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'Call to arms' for agri-food sector

An independent report on the future of New Zealand’s agri-food sector is calling for a joint approach from industry and government to drive the activities needed to treble the value of exports by the sector by 2025.  

The government’s Economic Growth Agenda targets increasing exports to comprise 40 percent of GDP by 2025. The aim is to sustainably grow earnings from food and beverage industries (agri-foods), high value manufactured goods and services, tourism, and minerals and petroleum, including a near trebling of the real value of agri-food exports to $58 billion.

In April 2010, the Riddet Institute (part of Massey University) convened the Agri-Food Summit, which resulted in consensus for the need to develop a strategy for agri-food research.

The result? A Call To Arms, which outlines four "transformational strategies" for the agri-food industry:

1.    Selectively and profitably increase the quantities and sales of the current range of agri-food products.
2.    Profitably produce and market new, innovative, high value food and beverage products.
3.    Develop value chains that enhance the integrity, value and delivery of New Zealand products and increase profits to producers, processors and exporters.
4.    Become world leaders in sustainability and product integrity.

"None of these strategies is new – all have been raised in one or more previous reports. They are all critically important and complement one another but they have not yet been adequately acted on to achieve the level of growth targeted for the sector."

The report says the first strategy is a continuation of business as usual, while the second and third will be needed to contribute the targeted extra 3 percent CAGR New Zealand is aiming for. Strategy four is "essential" to meet customer requirements and to be allowed to retain the right to farm and process in the future. "There are price premiums available for sustainability and product integrity already and these may grow in the future."

Most important was the need to establish an Agri-food Board that would be the focal point for sector leaders to work together, and for industry to work with government.

While the government has committed effort and resources to accelerating growth in the agri-food sector and set targets, industry now needs to act on those opportunities.

“Our strategies are neither new nor unique, but, in the past, implementation by industry has failed. Crucially we have provided a pathway and a proposed mechanism for action that will work. There is urgency now, because New Zealand faces a mediocre economic future if we don’t drive the major recommendations in this report to fruition," said Dr Kevin Marshall, who led the report team.

Survey respondents pointed to a lack of leadership (particularly from industry chief executives) to animate the process. Many also said government structures are siloed and not conducive to coordinated efforts.

 Professor Paul Moughan, Riddet Institute co-director, said New Zealand has unrealised potential in agri-food.

"But until all key parts of the sector work together in a planned way, New Zealand’s economic growth will be not be maximised. It’s time for action by the agri-food industry and action that has a good chance of success. This is not just another strategy, but a blueprint for action.”

The report will be on the agenda at the forthcoming Primary Industry Chief Executives’ Boot Camp in August at Stanford University in California.

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