, the Internet of Things (IoT) and biotechnology are all examples of this revolution. Rural leaders will need to understand, embrace and foster these innovations as they become relative to the businesses in which they lead.

While the world is changing rapidly around us, we are also dealing with a specific issue within the New Zealand primary sector. We export over 90% of our primary production, Rotherham (2016), we have a major environmental issue on our hands, partially due to intensification, our markets are about to see a wave of synthetic products that could replace the need for much of our volume and the only solution I see to this issue is a mass shift to value-add production. So, how do you create added value in this rapidly evolving context? I believe you think differently, you think like your customers and you act fast.

Given this forecast of uncertain things to come, I explore the leadership capabilities that may be needed to manage this complexity in the 21st century.

My research not only explores the ‘why’ and the ‘what’, it also explores the ‘how’ and includes interesting case studies demonstrating what change might look like.

Navigating the unknown: Effective primary sector leadership for the 21st century – Sophie Malone

Regional changes in the New Zealand Dairy Industry: 1995-2015

Executive summary

During the last two decades (1995 to 2015) the New Zealand dairy industry has undergone significant growth. Nationally, cow numbers have increased 70% from 2.9 to 5 million, the area in dairy has increased 45% from 1.2 to 1.75 million hectares and milk production has increased 129% from 8.1 billion to 18.6 billion milksolids (DairyNZ 2016).

There is significant public concern over the water quality of our streams, rivers and lakes. A number of reports indicate dairying contributes a disproportionate amount of nitrogen to waterways relative to other pastoral land uses. In areas with declining water quality it is easy to assume this is a result of increased dairying, given the overall growth. However, it is likely regional variation exists with some regions having static or declining cow numbers, in which case drawing a link between declining water quality and increased dairying may not be justified. Alternatively, water quality may not have changed in some areas where rapid growth has occurred.

The aim of this report was to present industry trends based on objective data for each region. This can be used to help develop effective regional policies and strategies for the dairy industry, including using knowledge of farm systems and farm demographics to increase effectiveness. For example, targeting a particular segment of the industry such as a certain locality or herd size. Due to time constraints it was out of scope to explore what drivers may have led to any regional changes identified.

Data were sourced from the New Zealand Dairy Statistics and the Dairy Industry Good Animal Database.

These data confirm significant changes in the New Zealand dairy industry between 1995 and 2015, which differ by region. Regions were classified into three sizes (by number of cows): large, medium and small; and into four groups by the scale and direction of the change in cow numbers: decreasing, static, slight growth and strong growth. Five regions, Taranaki, Northland, Wellington, Tasman & Nelson and Marlborough have had static cow numbers for a decade or more and some of these regions are now below their peak numbers. Auckland has fewer cows than it did in 1995. The remaining eight regions have had an increase in cow numbers, and are still growing or have been growing until recently. Waikato, Canterbury and Southland have experienced significant growth and are also large dairying regions.

The planned start of calving date has either stayed the same or moved earlier by up to 15 days, depending on region. This is likely to have resulted in increased feed demand on-farm and a shorter winter period, decreasing the time available to increase body condition. Northland had an increase in autumn calving cows in the late 1990s, as has the Waikato since 2013. The percentage of autumn calving cows was relatively constant or declined in other regions.

There has likely been an increase in feed demand on-farm since 1995 due to stocking rate, with biggest increases in stocking rate in the late 1990s and early 2000s. Canterbury has the highest average stocking rate at 3.4 cows/ha in 2015, but the area used in this report does not include the wintering areas used frequently in this region. The West Coast, Northland and Auckland have the lowest stocking rates at 2.2 to 2.3 cows/ha in 2015. The remaining regions all had stocking rates between 2.8 and 3 cows/ha in 2015, the majority of these have been relatively consistent for at least the last decade. There was a decline in the Friesian breed in herds since 1995. Overall, this means a likely decrease in liveweight per cow of between 5-15 kg/cow – thus decreasing on-farm maintenance feed demand per cow.

