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Industries do not change when new systems are introduced, they change when people adapt to those new systems.

COVID-19. New Zealand Lockdown. We all lived through not knowing what was coming next. What does this have in common with Greenhouse Gas (GHG) emissions? Uncertainty and imposed change.

While as a nation we were unsure how long Lockdown would go for, farmers do not know what regulations will come into place and in some instances if their businesses will survive. For both COVID-19 and GHG system changes, there is no known endpoint, you cannot see the virus or gases and the science is evolving. Both are technical challenges with critical social components. And finally, both have a large amount of imposed change in a pressured timeframe.

The objective of this report is to build awareness. Awareness of what people are experiencing internally before being able to accept and embody change. Lockdown has given a global lesson in empathy. In my opinion, building a community of support, where people can lean on each other when they are struggling and celebrate with each other when they win, is crucial for achieving decreased GHG emissions.

Achieving reduced GHG emission targets is a New Zealand Inc challenge, not solely an Agricultural sector challenge. This report proposes a Team New Zealand approach to achieving national GHG emission targets.

This report explores the social aspect of a GHG induced system change from two perspectives: a psychological and an imposed change management view. The example of Lockdown is used as is a recent shared lived experience at a national level and as such, one all New Zealander’s can relate to. The report proposes increased awareness at a national level of the change farmers will have to undergo. The metaphor of Lockdown is used as all New Zealanders experienced it and as such, it is an efficient way to build empathy for those facing imposed GHG regulations and the resulting on-farm system change.

During Lockdown, uncertainty was great. The end goal of stopping the spread of COVID-19 was known, but the plan to get there could change at any time. Different numbers were reported from various sources internationally. It was confusing. There are elements of contested science including treatment methods, the effectiveness of masks and the Lockdown approach in general. And what does compliance look like? If a vaccine is successfully developed, will we maintain our autonomy, or will vaccination be mandatory?

Consider the above while thinking about farmers facing impending GHG regulations. The end goal to decrease New Zealand’s GHG emissions is known. New Zealand’s farming practices will have to change. However, the plan to achieve reduced emissions is not confirmed. And when it is, changes to that plan appear inevitable. The numbers are changing as the science evolves and this leads to confusion. There are elements of contested science including measurement and definitions. And what does compliance look like? How much autonomy will farmers retain and how much will compliance cost?

The psychological Stages of Impact experienced due to COVID-19 have been documented and are applied and compared to facing imposed regulations. The stages are information overload, concern, confusion, panic, fear and end with sadness. This conveys what farmers might experience facing impending GHG regulations.

As a nation, we experienced moving through the Imposed Change Curve; a seven-step change model. Initially there was (1) shock and (2) denial. Blame was bandied about as (3) frustration grew. Energy levels and motivation was low as we navigated the (4) depression stage. The stage where uncertainty about the future is felt the most. But as we started to (5) experiment with the new systems and developed our capability within the new rules, our confidence grew. It is (6) decided to slowly accept change until it becomes fully (7) integrated. People may not agree or like the change, but it is accepted as the way things are.

During Lockdown, there were certain events that helped with the uncertainty: The 1pm updates by the Prime Minister and senior officials with confirmed case numbers and next steps. The fact that we were all working together as a nation to reduce the spread and save lives. Friends and family who provided support through Zoom and messages. The common theme – conversation and community.

To achieve GHG emission targets, this report proposes:

1. A cohesive Team New Zealand who all understand their role in reducing emission numbers: A New Zealand Inc. approach is taken. Team New Zealand rises to the challenge, not just New Zealand farmers. Achieving GHG targets also secures trade relationships and the trust of the international consumer. In turn, the Primary Industries contribute to New Zealand’s economy and thus the prosperity of the nation. Road transport accounts for a large proportion of emissions alongside agriculture – we all need to work together to make a difference
2. A trusted face of GHG mitigation with national recognition: A national GHG representative who the general public recognises and trusts. Like Dr Ashley Bloomfield during COVID-19. This person would communicate quality information, strategies and tactical plans. This role is important for gaining momentum at a national level
3. Practices and support to build and grow resilience: Resilience is crucial for enduring times of uncertainty. Creating awareness of what the stages of imposed change feel like and providing tools to better support farmers through those stages. The sector has a mental health issue that needs support. Furthermore, adaptation at the rate that is required requires resiliency

We have a rich history in being innovative and resourceful to solve difficult problems. We have shown the world what is possible when Team New Zealand pulls together. Pulling together to achieve GHG emission targets is the right thing for us to do.

