Community-Centric innovation and the regenerative farming frontier.

Executive Summary

There is a new frontier of food and farming emerging. Its emergence is in part a response to the limitations and negative impacts of our current farm systems, and in part driven by a realisation that ‘regenerative farming’ is opening up a new world of possibility. Many of our current farming systems are being ‘squeezed’ by commodity market competition and volatility, rising costs, public scrutiny and regulation, plus potentially disruptive technologies that bring significant challenges to the ongoing viability of agricultural businesses – farming is becoming increasingly complex and the future less certain. Recent KPMG Agribusiness Agendas have identified these pressures and called for New Zealand agriculture to target high end consumers, focusing on product and environmental leadership and excellence. What is perhaps less emphasised is the scale of shifts required in our farm systems if we are to truly respond to our changing reality.

This report is a call for a new and additional ‘approach’ to agricultural development and innovation in New Zealand. As I travelled with Nuffield it became increasingly clear that regenerative farming not only full of opportunities, but shifting our farm systems and practises in this direction is both a positive and necessary response to our changing reality as farmers. Regenerative farming is a broadly defined system of principles and practises focused on biodiversity, soil health, ecosystem function, carbon sequestration, improving yields, climatic resilience and health and vitality for farming communities. A key feature of these farming systems is their high demand for knowledge and creativity in designing and managing the complex biological relationships that underpin their success, as opposed to conventional systems that are more dependent on inputs for control and management. This key distinction is where our current agricultural development and innovation system falls short in its potential to support regenerative farming. Our current system focuses on a “science-driven, linear, technology transfer-oriented approach to innovation” (Turner et al. 2015) that, while perhaps suited to more homogenous and input-oriented conventional farm systems, does not align well with the more holistic and high risk innovation demands of regenerative farming (that also offers less opportunities for agribusinesses).

The ‘approach’ to support the innovation of regenerative farming systems and practises needs to move beyond old dichotomies between ‘top-down’ and ‘bottom-up’ drivers of change, towards community-centric approaches guided by the knowledge, experience and creativity of farmers and rural communities, with the support of other actors (ie. government, policy, research, relevant businesses and organisations etc). Farmer and practitioner experiences of making or 3 supporting shifts towards regenerative farming, around the world, have formed the basis for the conclusions of this report. Community-centric approaches were observed to facilitate diverse participation and place equal value on local and external expertise, where everyone ‘meets as equals’ in a shared commitment to achieving community goals. In this manner, the diverse interests of communities and society can be acknowledged and incorporated into decision- making and action, with the potential to reconcile apparent conflicts within and between rural communities and wider society.

A community-centric approach to regenerative farming innovation is also a principle-led and prototyping approach. A principle-led approach is a shift way from ‘recipe’ farm systems that are often inappropriately applied, towards a focus on translating farming principles into the diverse contexts created by land, climate and farmer skills and aspirations. A prototyping approach tests possible solutions to complex settings with a fast-fail methodology, representing a new approach to learning that focuses on diverse teams, innovation and agile testing, guided by practitioners such as Otto Scharmer and Zaid Hassan. A community-centric approach engages actors from across the system on challenges at a range of scales, such as water quality management in a catchment or rural employment/livelihoods, to challenges on individual farms (ie. what trees to plant where) that may or may not be shared by other farmers. It recognises the inherent connectedness between individual and collection actions, utilising diverse participation and commitment to understand complex settings and develop solutions that are beyond the capacity of any individual.

Mangarara Station, where I now live and work, is committed to a regenerative farming vision and is confronted every day with the challenge (and excitement) of working towards it. We hope to build mutually beneficial relationships with many different people, from local farmers and community members, organisations, to regional and national policymakers, researchers, sector organisations and NGOs, entrepreneurs and businesses, software developers and generally any creative person who sees opportunities here to support what we are trying to achieve. There is a huge amount that we don’t know, and therefore we must experiment based on existing knowledge, intuition and creative thought about what might be possible. It is essential that regenerative farming innovation is supported by the institutions and organisations whose mandates align with the potential value regenerative farming can generate. The opportunity for New Zealand (and other countries) is to collectively build more diverse, integrated and resilient landscapes, economies and communities that contribute positively to the future we want to create.

