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Why being true to brand New Zealand is the best option for New Zealand agriculture.

Executive Summary

We have inherited a brand. New Zealand was the last major land mass on earth to be colonised by humans, it is distant from most of the world’s population and has beautiful scenery and biodiversity. This brand is about a safe, unspoiled last paradise, or to quote a Rudyard Kipling poem: the “last, loneliest, loveliest, exquisite apart — ”. Brand New Zealand has been used for many years to sell our products and services around the world and in recent times Tourism New Zealand has built a marketing strategy around it, 100% Pure.

This study has come about because of a genuine belief that New Zealand is the greatest country to live in on earth. We are however regressing in some critical ways. The author believes we can stop the regression and build a robust and resilient economy without significant environmental loss. People are realising more and more the interconnectivity of all things on earth, human health with environmental health, our actions on environmental health and at the same time becoming globally connected within an instant by modern media. We are still perceived as clean and green by most of the world, and compared to many countries we are. Because of our position in the world, our brand and our demonstrated conservation leadership, we have a huge opportunity to leverage our economy into a higher value sustainable space that could be the envy of the rest of the world.

A Nuffield Scholarship has enabled the author to investigate this vision – including two international research tours, a study of international visitors and a survey of business and environmental leaders. It has helped him to learn, grow and gain a perspective, and now he can share what he has learnt This report studies the reasons why being true to Brand New Zealand is the best option for New Zealand agriculture. The aim of this study is to show that New Zealand, and particularly our farmers, need to be ahead of the game, stay relevant and have products in high demand in order to survive in a rapidly changing and sophisticated global marketplace. This report looks at the advantages as well as possible pitfalls this approach could entail.

The author was raised in backcountry New Zealand, travelled the world as a young man and learnt how lucky we are to live in this country. He built an eco-tourism farm in the backcountry and realised that we need to unite to look after New Zealand. Individual conservation efforts will never achieve as much as a combined and collaborative strategy will. From the world study and surveys conducted we know that New Zealand’s environment is hugely important to everyone; it is in fact the backbone of our economy.

Based on all that has been learnt or gleaned from the scholarship study, the following recommendations are made to help kiwis build a healthier, wealthier, more sustainable future:

  1. New Zealand should develop a positive and engaging environmental vision that consolidates the aspirations of multiple key industries and the public in protecting what makes us famous.
  2. New Zealand’s 100% pure image is our competitive advantage . As a nation we must strongly question any thing that is counter – productive to our brand.
  3. The world is not short of food but healthy, quality products are in demand. New Zealand must align with what the world wants.
  4. We can adopt and adapt best practices from other parts of the world. A more formal study should be completed of nations that are managing their environments well and strengthening their brands.
  5. We need strong industry leadership to build some collaborative goals between agriculture and tourism. For example Federated Farmers and Tourism Industry Association could build a co m bined strategy that is mutually beneficial to the New Zealand story.
  6. An economic shift towards value – add food and beverage production and visitor experi ences should be developed.
  7. As international tourism to New Zealand continues to grow, we need to ensure that these visitors become customers of our produce and then go onto become ambassadors telling our story on our behalf .
  8. Agriculture needs an education plan showing farmers what the affluent of the world are demanding: traceable, higher quality products with a story.
  9. Educate New Zealand to realise that complacency is the biggest threat to t he future health and prosperity of our nation. Every farm needs a conservation strategy that is being put into action.
  10. As a nation, we need to find innovative ways to increase our environmental spend by exploring more diverse sources of revenue for conserv ation.
  11. New Zealand should implement visionary conservation programmes such as Predator Free New Zealand that will demonstrate our commitment to safeguarding our natural assets and engage people from all walks of life.

In summary we have a huge opportunity to lead the world in clean green living and to leverage serious economic benefit from this. The author believes these recommendations would strengthen our brand and start steering us in the right direction to supplying affluent consumers healthy products and experiences. The world is waiting for leadership around global issues such as climate change, resource use and safety. New Zealand can do it, let’s pull our socks up!

Why being true to brand New Zealand is the best option for New Zealand Agriculture – Dan Steele

Accepting Price Volatility or Managing for Price Stability is a choice.