2020 – a year most of us will never forget – a year of reflection of what truly matters. Our narrative for so long in New Zealand has been about protecting the environment and our beautiful natural assets. But with the onset of COVID-19 we saw the narrative shift and our primary focus became people – people’s health, well-being, and livelihoods. We became a ‘team of 5 million’ and previous perceptions of urban and rural divides became non-existent as growers, farmers, and producers were the ‘essential services’ that got us through.

The below Māori proverb perfectly encapsulates this people-centric view that resonates with me so strongly:

“HE AHA TE MEA NUI RAWA?
HE TĀNGATA, HE TĀNGATA, HE TĀNGATA.
WHAT IS THE GREATEST THING?
IT IS PEOPLE, PEOPLE, PEOPLE.”

The following research question was subsequently developed: what is the social impact of changing land use in the Hawke’s Bay region?

The objective of the research is to provide another layer of insight and use this as a platform for further collaboration and conversation – understanding the social impacts (real and perceived) of contrasting primary sector investment in rural Hawke’s Bay – comparing sheep and beef, horticulture, dairy and forestry.

Hawke’s Bay is a place of diverse geographies, climate, people, and culture. Qualitative research was undertaken to bring the voice of the people to this report. A wide cross-section of pan sector viewpoints were interviewed inclusive of iwi, corporate, regional/local government, industry bodies and farmers.

Three key themes emerged from the interviews and thematic anlaysis regarding the social impact of changing land use:

1. Employment and trainng opporutnities
2. Values and perceptions of changing land use
3. Māori communities and post settlement land use

It is projected that from 2020 to 2050 Hawke’s Bay will have a 66.8 percent increase in forestry and 35.8 percent increase in horticulture. These are significant shifts and there is a responsibility on farmers, investors, industry leaders and government bodies to collaborate to ensure positive social outcomes.

The following report provides diverse insights coupled with recommendations to enable positive social outcomes in the region. The future is exciting and there is no one single answer. However, we must think holistically to deliver a positive triple bottom line – social, environmental and economic outcomes to sustain for generations to come.

The rise of Veganism, and uptake of plant sourced protein in diets is seemingly under the spotlight. The valuable attributes and characteristics of protein has been recognised and sources are up for debate. Traditionally in the western world, the consumption of animal sourced protein such as meat, dairy eggs, fish have sustained and fuelled generations. However, the popularity and rise in diets centred around plant or alternative protein has become circulated. It is hard to quantify the gravity of this message and subsequent impact on animal protein production however it is not to be ignored.

The purpose of this research was to explore the rise in veganism and the factors which influence a shift in perception and behaviour when it comes to consuming protein sources.

Through a study of literature, the role of protein in our diets has been explored as well as production and consumption trends in New Zealand and globally. The relationship with protein sources and the human behavioural aspect towards varying food messages was woven into the discussion. Unstructured interviews were conducted amongst animal and plant protein producers as well as industry partners and consumers. A personal 21-day vegan trial was also conducted with observations of thought, emotions and social attitudes recorded.

The key findings centred around three influencing factors which underpin why people change their diet from animal protein sources to plant or alternative. These are: Animal Ethics, Health and the environment. Each factor is explored with emotional response knitted into the discussion. The disparity in gender was also touched on as well as the influence of information channels.

Compassion for and concern regarding the farming and rearing of animals has been a factor behind the movement towards vegetarianism for years. The application of anthropomorphism which is the attribution of human traits, emotions or intentions towards animals induces feelings of guilt around animal product consumption. Guilt is self-conscious whereas compassion is felt as an expression towards another being. The combination can lead to people eliminating animal protein sources from their diet to avoid and disassociate from these feelings. Women tend to alter their diet based on compassionate grounds more so than men. With consideration of emotions stemming from animal protein consumption, it is necessary for humanity towards animals throughout the supply chain to be shared.

Another factor is an invisible belief system supporting choice to consume animals. The rise of plant-based diets is challenging ideology which explains defensive attitudes towards plant-based eaters. The vegan trial conducted supports theories that socially, people find it confronting when others choose to deviate from consuming animal protein.

Climate change is denoted as the defining issue of our time. Science and media imply animal agriculture has a negative effect on environment and is not sustainable. Overwhelming insignificance in the face of this problem leads to utilising food as a mechanism of control alleviating guilt and stress associated with degradation of natural environments. Disconnection with farming and food production allows room for people to transposition global environmental issues arising from animal protein production to New Zealand pastoral farming.
Health is where people are receiving mixed messages and where the channel of information becomes so important. The medical community have linked red meat to non-communicable diseases. The accuracy of findings in this space are questionable due to lifestyle factors and meat quality, however the message is enough to tarnish red meat protein sources. In contrast, plant and alternative protein are perceived as natural and healthy which is misleading based on various additives and intensive manufacturing processes.

