China now takes one fifth our total milk supply and that is set to grow – so get used to it, says Henry van der Heyden.
Speaking at the Fieldays KPMG Leaders’ Breakfast, the Fonterra chairman predicted continued reliance on China for our agricultural exports but warned that this growth comes with obligations.
The flow into China will only continue if New Zealand is seen to be a contributor to the Chinese economy.
“We, for one, are investing in China to help them establish a dairy industry,” he says.
Fonterra recently purchased farms in China and is involved a number of joint ventures.
Wednesday broke crisp and blue for the cheery thousands that descended to Mystery Creek for the annual rural knees-up and spendathon.
A similar mood of buoyancy accompanied the KPMG event, attended by 60-odd leaders including Primary Industries Minister David Carter, Landcorp’s Chris Kelly and Labour’s agri-spokesperson Damien O’Connor. But as with all things farming there was a cloud to the silver lining.
The rising influence of China as investor, buyer and partner for New Zealand agriculture is much on these leaders’ minds. Privately, some expressed anger at the 'sheer xenophobia’ displayed by some Kiwis in response to the Crafar farms sale. They warned of an exodus of Chinese interest if the hostility continues. “They’ll simply move to Australia,” grizzled one.
Ian Proudfoot of KPMG also flew a warning flag, arguing that complacency regarding China will lose market share to Europe. A forthcoming review of the European Common Agricultural Policy is predicted to result in reduced protection for inefficient local producers. As happened in New Zealand in the 1980s, that short term pain will be met with innovation and expansion into export markets. “The biggest and most attractive market is China, where New Zealand is competing on quality and sustainability – something the Europeans know a lot about.”
One reason to adjust our attitude is that history is on Asia’s side. China is reasserting its natural economic power, says Chris Kelly, the chief executive of government farmer Landcorp. Throwing up an ambitious Powerpoint slide that showed the economic outputs of four continents since the birth of Christ, Kelly says China and India dominated the world economy for centuries, until the industrial revolution. “The European and American success is an anomaly and we are heading back to a rebalancing.”
All this talk of China might make you reimagine Fieldays as a multi-cultural event but a look around the room this morning and a stroll around the expansive grounds shows that agri-business is still very much a white, middle-aged and male affair. Bring on the future.