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Science communication – Responsibility and integrity in New Zealand’s primary sector

Executive Summary

High quality agricultural science underpins New Zealand’s primary sector, economy, rural communities, and wider society. The science capability of New Zealand’s agricultural sector is largely responsible for our competitive advantage in the global food market. The ability to produce safe, healthy food is highly dependent on robust science, technology, and innovation. NZ agricultural scientists do an outstanding job of translating their research to farmers. This can be measured through the productivity gains we have seen over the past few decades in pastoral farming systems.
There is a disconnection of the public’s understanding of what happens to our food and fibre, through the supply chain, from pasture to plate. The objective of this research was to understand how New Zealand’s primary industry can communicate the importance of agricultural science more effectively to the New Zealand public, and who should be responsible for doing this. Understanding how the rural community views current government support for agricultural science and science funding is also important. The aim here is to determine how best to ensure that there is a better appreciation of the value of agricultural science to New Zealand’s bioeconomy.
Fifteen semi-formal interviews were undertaken with farmers, industry personnel and scientists who work, or have worked, in the public and/or private sectors. Key themes were identified for discussion through thematic analysis. Qualitative data was labelled, collated, and reviewed to identify patterns with a shared meaning.
There were several key findings from this research. Firstly, the research suggests that our primary industry does not communicate our agricultural science effectively to the New Zealand public. The link between the science community and the public need improving to ensure science messages are understood by the urban community. The primary sector needs to communicate simple, consistent messages, which are objective, fact based, and are packaged to resonate with the public and support strong story telling. To find some common ground with our urban counterparts, we need to outline the health, social and environmental impacts of our products, and align this to their values and beliefs. As well as providing information to help people understand the ‘why’ about our different farming practises.
Respondents’ views were divided over who is responsible for agricultural science communication. Some thought scientists, industry, and farmers should individually be responsible – but a collective co-ordinated effort is required. It was evident the primary industry would benefit from having more Honest Brokers (Pielke Jr, 2007) to communicate our messages to society. Honest Brokers are trusted scientists who engage with the public and can provide a wide scope of information to help the receiver make a well-informed evidence-based decision.
A pattern emerged that agricultural science needs political leadership, without politicising the science content. Policy makers need better connection with farmers to understand how farm systems operate. Respondents were of the opinion that central government does not support the primary sector enough through science investment and that the current funding model is not working. Given the importance of agricultural science and innovation to the New Zealand economy and society, this should be a central focus for our government to address.
There is an opportunity for a national conversation about targeted science communication. Several recommendations were drawn from this research. Given the link is missing for scientists to communicate agricultural science to the public, a strategy needs to be built to get agricultural science into mainstream
media. This requires a collective working group with individuals from different areas of the industry supply chain, scientists, media, as well as central government. MPI and CRI’s could also develop specialist communication units to transfer science messages to the wider public, not just to farmers, academics, and stakeholders. A further proposal was that the primary industry needs more government support, through funding for agricultural science and a revamp of the current funding system.
The recommendations could start with The Royal Society or the New Zealand Institute of Agricultural and Horticultural Science (NZIAHS), working in conjunction with selected Honest Brokers and the primary industry to have a national conversation on effective science communication. Central government’s influence, with a top-down approach, can also have a positive flow on effect, where society sees the value of our industry and especially our agricultural science capability.

Read the full report:

Morris, Nicole_Science Communication

 

 

THE BOTTOM LINE! ARE FARMERS/GROWERS BEING RECOGNISED FOR MAKING CHANGE?