Community-Centric Innovation and the Regenerative Farming Frontier – Sam Lang

China Dairy: the growth of an industry.

Executive Summary

China is currently the most important market to the New Zealand Dairy Industry.

I first visited in 2014 and soon realised there were some large differences to the information New Zealand Dairy Farmers believed to what was actually happening on the ground in China.

Rapid development was occurring in the Chinese Dairy Industry and the potential for a significant increase in production through minimal improvements was apparent.

Knowing the Chinese people had the ability to modernise industry rapidly, I felt there was a potential threat to the New Zealand Dairy Industry; my livelihood.

On reflection, China will struggle to meet growing demand internally due to factors such as poor management, substandard feed quality and increasing environmental pressures.

Barriers to rectifying these problems will be faced by the Chinese Dairy Farmer through Chinese consumer pressure for sustainable on-farm practices such as reducing the environmental impacts of housed dairy operations.

New Zealand can capitalise on this by increasing the amount of due diligence on the analysis of risk in China.

New Zealand needs to beware that the threat to export markets is not only from internal Chinese production, but also from that of their European counterparts. New Zealand needs to clearly differentiate their products by becoming Genetic Engineering (GE) Free.

New Zealand must invest in relationship building with a long-term view to match that of Chinese relationship ideals.

The New Zealand Dairy Industry needs to change how it participates in the evolving Chinese consumer market to, maximise returns to it’s farmers.

China Dairy: the growth of an industry – Bede O’Connor

Will it have legs: An investigation into synthetic food and the implications for NZ agriculture.

Executive Summary

Synthetic food (SF) is being touted as a revolution in food production that could replace animal products. While the industry is more bark than bite at the moment, it’s rapidly gaining awareness and attracting significant funding by being portrayed as a solution to many of the global problems associated with conventional agriculture. As the pressure intensifies on humanity to curb climate change, all options are being considered and, with a carbon footprint larger than the global transport sector, agriculture is well and truly in the spotlight. Agriculture has held relative impunity from climate mitigation strategies up until now but SF is bringing that into question by providing a potential alternative method of food production.

The environment is one of the key drivers behind SF but there are others as well. The drivers are being used as a platform to promote SF as the way of the future and leveraging off the growing disconnect between consumers and the farms that currently produce their food. It’s too early to know if SF will actually compete at scale on a cost and quality basis but nevertheless, the messaging around SF is already having a negative impact on the perception of agriculture. Countries like NZ who rely heavily on agricultural exports are at risk of losing market share to SF as well as being tarred with the same ‘industrial agriculture’ brush as other countries and becoming what one journalist has described as the “Detroit of agriculture”.

As with many emerging technologies though, things don’t happen overnight and the devil is often in the detail. The NZ primary sector needs to resist the urge to take a stance against SF based on weak journalism and instead be part of an informed conversation. The first response from people a year ago, when discussing SF, was was ‘yuk, it will never take off because people want natural food’. Thankfully, the conversation is now shifting to ‘what could happen if SF did take off and how do we approach this potentially disruptive technology?’. SF needs to be approached with an open mind and lots of questions rather than building a wall to defend our patch.

NZ Ag needs to get a better handle on how conventional food measures up against SF based on the ruler that tomorrow’s consumer will use. Carbon emissions, soil conservation and animal welfare are some of the attributes that consumers will look for and this needs to become part of our marketing approach in the future.

In reality, conventional agriculture is more of a threat to the SF industry at the moment, not the other way around. SF consists of startup companies with products in the development phase and markets that are built on promises. This isn’t a reason for us to rest on our laurels but instead a window of opportunity to get involved and have a say in how the SF industry evolves. We can choose to be disrupted or help shape the future of food production by understanding the drivers behind SF and being part of the solution, not part of the problem.


Will it Have Legs? An Investigation into Synthetic Food and the Implications for NZ Agriculture – Richard Fowler

Defining our Kaupapa: New Zealand’s role in the future of global agriculture.

Executive Summary

Our economy is founded on excellence in primary production and exporting this produce around the world. Given our isolation and abundance of agricultural production, New Zealand has responded to the challenge of distance between the production base and markets through a focus on operational excellence. Continual improvement in productivity and efficiencies along the supply chain from perfecting a pastoral based farming system has enabled New Zealand to compete internationally regardless of distance.