Recommendations have arisen in the form of further questions and consideration for the animal protein industry, its producers and marketers.

Focus on the Three Pillars

A focus on eliminating concerns or stress points regarding food production such as impact to environment and animals will lead to positive eating experiences. Industry, marketers and food producers need to acknowledge, understand and address the factors behind a shift to plant based diets. An option could be to partner with plant-based producers or have plant-based product offerings to extend branding and increase consumer choice. All food producers and marketers need to ask the question: How does what and how we are eat make us feel? The psychological affect and relationship people have with food has a huge bearing on health and wellbeing.

Extend Dietary Guidelines

Existing diet guidelines are centred around physical health however an extension to address stress associated with diet labels/terminology and restrictive eating would be beneficial to consumers. Eliminating mixed messages from the health sector and food producers would reduce confusion. Through identifying and targeting stress factors, industry can enhance a positive relationship with food, which is imperative to health.

It is important to acknowledge that this research only brushes the surface of several facets relating to factors driving dietary change away from animal protein consumption. People are guided by their emotions and there is a gender differentiation response to food messaging

The Manuka honey industry in New Zealand underwent a massive change in December 2017 with the new definition for Manuka honey released by the Ministry for Primary Industries (MPI). The new definition of Manuka honey was released in response to the growing concerns of fraudulent honey being sold as Manuka honey and damaging the brand’s integrity. The change in definition caused many Northland beekeepers to have their business become unprofitable due to old fashioned beekeeping practices, which caused the Manuka honey produced to fail when tested.

The change to the Manuka honey definition and the significant challenges Northland beekeepers face in terms of unfavourable spring weather, early Manuka flowering times, swarming, and access to early honey flows has caused many small beekeepers to close their business since 2017.

There is a general belief that beekeeping in Northland is too risky and that there is no profitability remaining in the Manuka honey in the region. This project sets out to determine if the Northland Manuka honey industry is profitable and, if so, how to unlock it. A comparison is made between Northland and Waikato to highlight the risks of beekeeping in Northland and determine the key focus areas that can reduce these risks and deliver profitability.

Using the data provided in MPI’s Apiculture Monitoring Reports from June 2008 to June 2018, it is clear that a ~12% net profit before tax was achieved during these ten years in Northland. At ~12%, this profitability is exposed to significant downward pressure due to overstocking of beehives in the region and unsettled weather.

The findings from this study suggest that Northland beekeepers can improve this profitability to greater than 20% consistently over the long term by doing the following:

• Reducing beehive stocking rate in the region to one beehive per one and a half hectares of Manuka resource.
• Stop boundary stacking beehives to reduce poaching of Manuka nectar from neighbouring properties and so reduce the overall land royalty payment per beekeeper.
• Securing good wintering apiary sites to protect beehives from Karaka and Kowhai poisoning will ensure the healthiest bee colonies are placed into Manuka honey production.
• As Northland beekeepers experience an increase in operational cost related to the extended honey season, caused by warmer weather conditions year-round, producing the highest $/Kg Manuka honey is critical.
• An average of 18 kg of honey per beehive is the NEW expected yield per beehive in Northland, and of this 18 kg, only 9 kg would pass as mono-floral Manuka honey. Therefore, the beekeeper must ensure this Manuka honey has a minimum dollar value of $50/kg to ensure profitability year on year.
• The Northland beekeeper requires a mobile beekeeping operation that allows for beehives to be moved to Central North Island to make a second Manuka honey crop to increase profitability to over 30% in an average honey season.

There is profitability in Northland beekeeping; however, it requires the beekeeper to change from the old methods of beekeeping and ensuring all mono-floral Manuka honey is isolated to capture all the dollar value available. In doing so, the profitability of greater than 20% is achievable for a Northland commercial beekeeping business.

Sheep and beef farms are home to a quarter of New Zealand’s total national native vegetation. This means that sheep and beef property owners make up the second largest native biodiversity land holders, second only to Public Conservation land. As such, a large part of New Zealand’s conservation effort is in their hands.

Many landowners have already taken steps to protect and enhance their slice of native bush. With appreciation for what has already been achieved it encourages more progress to be made by that person and those around them.
By nurturing this connection to the land and amplifying it through our communities we are more likely to gain long term biodiversity gains. Enhancing a culture of kaitiakitanga, guardianship or feelings of being stewards of the land.