Executive Summary

In the Farmer/Grower Survey (2021) a grower argued that the reason for any change is to make sure their business can remain sustainable. Change needs to be motivated by a sustainable business model, which means resilience and being able to adapt to a changing environment (Viticulture A, F/G Survey, January 29, 2021). This changing environment is occurring fast, how we respond to topical issues will be the driver of change in the discerning consumer market. The “Fit for a Better World” document describes the way we respond to climate, freshwater and biodiversity will define us as a sector and as a generation. Consumers and customers will judge us by it, and so too will our grandchildren (Primary Sector Council, 2020).
There is a rising consumer awareness on how and where their food is produced. What effect has this food had on the environment? What conditions are those producing the food and fibre working in? These questions continue to evolve, meaning we as food and fibre producers need to be able to adapt and prove our credentials. This raised awareness affects market access requirements, documentation and the changes we need to implement if we wish to be a premium product producer.
This movement from volume to value is an acceptable concept and one New Zealand is in a prime position to take advantage of. The ‘triple bottom line’ presents the idea for sustainability to be achieved by a combination of three groups: people, planet, and profit. Are New Zealand’s primary industries asking our farmers and growers for too much focus on the pillars of people and planet? The risk to having a lopsided focus on people and planet issues is that those actions may outweigh the third pillar of profit, thus sustainability being compromised. The importance of a sustainable and resilient business model is key to our success in capturing the value opportunity.
This report aims to raise awareness of the importance of having a balanced and supportive approach to change. Making change can be separated into three buckets: imposed, collaborative, and change by choice. The clear difference in the change buckets comes through the perception of having control. Being in complete control is found in the change by choice bucket. Collaborative change retains a semblance of control (even if it’s not the farmer/grower’s choice), making it easier to navigate. The toughest version of change is imposed change, where the farmer/grower has little control nor collaboration. The perception of increased imposed change for NZ farmers/growers is something the primary industries need to be wary of, given the effect this change type has on mindset and profitability.
Sustainability is across all things – whether it relates to people, the environment or economics. I wanted to understand the points of view of our farmers and growers to see why/how they are currently making changes in their business and if they are ready for the continuation of change. To be truly sustainable, primary businesses need to create a model that provides a level of profit that can be reinvested back into their business.
This is an important study for the primary sector to understand how it can be best promote change within industries. If the change comes at a cost to work such as infrastructure upgrades, yield loss through the change of inputs or staff wage increases, when is it the right time to implement change? Have different regional variances, farm types, planning, and work that has already been started but may not be written down, been considered? We need our changes captured so we can realise the value opportunity.
This report included both a literature review and a qualitative approach through a series of semi-structured interviews. I have analysed the themes, common messages from both the interviews and the literature to provoke further insight and discussion.
The incentives for farmers and growers are recognised as three different buckets, which can be generalised as a commodity producer, a niche/premium market, and someone seeking a premium through trading on their ethically produced products. The New Zealand primary industries have producers in each of these buckets. Considered change is needed for each incentive bucket, so the farmer and grower are being recognised for the change required.
An area I have seen as being overlooked is that change is a human problem! From one farmer to another, the way they would cope with change is different. Kubler-Ross change curve model (Elizabeth Kubler-Ross Foundation, n.d.) is very useful to identify and understand how people deal with change. The emotions linked to the seven stages can be a useful tool to identify where an individual may be with the state of change and how to transition through to the integration of change intended.
Change that is sought by the consumer, the market, government, or the individual farmer and grower, means an understanding of the producer’s readiness and support for change. In this study, I explored examples from the survey participants of actions that were imposed change, change by choice, and change by collaboration. What was evident was that the farmers and growers are already engaged with change and they believe in constant improvement with their operations.
I found that farmers/growers feel they are mostly ready for making change and more ready than their neighbours’, and those sectors they are participating in, also more ready than the New Zealand primary industries as a whole. The areas of opportunity and challenge discussed by the survey group also had an alignment to that of the priority actions captured in the KPMG Agribusiness Agenda. As I discovered during this study, the shift to a general understanding from New Zealand farmers/growers is that they need to better represent themselves to the concerning consumer. The challenge is not the why? But to articulate and prove our credentials to those consumers.
With a common problem across all primary industries, the need for strong and clear leadership is evident. A shift in power from being government lead to a more collaborative approach is needed to achieve better outcomes for the primary sector. Sharing a joint vision of Te Taiao (English translation: the natural world, environment) means we can have more responsibility being held in the hands of those best positioned to engage, enable, develop and implement the change needed.
My recommendations are:
• To achieve the vision and strategy of “Fit for a Better World”, we need leadership to not only verbally accept the document. Leadership needs to be visible by having a Primary Sector Council structure and governance that has both the sector and government working together.
• Our farmers and growers will need further support with Farm Environment Plans so that the entire primary sector can benefit from raising the standard of reporting. The government needs to see this as a necessary investment in making the shift towards achieving price premiums. Engaged farmers and growers should be backed by a trusted Farm Assurance Programme to brand New Zealand premium products to the export markets.
• Change is a human problem, so messaging and support is critically important to those both implementing and being affected by change. Seeing farmers/growers are already contributing so much towards change. I believe those that have an increased capacity to better support are both media and the government. The role they have to play in changing the narrative and funding the support services to the rural sector.

Read the full report:

Milne, Bryan_The Bottom Line – Are farmers growers being recognised for making change

Bryan Milne, Kellogg Course 42, 2021

 

What is the true cost of transience to the New Zealand dairy industry?