Executive Summary

NZ dairy farmers are directly exposed to uncertainty and fluctuations in commodity pricing. Over the past ten years external factors have had a significant impact on dairy farming businesses, leading to increased financial pressure, delayed investment plans and solvency issues.

New Zealand (NZ) dairy farmers have been left behind. Sophisticated and diverse price risk management (PRM) tools are a vailable to our competitor farmers in the USA and Europe. This will impact NZ’s industries competitive advantage on the global market in the years to come. Farmers need to be prepared with a plan and strategies to manage price risk.

PRM tools are well advanced and diverse for farmers in parts of Europe and USA compared to tools available to NZ farmers. These tools vary from simple forward fixed prices in Europe to a variety of flexible hedging tools in USA. Processors, milk marketing companies, cooperatives, and/or financial brokers provide ease of accessibility to the tools and in depth information to help farmers utilise the tools, thus providing key competitive countries with an advantage.

These PRM solutions enable farmers to transfer the price risk to someone else via a processor or a futures exchange and experience the benefits of a stable profit margin. The choice to have stable or volatile profit margins has provided some farmers with different advantages. These include enabling new farmers to enter the industry with confidence, helping some farmers to grow their businesses with certainty and others to have the ability to manage debt and achieve their goals.

The introduction of PRM tools is relatively new to the NZ dairy scene and options are not readily available. PRM is a developing area and the availability and flexibility of the tools will depend on farmers understanding of the tools, demand for the tools and adoption of PRM. Further support by the industry is essential. Areas of support include more PRM tools, risk management decision making tools, margin calculators and or information that will help farmers understand their price risk and make an informed PRM plan suitable for their individual situation.

Accepting Price Volatility or Managing for Price Stability is a choice – Satwant Singh

Navigating constraints: Primary producers coping in changing contexts.

Executive Summary

This report investigates the wide variety of ways that producers (farmers and fishers) have coped with constraints. These constraints include industry restructure, market pressures and environmental restrictions. How environmental limits have been navigated, and even utilised, is a major focus of the report since this is a current issue for New Zealand (NZ) farmers. In looking at the overseas stories and in ‘bringing it home’ to the experience of farmers in the Lake Rotorua catchment, the report explores what producers have done, how they have thought and what may be useful to them in the future.

Farming is an interaction between the individual farmer (often with family), the physical features of the farm and the wider environment it operates in. Because of the complex and adaptive nature of this farming system, a useful way of framing this report has been to use ‘resilience thinking’. Resilience is defined as a system’s capacity to respond effectively to change. Resilience thinking assumes that change is normal not unusual, and considers the adaptive capacity of the people involved with the farm system. It has also provided a useful model of responses to change–strategies of Exploit, Absorb, Adjust or Transform (EAAT) (Darnhofer et al. ,2010b). Resilience thinking allows us to view farming as a dynamic system that is shaped and re-shaped by changing contexts.

Overseas producers that have successfully coped with constraints seem to accept this inevitability of change, and are anticipating what that might mean for them as far as they can. Two major strategies for coping with a gradual ‘expected’ change pressure, such as environmental limits, are Exploit or Adjust. The first strategy is Exploit where the farm takes advantages of successful existing activities to compensate for the stress in other aspects, – adaptation is thus marginal. Farmers that successfully respond with Exploit often drive efficiency in their operation and/or increase scale; they have a clear understanding of what their resources are and how best to use them. The second strategy is Adjust. Here the disturbance requires more adaptation of farming – maybe new production methods, new products, on-farm processing, etc. Both Exploit and Adjust farming strategies employ excellent business management, have a range of networks from which to glean new ideas and consciously adapt farming practices to reduce impact on the environment (and often to otherwise respect what non-farming people consider important). Farmers who have successfully made more adaptations in their farming business have experimented or diversified – both to test options and to provide a ‘broader base’ to their business. These farmers also recognise the importance of their own relational skills. Final aspects of successful adaptation using an Adjust strategy involve farmers choosing actions that mesh well with their values and that in some way satisfy their identity as a farmer. This report includes many quotes and two farmer case studies that showcase these elements. Strategies for sudden change are Absorb and Transform – these parallel Expoit and Adjust, with Absorb coping with the crisis out of the farm system’s capacity to buffer shocks (eg using equity) and Transform responding to the shock with major changes to the farm activities. They are not considered in depth as they do not relate so well to environmental limits. Rotorua farmers have been working with regulatory limits to achieve water quality outcomes for over 10 years. However now they face a ‘step change ’ from staying within a nutrient cap to making significant nutrient loss reductions. While they have so far generally been able to respond with the marginal changes of Exploit, these farmers may soon need to adapt further and Adjust. A survey of Rotorua farmers shows that there is significant scope to support how New Zealand farmers cope with environmental limits.