This report endeavours to discover:

The quality of the biodiversity held within the bush blocks on New Zealand sheep and beef farms.

What challenges native vegetation faces in these blocks and how best to maintain and/or improve these areas.

Recommendations

1. Manage

Where landowners’ resources are limited a pest control management regime implementation would be a cost-effective use of capital that will produce the fastest benefits. Also changes to stock grazing practices have the potential to slow deterioration until fencing can be put in place.

The problem of funding the conservation efforts around the native bush on farms needs to be quickly addressed. This could be as simple as ensuring the carbon credits of these areas are financially recognised. With an inbuilt incentive to have them fenced off within the first 5years of this financial recognition. This would enable the conservation efforts of landowners to be more easily financed, thus ensuring ongoing pest control and maintenance of these areas.

2. Lead

We need to identify potential leaders who can pass on their knowledge, learnings and techniques to others. This would be best done with a framework in place that helps ensure these leaders are supported. This will help foster a collaborative approach to ensure biodiversity gains.

3. Research

I feel research into stocks role in conservation and how grazing could help enable native regeneration is needed to establish if there are any positive effects as the Allison H.V.A survey and Longlands case study suggests there may be. This would help to decisively answer the stock exclusion argument.

The need for all the ecological significance assessments to be presented in the same way in the H.V.A surveys is a great missed opportunity. I feel that being able to successfully compare and contrast this information over a long period of time would give clarity to how native vegetation is tracking in comparison to where it started from. This would give clearer indications to how our management practices are affecting native vegetation.

The High Value Area surveys are a great source of information. However, I feel they would benefit from having more information about the options for the H.V.A, such as QE11 covenants and a list of potential funding grants that are available to help landowners with the ongoing protection of these areas.

In today’s society there remains a stigma around money and finances, possibly originating from a fear and lack of understanding, and historically this has been thought to have hindered farmers’ ability and willingness to take control of their farming operations without understanding what the figures mean for their business.

In an ever-changing world of requirements for freshwater management, biodiversity and climate change policy changes, biosecurity threats, volatile markets due to societal trends and economic fluctuations – a profitable business and a solid balance sheet is crucial in today’s farming operations in order to be prepared for anything. Due to the numerous industry pressures that farmers are faced with, it is important to have a solid foundation of financial literacy and business management skills to complement the practical, industry specific skills in the Food and Fibre industry in order to run a profitable farming business. 

Financial literacy generally is weak for many farmers (Speight, 2018), therefore financial literacy is a crucial element in farmer training in order to pave the way for increases in productivity, income and profitability and improved livelihoods (Musungwini, 2018). The benefits of this financial knowledge and improved livelihoods will overflow into our rural communities, leading to improved mental health in our farmers and collectively contributing to a positive future for generations to come.

Farmers running their day to day farming operations, most being defined as ‘small sized businesses’ in NZ, should be running their farming operations as a ‘business’ and farmers should be treated like business owners. This means structuring farming operations like a business, with a Trusted Team around them for support and guidance, coupled with being highly skilled in areas across the board in finance and business management. This will allow farming operations to effectively plan for the future, striving to meet performance goals and being in a position to make well informed decisions at any point in time.

With the aim of helping farmers by steering them in the right direction on their journey of improving their financial and business management capabilities, this report identifies the specific areas that require focus in order for farmers to competently and confidently run their farming operations like a business. It is essential that the farming operation and farmer’s benefit is front of mind throughout the up-skilling process as this will allow control of the business operations and finances back in the farmer’s hands which will hopefully be met with willingness and curiosity from the farmer.

The benefits and value of the farmer taking control over the finances will be a turning point in the industry and confidence will be gained by the farmers to harness their new skills and take the reins of the direction of their farming operations into the future. It is evident there are a number of barriers to farmers’ willingness and ability to up-skill in their financial and business management skills. These are; cost, lack of time, resistance to change and failing to see the value benefit of what these skills could create for them and their farming business. The overarching theme within the suggested approach to improve farmers’ financial and business management capability is the need to navigate potential barriers mindfully and tailor individual farmer’s needs specifically to each farmer. This will assist in broadening their knowledge and transitioning the control over the finances with guidance and support throughout, understanding that every farmer is different.