Executive Summary

This report investigates whether the dairy industry has an issue with labour transience and what it truly cost a business to lose and retrain a new employee. I needed to firstly find out If, when, where and how transience has become a problem in the dairy industry. Then what it truly cost a dairy farm to lose and replace an employee. Finally, I investigated the reasons people were leaving a job and was it preventable.

There were two parts to this research project 1) a literature review and 2) a survey of 23 dairy farmers to see what they thought about the cost of transience in the dairy industry.

The key findings of the literature review were:

  • New Zealand dairy farms have changed drastically throughout the last 29 years in size. They have increased in average area from 220ha to 372ha,herd size has over doubled from 170 cows to 440 cows, and production has increased from 250kgms/cow to 385kgms/cow. Resulting in more labour being required on farm.
  • The dairy industry has similar transience to all other industries in New Zealand. This means that transience is a big issue for the whole of New Zealand not just the dairy industry.
  • 1% of a dairy farms budget is from labour costs.
  • The average dairy business has quintupled its farm debt in the last 28 years.
  • Dairy farmers are working 11 hours/week longer on average than the country’s 2.7 million people work force.
  • It takes a lot of time and effort to replace an employee.
  • Inducting an employee is costly and time consuming. It takes up to 2 years to fully induct an employee to the same as where the previous person employed was, depending on the level of experience of the position. Costs involved are not only the cost of off farm training such as ITO, but also the cost of time taken from other employees/manager/owner’s day, to train/oversee the inductee until they are competent at the tasks at hand.
  • It varies on how much it costs to lose an employee depending on experience lost. 30% – 200%. There is big difference in losing an assistant position to losing a second in charge or manager. A more senior role can more easily fill in for an assistant role as they already know the job. But an assistant cannot help with 2ic role, because they have not learnt the knowledge of things like farm walks, feed budgeting etc.
  • Working on a baseline of the cost of transience. You are looking at least 30% of the persons annual salary cost to your business for one person’s turnover.
  • Not all the cost of transience is monetary. Working longer hours, the stress of filling the skill gap lost, loss of sleep worrying how to get through until a new team member can be found and trained. These do not cost the business directly monetarily, but they are very costly to the rest of a team, family and individual.
  • 7 out of 10 reasons people leaving a job could have been prevented. They are:
    • Career development – this has been the number one category for 10 straight years. Employees who are satisfied with their development are likely to stay.
    • Work-life balance – this was up 23% since 2013. Flexibility of the job, long shifts, and suitability of hours
    • Manager behaviour – General behaviour and communication have each increased (gotten worse) in the last year.
    • Job characteristics – this was the number one rising category of turnover, up 117% since 2013.
    • Well-being – to promote work-life balance consider flexitime and telecommuting, assistance with childcare/eldercare, financial counselling, and flexible leave options.
    • Compensation and benefits – many think compensation is the reason for turnover. Sometimes it is and sometimes it is not. Find out the real reasons for turnover in your organisation. 
    • Work environment – applicant selection assessments and interviewing must include person-environment and person-culture fit as company culture becomes increasingly important.
  • Preventable reasons for turnover equate to 78% of our transience if we could solve this it would change our turnover rates from 24.5% down to 5.5%. This would be an astonishing change to our businesses.

 The key findings from the survey were:

  • 96% of dairy farmers surveyed agree transience is a cost and there is a problem.
  • 70% surveyed believe it costs their business up to $20,000 to replace a staff member. Reasons stated were from loss of productivity, induction, and training costs to get the new employee up to the same level, advertising costs and the loss of time, selection and interviewing of potential candidates.
  • It takes a lot of time and effort to replace an employee.
  • That the respondents thought most of the costs for employing a new employee was in induction and training costs.
  • 5% of the respondents thought it takes at least a couple of months to induct a new employee.
  • There was no clear trend for transience from respondents.
  • 95% of the respondents indicated that they worked over 40 hours per week.
  • The reasons for people leaving a job were Lack of support, long hours, pay not good enough and management not treating them well.
  • There were three main themes for why people stayed on farm they were good culture, Good employer, progression, fair remuneration package.
  • The results from the survey did not vary to much from the position held. Be it owner, manager, share-milker, or employee.