Outside influences are most helpful with actions taken alongside their farm businesses (e.g. learning about the environmental issue, or increasing their involvement with community or industry groups). Both ‘thinking’ (e.g. considering different future possibilities for their farm) and actions within the farm business (e.g. experimenting with farm management strategies) also have significant influence by an outside person/experience. Rotorua farmer responses to open ended survey questions pointed strongly to: their need for confidence in the wider change process; a desire for multidisciplinary solutions; the deep value of interaction with others; an d the contribution of personal resilience factors to how they think about change.

The main findings of this project come from aligning overseas experiences with the responses from Rotorua farmers, which reveals several areas that require action in order to better support farmers to live with and shape change. These are listed below.

Social/situation enabling

  • Develop a strategy for understanding and fulfilling farming’s social licence to operate.
  • Support farmer confidence in the processes of achieving environmental outcomes.
  • Initiate reflection to reexamine farming beliefs and re-form meaning and identity.

Mind-set enabling

  • Train rural professionals to lead the way with the skills and language of adaptation, and to focus on the process of making choices in their work with farmers.
  • Widely explore what diversity may mean in NZ agriculture settings.
  • Develop a self-evaluation process for farmers to identify strengths and opportunities in their farming ‘change-ability’.

Relational enabling

  • Facilitate farmers entering into a multidimensional web of networks, which may have to utilise a range of means.
  • Creatively work relational skill development into more than human resource (HR) activities.

Functional enabling

  • Continue to build business, technology and systems understanding to provide a robust base for adaptation and a ‘library of innovation options’.
  • Work with the technology sectors that provide tools that will support NZ agribusinesses’ ability to retain their social licence to operate and remain profitable.

Industry transformation

  • Integrate the above and lead industry adaptation that answers society’s desires and thus protects future competitiveness.

Readers of this report will thus gain insight into the wide variety of ways that producers have coped with constraints and the experience and desires of NZ farmers now coping with environmental limits. Overall, this report signposts current opportunities to support adaptive and resilient farming in a changing New Zealand context.

Navigating Constraints: Primary producers coping in changing contexts – Sharon Morrell

How can self-awareness and self-reflection ignite a farmer’s motivation to engage in leadership.

Executive Summary

Changing economic and social pressures in the rural sector mean farmers need to change the way they act and react to challenges if they want to survive and thrive. Strengthening rural leadership has been identified as a key opportunity to help famers to respond and adapt to their changing environment both on-farm and with in their wider sector. From the findings of my research, self-awareness and self-reflection are two recognised traits that show strongly in farmers who are performing well in leadership positions. The link between self-awareness and leadership is strong (Musselwhite, 2007), but the understanding of this link by farmers is limited.

By understanding their past, their experiences and actions, and connecting that with their personality type and leadership style, farmers will be more empowered and prepared to step into the leadership roles that are required to ensure the agriculture sector remains vibrant and adaptable in the future. When a farmer makes time to learn about and reflect on their past experiences, it creates a lightbulb moment.

This lightbulb moment creates an ignition of thought which stimulates them to seek what they need to learn about their leadership style and where they are best suited to contribute their leadership skills. Everyone has the potential to be a leader, whether in their own personal business or the wider sector. To understand this and make a conscious decision to place themselves in an area that is best suited to them, farmers then ensure their effort will provide the biggest benefit to themselves and those around them.

How can self-awareness and self-reflection ignite a farmer’s motivation to engage in Leadership – Ben Allomes