Through an analysis of data gathered from farmers in the field, from rural advisors in the industry and by carrying out a literature review across four main topics, it is evident there is definite room for improvement to raise the financial know-how of farmers in New Zealand. The positive impact of an improvement in this area will be key, to ensure the NZ Food and Fibre industry keeps up with changing demands and for farmers to be in a position with the skills and control to make informed decisions. This will allow farmers to ride the highs and endure the lows for many generations to come. It is evident that there are already steps being made in the right direction which has lead to an increase in knowledge over the past ten years, but there is an urgent need for this to continually improve given the uncertain times we find ourselves in, in a post Covid-19 world.

It is time to break down the stigma around finances and tap into farmers’ financial and business capabilities. Research shows there is a large web of resources available already, for example the Dairy NZ website, the Beef & Lamb NZ website and the work that the Agri-Womens Development Trust (AWDT) is doing, for example facilitating the Understanding Your Farming Business (UYFB) course for farming women. There is a need to bring out farmers’ willingness and curiosity to learn and take control of their business, which when combined with adequate and relevant training via tutors or mentors will result in a higher level of knowledge across the board. The outcome will be improved confidence in our farm operators and farmers will witness first-hand the value and reap the benefits of what having strong financial and business management skills and control over their financials could create for them.

A recommendation that would hugely benefit farmers is introducing an on-farm tutor or mentor initiative to boost confidence in their financial and business capability by educating farmers step by step through what they can do to be involved in their financial and business management. When farmers are confident in completing financial tasks efficiently themselves, using suitable farm finance software and with adequate training, they will gain control over the financials and be better poised to influence and execute effective business planning and strategic discussions. This entire package will be crucial for farmers to be up to speed at any point in time, with the knowledge to make informed decisions, the skills to implement these with a supportive and trusted team behind them and the confidence to put their best foot forward when seeking finance for business growth.

The global perspective on investment is changing from traditional financial metrics to the relatively recent idea of “impact investing”. This is where investments are made with the objectives of creating a positive impact on environmental and social matters as well as receiving financial returns. The growth in this movement has raised questions on whether there is potential within New Zealand’s horticultural industry to market its perceived sustainability and therefore access this pool of capital. With this theory in mind, this report looks to quantify the sustainability of the sector as well as analysing the ability of the investment sector in New Zealand to take advantage of impact investing theory.

To achieve this aim, this study uses an analytical framework to measure the carbon footprint of orchards and vineyards as a proxy for environmental sustainability. The model uses a case study of six different orchards and vineyards, owned by Craigmore Sustainables, to get an understanding of the variability within the sector. In addition to the carbon footprint modelling, four informal interviews of leading New Zealand primary industry investment managers and large-scale corporate farmers and foresters were performed to get an understanding of the extent to which the primary industry and its investors are concerned and report on sustainability.

Using the purpose-built carbon model, the producing orchards and vineyards were shown to have a net positive impact on the environment through large sequestration by the plants and compost. The two developing apple and kiwifruit orchards were shown to have comparatively high net emissions in their early years. It was shown that there is significant variation in the sequestration potential of different crop types (apples have the greatest potential sequestration per ha). In addition, the impact of organics was tested across the kiwifruit orchards with organic management producing less emissions overall than a conventional orchard.

Across the multiple interviews and literature reviewed, it was shown that there is significant variation in the positioning of investment funds and corporate farmers on the idea of impact investing. In general, foreign, and younger investors appeared to be further advanced in the understanding of impact investment and its opportunities. However, for the New Zealand market to fully appreciate and take advantage of impact investment opportunities that will arise in the primary industry space, there needs to be changes to the consistency and transparency of sustainability reporting and fund raising.

Although this study provides a baseline understanding of the potential sustainability of the horticultural industry, there are several recommendations that need to be considered in either further research or by leading organisations within the sector. These are:

• Where possible, the increase in establishment and use of other quantifiable sustainability metrics in addition to carbon
• Provide actual on-orchard data to test the strength and applicability of the carbon footprint modelling.

• Further research into the environmental sustainability of orchards in an intensity-based approach such as kg CO2-eq per tray produced or per $

In addition, there are also recommendations for the industry’s investment sector to capture the possibilities of the impact investment movement:

• To increase the measurement and reporting of the sustainability of the industry and therefore utilise the existing foreign impact investment interest as well as being prepared for when the domestic New Zealand investor base ultimately increase their focus on impact investment.
• For the industry to either create a universal accredited standard of reporting and measurement for sustainability of a business or to align itself to current global reporting standards and initiatives.

These recommendations will help to increase investor confidence in the industry and therefore increase the potential uptake of the opportunity for impact investment.