The main conclusions of this research project were:

  • Transience has become worse because the dynamics of dairy farms have changed drastically throughout the years, with increased farm size, resulting in the need for more labour on the farm.
  • Dairy farm turnover rates on average are relativity the same as the national average.
  • That transience is costing a considerable amount both in the way of money and stress, fatigue and over work to a dairy farm business.
  • Three quarters of transience can be prevented. Which would result in considerable savings to a business turning over employees.

    Recommendations:

Turning over employees is costing dairy farming business and most of the reasons they are leaving are preventable. To capture the benefits of retention each farm needs to understand why people are leaving their farming business. Each farm needs to analyse the environment they provide for their people. Is the farm inclusive, asking their people what they want in the workplace and driving it from their needs and wants? 

Next steps for the dairy farm employer:

  • Become clear why your people are leaving – remember that on an exit interview they may not give you a clear explanation.
  • Become clear on why your people are staying – what are some strengths?
  • Identify what you are doing to prevent people from leaving your business – ask yourself would you like the same working environment?
  • Look at the history of employment on farm, is there a pattern? Could some turnovers have been prevented? Was this in your control to prevent?

Next steps for industry:

  • Identify good employers in industry who have a high retention rate and showcase these.
  • What are they actively doing to prevent turnover? Can strategies be created and adopted?
  • Focus on the intangible as well as tangible drivers – people are human beings not doings.
  • Commitment five is far reaching and will need engagement at all levels to become real. It will only be driven by those employers who see the benefit in looking deeper into their own behaviour and environment they provide on farm.

Read the full report:

The true cost of transience

 Brent Miller, Kellogg Course 42, 2021

 

Industry Perceptions of the Role of Soil Carbon in Farm Greenhouse Gas Emissions

Executive Summary

Internationally increasing soil carbon in agricultural soils has the potential to offset greenhouse gas emissions. This project evaluates the role of soil carbon in relation to farm greenhouse gas emissions in New Zealand. Agricultural soils in NZ have naturally higher levels of carbon than those overseas because they are typically younger and our practices include more restorative pasture and animal phases. Therefore we may not be able to increase soil carbon in the same way as international studies suggest.
The aim of this project was to examine the role of soil carbon in NZ and in relation to farm greenhouse gas emissions and policy. Key groups industry stakeholders were identified and interviewed. From the results themes were identified and analysed to answer the study questions.
The key learnings of this project were:
● It is unlikely that soil carbon will play a role in the offsetting of greenhouse gas emissions in New Zealand agriculture because levels on farms are already high.
● The complexity of including soil carbon in an emission scheme could be inaccurate and lead to unwarranted costs for farmers.
● It is more important that farmers focus on retaining and avoiding losses of soil carbon.
● Soil carbon contributes to soil health by improving soil physical properties such as water and nutrient holding capacities.
● More research is needed on soil carbon in NZ, where it is practical to increase it and how.
● Farms are businesses and need emissions reduction solutions that are going to be both practical and ensure that their businesses remain financially viable.
The recommendations from this project are that:
● More research be done on management practices that could increase soil carbon.
● Information be presented to farmers on the benefits of soil carbon.
● Tools be made available so that farmers can compare the effect of different practices on soil carbon.
● Farmers need help to better understand their greenhouse gas emissions and a range of solutions on how to reduce them.
● The industry and the broader society need to support farmers as they adapt their businesses to account for and reduce emissions.

Read the full report:
Industry Perceptions of the Role of Soil Carbon in Farm Greenhouse Gas Emissions

Nicole Mesman  Kellogg Course 42, 2021

 

How well farmers understand their finances? Looking at the implications of low levels of financial literacy