Historically the United Kingdom and Europe were our main markets, with counter-seasonal demand. Therefore, the main goal was to produce more volume at a cost competitive price. Over the years New Zealand has diversified away from the traditional markets towards more emerging markets of Asia, particularly China. This pivot has been enabled through Free Trade Agreements that have allowed New Zealand product preferential access.

New Zealand will face new challenges as the global trading environment moves on from a period of liberalization. This presents significant challenge for New Zealand and a cause to reconsider how we could overcome the market production dislocation challenge. The New Zealand agriculture sector have strategies associated with greater internationalisation and market orientation, however there is limited evidence of implementation. The paradox between market orientation, greater internationalisation and a continued focus on operational excellence needs to be recognised.

If New Zealand wants to overcome the market production dislocation in a new way, it is useful to draw on the lessons of other small economies. This report investigates the market production dislocation of five other countries, and the ways by which each country has developed an eco-system to overcome this challenge. A framework is presented that sets out the importance of recognising the why, the how and the what of an eco-system to overcome the market production dislocation. Understanding the why, clarity of purpose, or in New Zealand’s case our kaupapa is critically important to establish to overcome the market production dislocation. Kaupapa can be defined as the principles and ideas which act as a base or foundation for action. Each country was found to have a burning platform that either forced change, or presented an opportunity to change. The inherent culture of each country combined with the burning platform challenge led to the purpose, or why, for change. Once the why is understood, the systems and leadership, and nature of value creation and realisation can be developed. These are secondary concepts, and can only be developed once a clear why is expressed.

New Zealand agriculture lacks a clearly defined kaupapa and this makes it impossible to create change within the industry. Without a guiding star, there is no chance to make difficult decisions or trade-offs. The paradox of market orientation and operational efficiency will continue to create conflicts within the agriculture sector and wider economy. Leadership for change needs to come from the creation of a united industry body that represents all sectors of the agriculture industry. The critical mass generated from such an organisation will be powerful when speaking on behalf of all New Zealand growers and farmers.

New Zealand can use this moment in history as a chance to redefine our kaupapa, and come together through collaboration. Success will come when New Zealand speaks with one voice when asked what the agriculture sector stands for. The paradigm of globalisation is shaky, and the opportunities for innovative business models due to global connectivity are higher than ever before. Now is the time for action.

Defining our Kaupapa: New Zealand’s role in the future of global agriculture – Jessica Bensemann

Agribusiness governance: Finding the green zone.

Executive Summary

  1. Corporate governance has grown in prominence in recent decades to the point that it is promoted as a default business practice. This has more recently translated to a belief that all businesses should embrace good governance. In other words, corporate failure is often closely associated with poor governance, resulting in the widespread assumption that good governance is therefore a pre-requisite of corporate success.
  2. Traditional corporate governance represents an ecosystem of rules, tools, influences and activities that collectively operate to direct and control an organisation.
  3. While the re is no single accepted theoretical base for corporate governance, one – Agency Theory – which seeks to address the risks arising from a separation of ownership and management – overwhelmingly dominates practice and education. However, the governance needs of the bulk of our SME agribusinesses are not satisfied by an Agency Theory approach:
    1. Governance as a means of Control : Strike one! SME – Agribusinesses are generally owned and operated by the same people or group, often a family, where Agency theory adds little or no real value, resulting in “management processes on steroids masquerading as governance.”
    2. Governance as a d river of Strategy : Strike two! “Culture eats Strategy for breakfast.”
  4. Green – Zone Governance – the role of Service: An opportunity to re-calibrate the approach to Agri-SME governance based on Resource Theory, which seeks to bolster the capability, networks, outlook and expertise of the business and business owner as a whole.
  5. In a family business, genuinely fair outcomes are realistically few and far between – which is why a commitment to a fair process is so important, and why Service-focussed governance can help.
  6. Green Zone governance assumes you already have control over your own organisation, and that you have the culture you need to win. If you have neither, introducing a formal system of governance is the least of your problems. But project governance might help get you on track.

Agribusiness Governance: Finding the Green Zone – Tom Skerman