The intention is right, the understanding is apparent and the realisation is clear that our primary industries need to be less commodity, more market.
The question remains how.
A forum organised by the NZ Institute of Agricultural and Horticultural Science in Wellington reinforced that our economy is just as much as ever living off our ability to convert sunshine, soil and fresh air into protein products. (Indeed, David Lange was ‘thanked’ for suggesting back in the 1980s that agriculture was a sunset industry – perhaps changing the mindsets of a potential generation of would-be scientists for the sector!). Some audio recorded by SciBlogs Kent Atkinson is here.
But, as Rod Oram pointed out when crunching some numbers for the 120 attendees, agriculture ain’t sustainable. We are not a low cost place to produce milk or meat. Our land is very expensive. Oram said that even the family interests of Fonterra chairman Henry van der Heyden have bought land for dairying in Missouri, USA. Its price is a third that of New Zealand’s and their milk price is higher. (Fair enough to take our technologies over to America, but shouldn’t NZ brand our key comparative advantage – a responsible pastoralism method?)
Oram said that the price ceilings for milk powder and meat are probably being reached. Substitutes such as soy powder become more attractive, permanently given the costs of changing inputs for a manufacturer, beyond current levels. NZ shouldn’t then expect a continued run of ever increasing agricultural prices.
The number of young people studying primary industry science is way below replacement requirements for our major industries – agriculture, horticulture, forestry and aquaculture.
Universally the speakers, from former agriculture minister Jim Anderton to Royal Society of NZ president Garth Carnaby, Fed Farmers vice-president William Rolleston and before-mentioned Oram all said we must add more value to what we produce.
Anderton made an analogy about ‘cracking’ milk (much as crude oil if refined to its constituent ‘bits’). But later, questioner Kevin Marshall and speaker Oram both agreed that Fonterra’s (mostly off-farm) R&D spend of about $125 million a year out of total revenues of about $20 billion is not really enough. It was pointed out that Nestle has just announced an incremental investment in nutriceuticals of US$500 million!
Because, at the heart of what everyone is talking about, is it is only off-farm; more cleverly using the raw materials produced from our land, water and brains, that we can create more value.
We’ve failed, so far, to make ‘invention’ at this level seem sexy. We’ve failed, so far, to show potential investors (including farmers) that there’s money to be made in some of these areas. And we’ve failed, so far, to partner up with those (usually overseas) entities who could help take products to market – and share the value-added component.
The forum n a sense was too stuck on the farm; even while it didn’t want to be.
We’re good, indeed world-leaders at the growing. In spite of agriculture’s current commodity boom, a sustainable economic and environmental future is only possible by becoming world-leaders at transforming the raw materials we naturally produce into products that manufacturers and consumers need or desire.
We have a long way to go – though such a forum is at least a place to start airing such concerns.