Executive Summary

Agriculture is a turbulent industry with many variables and challenges affecting different businesses throughout New Zealand. This is not new but more pressure is building to challenge one’s social license to farm, being added compliance through environmental management and climate change policies. A resilient business will overcome these challenges and be well positioned to drive direction and the strategy going forward. With current high commodity prices and low interest rates, many farmers will still struggle to be profitable, limiting their ability to access capital and restricting any opportunities for growth and the next generation. Financial literacy has a significant impact on one’s business and its profitability.
The purpose of this report is to understand the current level of financial literacy within farming agricultural sector, be it, horticulture, arable, dairy, sheep and beef sectors. It is important to measure the current level of financial acumen to understand what the barriers are impacting one’s ability to upskill, and what the implications are to farmers and their wider support networks. From understanding the barriers and implications we can then conclude with recommendations to where and how farmers, rural professionals, industry-good organisations, software providers and government bodies can help improve and upskill one’s financial literacy to create resilient businesses and a stronger economy.
In order to measure the current level of financial literacy there were two elements to the research, a survey questionnaire was undertaken interviewing farmers within four agricultural sectors along with rural professionals over similar industries. A review of historical research included industry reports and articles of relevance. The findings were compared and contrasted against the surveyed findings. Once the surveyed data was collected, a thematic analysis method was used to analyse the qualitative data. Themes that emerged became the barriers and implications within this report.
Financial literacy has shown to have only improved by 15% over the past 12 years in the sheep and beef sector. This against all measured sectors demonstrates that sheep and beef farmers continue to have the weakest financial acumen. Over all sectors, 40% of businesses are what I would call “flying blind”, with no insights regarding their current financial state or year-end 2021 performance. A further half of all businesses have no formal plan or strategy in place to direct/govern their business appropriately.
It was obvious very early within the survey that a lack of financial planning and forecasting was prevalent, the larger the variables, the weaker one’s financial literacy. For example, only 50% of sheep and beef farmers complete planning and forecasting, with many variables impacting their production and performance.
Discussion groups were however considered to add significant value to the business. Five barriers were identified to be restricting an improvement in financial literacy, these are: time, technology, education, training and rural professional support. Education is deemed the only uncontrollable factor and this has been identified by some survey respondents as being their “biggest concern”. Part of their concern is having no compulsory personal and financial management courses in the school curriculum, and their staff having weak financial acumen, such as “spending their pay cheque before they have earn ’t it’. A further concern identified is weak rural professional support with lack of honest feedback, a rural professional quoted “you can kill people with kindness”.
While these barriers restrict financial literacy and awareness, they not only impact the farmers but their supporting networks as well. Many implications were identified with profitability being the biggest impact to farmers, rural professionals, rural communities and New Zealand’s economy. Further implications include financial wellbeing; impacting health and the number of young farmers coming through into the industry. Constant rural professional changes and lack of capacity, impacts on the level of trust within the rural professional network and an organisation.
The key to creating high levels of financial literacy within a person and business is having trust; trust in themselves and trust in their network team. To gain trust people must be willing to learn and play the infinite game. “The infinite game, a game where players come and they go, there are no winners or losers, only being ahead and behind with no defined endpoint” (Simon Sinek 2019).
New Zealand farmers are known by their “do it yourself” mentality but now more than ever, farmers need to utilise or build their trusted team to create resilient businesses in times of increasing regulations and compliance. To enable this farmers must be willing to move out of their comfort zone and value their time using the $25-$100-$1,000 concept. This concept helps identify that being on farm completing day to day jobs is replaceable by staff at $25/hr. Management decisions are valued at $100/hr, whereas being prepared to strategize and plan the business direction is worth $1,000/hr. At $1,000/hr, million dollar decisions can and will be made.
Working on their business rather than in it, and seeking a second opinion will result in further insights, which ultimately impact decisions and outcomes. Farmers must also look after themselves and their financial wellbeing along with supporting the next generation with their financial skills and involve them in strategic decisions. “Empowering individuals with the knowledge of financial literacy will have a dramatic impact on societies and entire nations. The impact of financial literacy can no longer be ignored. It is up to policy makers, educators and people with sufficient private equity, to make financial literacy a priority in our society. As awareness spreads and people make their voices heard, the impact of this skill set will no longer be overlooked. Education in financial literacy will become ubiquitous and these critical life skills will become the norm. The positive impact of financial literacy is undeniable and the sooner this movement spreads, the better off everyone will be” (financial educators council).

Read the full report:
McHutchon, Michael_Understanding your business

Michael McHutchon,  Kellogg Course 42, 2021

 