Increases in milk production per cow (and therefore feed demand per cow) has meant milk production also increased in regions with static cow numbers. In most cases the area in dairy declined (at least since 2003), so it would be important to determine the new land use of areas that have exited the dairy industry and drivers behind the increased milk production per cow to determine whether there has been a net increase or decrease in intensity of land use in the region. In the remaining eight regions the intensity of the dairy industry (cows/ha, milk production/cow) has increased, particularly in Canterbury, Southland and Waikato.

The key recommendations of the report were:

  • Each region should be treated individually; it should not be assumed that due to the national growth in the dairy industry that this has also happened in all areas. This also applies within regions. Blanket approaches are unlikely to achieve a desired outcome effectively or efficiently. Information/packages/policy should be tailored locally to increase effectiveness.
  • This study provides a strong foundation for further research, in particular, linking the regional and sub-regional changes in the dairy industry reported here with changes in water quality.
  • Further research could also explore the implications of the farm system changes reported here. In particular, determining the net effect of stocking rate, breed choice, calving date and milk production per cow on on-farm feed demand.
  • Quality spatial data and the ability to combine different industry data sources together to generate insight is crucial. No national, farm-level, datasets that cover all aspects of the farm system exist (nor can be created by combining different data sources). Without either comprehensive or reasonably representative datasets of farm-level data, the ability to create tailored solutions locally is severely compromised. Industry organisations, such as DairyNZ, could achieve better informed sector and catchment interactions by being able to verify existing, and collecting additional spatial data. This could be aided by negotiating access to data from MPI, and milk, fertiliser and feed companies.

Can we improve health and safety on kiwifruit orchards using software solutions.

Executive summary

Following the introduction of the Health and Safety at Work Act 2015 (HSWA) and a fatality on a kiwifruit orchard in 2016, the New Zealand Kiwifruit industry has begun a journey on improving health and safety practices on orchard. There has recently been a proliferation of software solutions to support on-orchard health and safety. This study aims to investigate the opportunities for using software solutions on kiwifruit orchards to improve health and safety.

A literature review exploring the diffusion of innovations theory and safety culture was completed. Fifteen stakeholders from the kiwifruit industry were interviewed covering growers, contractors and packhouses to investigate the current state of health and safety in the industry and explore the industries appetite for adoption of software solutions to support health and safety. The questions investigated what was important in health and safety solutions and how software solutions were beneficial over paper systems as well as the perceived barriers to adoption.
 
It was found that there is an opportunity to improve health and safety on New Zealand kiwifruit orchards using software solutions. For these solutions to be adopted and the improvements realised several factors addressing culture, awareness and the solutions themselves must be considered.
 
This report makes five recommendations:
  1. Develop case studies of short listed software solutions to increase awareness
  2. Commission a specific kiwifruit industry health and safety culture campaign
  3. Explore best of breed software solutions for all aspects of health and safety on orchards
  4. Investigate the development of a common data sharing platform for health and safety information
  5. Investigate opportunities to facilitate the enforcement of improved health and safety practices without fear of commercial implications

Short term discomfort for long term gain.

 

Executive Summary

This case study looks at the changes seen over the first eight years post conversion to organic viticulture and covers the first 150 hectares of converted vineyard area on a vineyard in Marlborough, New Zealand. The motivation behind this case study has come wanting to know what changes have happened on the vineyard in question since the conversion to organic management. The best way to understand and examine these changes, is to look back to before conversion and track the changes to see if there have been any trends forming. This case study has focused on the cropping, soil and plant changes for the period of 2002 to 2017 with the process of organic conversion starting in March 2009. Not all information has been available for this length of time, however consistent information was available from before conversion with regards to all of the parameters studied. This report has not gone in to the financials of the business.

With continued growth in the organic sector all over the world, and the increasing restrictions on new and existing agrichemicals, the direction towards future proofing vineyards, environmental stewardship and increasing quality go hand in hand with organic production principles. These have all been implemented on the vineyard covered in this study.