A Business Case for Integrating a Hazelnut Orchard into an Existing Arable Farm

Executive Summary

The New Zealand arable farming industry faces a number of issues as it attempts to remain profitable in a world of increasing public scrutiny and environmental regulation.
This report investigates whether the integration of a hazelnut orchard into an existing Canterbury arable farm could provide:
• A profitable alternative to other common arable crops;
• A lower nitrate-N leaching profile than other common arable crops thereby bringing down the overall
leaching profile of a farm; and,
• An opportunity to sequester carbon on-farm in order to offset the charges associated with agricultural greenhouse gas emissions that will be in place from 2025 onwards.
The New Zealand hazelnut industry is small but has an enthusiastic grower base. Approximately 400ha of hazelnuts are planted across New Zealand. Production and profitability from these orchards has been low when compared to international production and when compared to New Zealand trial data. Low production and profitability are likely due to the choice of the high quality but low yielding cultivar ‘Whiteheart’ in the majority of New Zealand hazelnut orchards.
Internationally, gross margin returns from well-managed hazelnut orchards can be in excess of $5,000/ha.
New cultivars that have been bred internationally such as ‘Jefferson’ show significant promise in terms of high yield and nut quality. If international production can be replicated in New Zealand then hazelnuts offer a significantly higher gross margin than most common arable crops. Modelling has shown that income from a hazelnut orchard is highly sensitive to both price and yields, however a gross margin of $4,375/ha can be achieved after 12 years. The NPV and IRR of a hazelnut orchard are calculated to be $10,987/ha and 10% respectively.
There is a widely held view by the public and Central Government that excessive nitrate-N leaching and the subsequent pollution of freshwater are no longer acceptable. Hazelnuts use low quantities of nitrogen fertiliser when compared to most common arable crops. The average Canterbury arable farm leaches approximately 50kgN/ha/yr. Modelling in Overseer shows a hazelnut orchard may leach approximately 7kgN/ha/yr. This makes hazelnuts an appealing option especially in catchments where nitrate-N leaching is capped or where reductions have been mandated by regional councils.
The He Waka Eke Noa climate agreement which was established in 2019 will introduce a pricing mechanism for agricultural greenhouse gas emissions by 2025. This mechanism will likely allow for emissions to be offset by on-farm carbon sequestration and planting of orchards may be an allowable component of this agreement.
Using ETS pricing as a proxy tool, this report calculated the approximate income (in the form of a cost offset) that a hazelnut orchard could provide to an arable farmer. The result being that the carbon income from a
hazelnut orchard would be negligible ($5-$50/ha/yr) and therefore the offsetting of greenhouse gas emissions would not be a reason for planting a hazelnut orchard.
Planting an orchard is a significant commitment, particularly in terms of opportunity cost, as the success of the orchard will not be able to be determined until at least 10 years after establishment. For this reason, farmers need robust data to ensure they are making a well-informed decision. Therefore, it is recommended that further research is conducted in the following areas:
• Optimum fertiliser quantities and timings;
• Actual yields that are currently being achieved in New Zealand; and,
• How higher yielding international varieties perform at scale in New Zealand soils and in the New
Zealand climate.

Read the full report:
Lilley, George_A Business Case for Integrating a Hazelnut Orchard…

George Lilley,  Kellogg Course 42, 2021

UNTAPPED POTENTIAL: OPPORTUNITIES AND CHALLENGES FOR WATER STORAGE IN NEW ZEALAND.

Executive Summary

Water is set to become the defining issue of the twenty-first century. As global populations continue to rise and the impacts of climate change become more acute, our freshwater resources will increasingly come under pressure.

As demand begins to exceed supply access to water, or a lack thereof, will likely lead to increased social and political instability and tensions between neighbouring countries – particularly when there is a shared water resource involved.

Although New Zealand is unlikely to face some of the more extreme challenges that will arise globally, we will still have our own unique issues to overcome as a country. Already we are beginning to feel the impacts of a changing climate with more extreme weather patterns.

In 2020 much of the country experienced what many described as the worst drought on record. The issue is, this drought was not the only catastrophic drought in living memory – in fact, it wasn’t even the only catastrophic drought to hit New Zealand in the past decade. Only seven years earlier we had experienced similar scenes across much of the country.

At face value it may seem like New Zealand is running out of water, but to say water is running out of New Zealand would be closer to the truth. We have more than enough freshwater resources to meet all of our needs, we just fail to capture them for efficient, sustainable, strategic, and productive use.

We are fortunate to live in one of the most water abundant countries in the world by almost any measure: precipitation per year (43rd), water per square kilometre of land (18th), or water per head of population (7th). New Zealand has approximately 440,000 million cubic metres available for our use each year. The problem is we only capture around 3% of it for productive use. The rest makes its way down our network of rivers and flows out to sea.

As a country we receive more than our ‘fair share’ from the global endowment of freshwater and I would argue that that brings with it an obligation to use that water efficiently not only for our own benefit, but for the benefit of others on the planet.

The impacts of climate change are only going to continue to get worse with higher temperatures, longer droughts, and more extreme rainfall. We won’t get enough water when we need it, and we will get too much when we don’t. This only strengthens the case for capturing the water while we can and storing it for when we need it.

Increased water storage will bring with it other benefits like increased hydro capacity. While some of our larger hydro damns have considerable storage capacity e.g., Benmore, Clyde, and Manapouri, we actually have a relatively small storage capacity of 4TWh vs annual inflows of 24TWh.

It will also open up the possibility of increased land use flexibility that may reduce some of our current environmental pressure like methane and nitrates and allow some landowners to transition to a land use that will give them greater returns per hectare. This is particularly true in Northland where we have an opportunity to ease economic deprivation by harnessing their existing soils and climate.

The opportunities are significant but before we can unlock our untapped potential, we do have some challenges that we will need to collectively overcome: a lack of an overarching national water storage strategy, political uncertainty, financial barriers, an unfounded fear of dairy intensification, and the ever-present question of Māori rights and interests in water.

Read the full report:
Letcher, Aaron_Untapped Potential

Aaron Letcher,  Kellogg Course 42, 2021

Understanding strategic alliances and their role in New Zealand agriculture

Executive Summary

New Zealand companies that export goods face the challenges of seeking cost effective ways to overcome the disadvantages of a small domestic market, the high cost of domestic production, stringent regulations and compliance, and the geographical distance to major markets. One approach to respond to this challenging environment is business collaboration, using strategic alliances.
Strategic alliances need to comply with the commerce act however and avoid anti-competitive behaviour.
The purpose of this report is to investigate three key areas regarding strategic alliances:
1. Explore the benefits and risks associated with alliance relationships
2. Understand how to implement and maintain a strategic alliance
3. Investigate the current use of strategic alliances in the agriculture industry and the appetite for more collaboration
The methodology used for this report includes a literature review and a qualitative approach was conducted using interviews with industry leaders. The responses from the interviews were categorised and key trends identified. This allowed me to draw recommendations and identify key actions.
International research has shown the use of strategic alliances are increasing rapidly. The intention of a strategic alliance has typically centred around growth, sharing resources, extending reach, access to information / knowledge, and to enhance a product. However, strategic alliances need to be approached with caution as numerous studies indicate that 50% of all strategic alliances will underperform, and 30% will fail outright. Poor execution is responsible for 86% of all failed alliances. The findings in this report indicate there are enormous opportunities for improving outcomes. This report identifies the crucial steps and actions required during the implementation and on-going management of a strategic alliance. Recognising and adapting to the unique characteristics of each alliance can dramatically increase the likelihood of success for everyone involved. It is my recommendation that a strategic alliance should be considered within any company growth strategy. I recommend having a check list and work through a process, with three key focus areas being: 1) Have a sound business plan 2) Have real clarity on the purpose 3) Getting the right partner
Supporting my view, 90% of industry leaders interviewed are considering a new alliance going forward. Furthermore 100% of industry leaders believe there is an opportunity for more collaboration in the industry, and agree strategic alliances are a good tool to achieve this.

Read the full report:

Understanding Strategic Alliances

Thomas Creswell, Kellogg Course 42, 2021

Alternative Proteins & the Agri-Industry

Executive Summary

New Zealand’s current protein production is dominated by meat and dairy. There are ongoing and increasingly growing challenges for sustainability, environmental limits, and pressure for greater efficiencies. Emergent and developing trends in plant-based proteins are creating movements and shifts in consumer demand and food production. Health and nutrition are influencing consumer demand more than ever, therefore the value proprositions in the food market have to meet this demand. The current alternative protein industry is still in its infancy in New Zealand with some sectors such as Hemp and Quinoa rapidly growing. However, in general, New Zealand is behind the main growth countries producing plant based protein like Canada and the Netherlands. This presents an opportunity to take learnings and develop potential collaborations, to advance New Zealand’s progression.

Throughout this study, a greater understanding was sought in the global positioning of alternative proteins and within the New Zealand context. This was then used to identify the considerations required to evaluate the importance of alternative proteins to the Agri-industry in New Zealand.
Key findings and discussion points raised are:

  • Food production needs to increase by 70% to feed the world population of 9.7 billion in 2050.
  • New Zealand has a natural bioeconomy as there is low fossil fuel use and more energy produced by renewable sources (80%) such as wind, geothermal, hydroand biomass, but New Zealand needs to move into a new bioeconomy charactarised by biotechnology and greater cross -sector thinking and actions.
  • The Fourth revolution is here and characterised by building on the Third, the digital revolution, that has been occurring since the middle of the last century. The fourth is combining human and machine where technology is embedded in our societies enabling artificial intelligence, renewable energy, 3D printing and autonomous vehicles.
  • Sustainability is key in all aspects of food production. Using the fourth revolution and utilising plant-based opportunities to create products that fill market gaps or outperforms the rest of the world will enable New Zealand to be a global leader in food production.
  • The steps that enable New Zelaand to be a global leader should concide with achieving goals in climate change (the Paris Agreement) and mitigating the affects of green house gases and the other pollution occurring like high nutrient loading in water bodies.
  • “Farmers are motivated by a diverse range of drivers  and constrained (and enabled) by a range of social, cultural, economic, and physical factors. Farmers will therefore react in different ways to external drivers of change and will respond differently to encouragement, incentives, and legislation aimed at influencing their farming practice.”