Cropping data was available for total yield of each individual block and yield per hectare, from 2003 to 2017. A reduction in yield is one of the most concerning factors for growers wishing to convert to organic production, however there was no decrease in yield on the vineyards studied. The main reason for there being no decrease is that the focus on quality, from conventional to organic management, has not changed. Quality is distinctly influenced by crop load, so crop thinning is carried out in years where there is excessive crop, either by shoot thinning early in the season or bunch thinning later in the season. This has happened in every season covered in this study.

Soil data analysis for some parameters was available from 2002 to 2017, where other parameters data was only available from 2008. Analysis of the biological parameters was not undertaken. There was no change in the pH or the Bulk density over the study period, however increasing trends were observed in the CEC and Organic Matter values, starting from around the time of conversion to organic management. One of the most interesting results was the increasing trend in available K from around the time of conversion, even though no K fertilizers have been applied. Potassium can be a major limiting factor in ripening of grapes later in the season, so this increase is very encouraging. Increasing trends have also been shown in Fe, Mn, Zn, Cu and B, though the data for these results were only available from 2008, one year before the conversion to organic management.

Plant tissue analysis data was consistently available from 2007 to 2017 and shows a definite decreasing trend for petiole Nitrate-N, right down to unreportable levels. This is directly related to the pale green leaves seen across most organic vineyards. However, the pale green leaves and the reduced canopy size has had no effect on the ability of the grape vine to fully ripen the crop retained by the management. Even with the decrease in petiole Nitrate-N, the total nitrogen percentage within the leaf blade remains constant. Increasing trends have been shown in the trace elements Fe, Mn, Zn, Cu and B though results are only from 2008 to 2017.

One of the key out comes from this study does not directly relate to the analysis of the data collected, but comes from the lessons learnt on the journey through conversion to organic management. Many of the techniques used for combating weeds and pests can be used, and have been used, in the areas of the vineyard that are still considered to be under conventional management, which is a major positive outcome for environmental stewardship.

 

Financial rewards within a sustainable kiwifruit business.

Executive summary

This report was written with the aim of exploring how other successful businesses within the Primary Industry can gain a higher premium on their products to give a competitive advantage and exclusive brand positioning. I wanted to see if there are any lessons that can be learnt and adopted by Zespri and Growers to gain an even higher premium on their produce for being a Sustainable supplier.

The research methods included:

  1.  A literature review
  2. An interview with three Primary Industry based operations
  3. A case study review of three Primary Industry based operations
  4. An online survey of Growers and Post-Harvest Kiwifruit entities

Key findings included:

  • Many New Zealand businesses are taking tentative steps into the world of sustainability
  • Businesses see competitive benefits from acting sustainably
  • Many leaders are aiming to seize sustainability leadership within their sectors over the medium term

This report was compiled with the help of many different people within the Primary Industries within New Zealand.

Financial Rewards within a Sustainable Kiwifruit Business – Matt Nelson

The potential role of trading systems in the allocation of nutrient discharge allowances.

Executive summary

Trading systems, as a tool to reallocate nutrient emissions are currently underutilised in New Zealand. This is primarily due to the under development of the underlying water management policies and regulations required for a trading system to operate effectively.

Water quality must be more proactively managed if we are to reach the goal of having 90% of New Zealand’s rivers and lakes swimmable by 2040.

As water management policies are developed the use of trading systems to manage discharge allowances is expected to become more prevalent. But a trading system alone is not a viable solution. A trading system can be used as part of a wider structure for managing water quality. It is also not the only solution available to councils, but it is one that is favoured by economist due to its ability to efficient price and allocate scarce resources.

For a trading system to operate efficiently it must be designed in a way that it is fit-for-purpose and is embraced by potential users. Education plays a huge part in the success of any trading system. This education needs to encompass the underlying purpose or problem which the system is attempting to mitigate, as well as the practicalities of how the system itself operates.