From the above findings and conclusions , the following recommendations have been suggested:

  • Keep monitoring consumer trends & food markets to increase awareness of markets and consumer change
  • Maintain and grow our reputation/ story of being food producers of high value and highly nutritious ingredients or wholefoods.
  • Leverage our competencies of current successful sectors especially as meat and dairy innovators
  • Seek expertise where knowledge or skills are low and empower people to become experts in new alternative proteins.
  • Encourage and develop coalitions with the government departments such as Ministry for Primary Industries, the Ministry for the Environment and farmers to provide incentives and/or support in areas where New Zealand can deliver the world’s best produce.
  • Reward and support leaders paving the way for the nation and their peers in agricultural and especially in new products or production that adds value to the New Zealand Agricultural Industry.
  • Develop a New Zealand plant-based food strategy for New Zealand agriculture
  • Create and develop a greater understanding and technical expertise in plant-based opportunities to enable greater diffusion of adoption to farmers.

Read the full report:
Alternative Proteins & the Agri-Industry

Helen France, Kellogg Course 41, 2020

Increasing field reps’ knowledge of grain trading

Executive Summary

“The nation must grow its people who are working across the food and fibre value chain.” (Grimmond et al., 2014).  The human capability required to meet the primary industry’s strategy for 2025 is a forecasted 4,700 increase in jobs associated with the arable industry (2012 to 2025).  It is therefore critical that as an arable industry we are prepared to grow, and our people are trained and skilled to meet our primary industry strategy.

The aim of this report is to research the development of a grain trading course for field reps, specifically targeting field reps in their first two years out on the road with the objective that it is used by agribusiness organisations.   Industry could use this research document to inspire further discussion and development on upskilling our people in arable.

The methodology included an exploratory literature review which concluded that there is a gap in arable training and development in New Zealand. I looked at overseas grain trading courses: two that stood out were the Grain Trade Australia (GTA) courses and the Kansas State University – International Grains Programme (IGP).  These courses are based in Australia and the midwestern State of Kansas in the USA where grain production is key to their economies.

I created a semi-structured questionnaire, and targeted grain traders from the arable industry with field rep staff and arable growers from the various cropping areas throughout the country.

As a result of the information gathered from the literature review and the grower and industry surveys, it is my recommendation that a grain trading course should be developed in New Zealand, with the following guidelines.

  • A course template is created that is operated from the industry body, NZGSTA, with the intention of the course operating biennially or as required. I would recommend NZGSTA act as the facilitator alongside an education provider such as Lincoln University, to run the course. 
  • The suggested course outline is for a 3-day grain trading course for field reps. Day 1, a full day, Day 2, a ½ day.  Both days are done consecutively.  Day 3, a ½ day, six months later.  Speakers with relevant experience would be brought in to present on each of the topics.
  • An elected member of the NZGSTA executive committee is appointed to oversee training and development. Personnel training and development needs to be at the forefront of our industry and any course offered, should continue to evolve and remain relevant. 
  • A customised in-house training option should be available, as we have seen with Ravensdown and their cropping course. This would potentially suit some of the larger companies with rep teams, as businesses can take on the base course content and adapt it to suit their individual company culture.  As with the above course template a service provider such as Lincoln University could run the course. 
  • From the feedback from the grower survey, “that the link the field rep holds between the firm and the farmer is most important,” my recommendation would be that the course provider identifies good growers, that are willing to be mentors, to new field reps. One farmer assigned to one rep.  The course provider communicates with the growers before Day 3, to provide constructive feedback, that can help assist individual field reps.  This is a similar concept that Primary ITO adopts, where it gets the employer to verify on-farm training. 
  • Further work needs to be done on the funding for the course. Perhaps, opportunities for industry sponsorship.  The intention is however, that the course is funded by the attendees or their employers.

Read the full report:
Increasing field reps’ knowledge of grain trading

Sarah Watson, Kellogg Course 41, 2020