KPMG released a report today by Ian Proodfoot, who predicts that New Zealand has as little as 5 years before its competitive advantage in production of bulk commodities is eliminated by the growth of large scale intensive farming practices in developing countries. This will not be news to many in the agri-food sector.
Last Wednesday I attended the Riddet Institute’s Agri-Food Forum on the future of the food sector in New Zealand. The forum encompassed a broad range of views, so while there were presentations from both local and international experts in food science, there were also talks from outsiders such as Sir Peter Gluckman, the Prime Minister’s Chief Science Advisor, and Andrew Clelland, CEO of IPENZ.
There is little doubt that the agri-food sector is one of the most important parts of our economy and that it will continue to be extremely important for the foreseeable future, even as commodity prices plunge. Of the developed countries, New Zealand’s economy is the most dependent on agri-food by a wide margin.
Indeed, when it comes to ’picking winners’, the argument is often made that it is a small improvement made in such a large sector that brings the best bang for the buck. Yet from the talks I saw at the Forum, it seems that the low hanging fruit in this sector is gone. The sector realises that it must move away from simply increasing its yield of commodity, and even premium, food products to focus on value-added food. The KPMG report serves to underline this realisation.
So what can be done? The unanimous view expressed by those at the Riddet Institute’s Forum was that the sector must embrace science and technology like never before. However, a glance at the number of agri-food PhDs we have produced in recent times suggest that our capacity to develop value-added foods has also been eroded by long term underinvestment in skills and training.
Furthermore, the most value is likely to be gained by introducing new ideas and technologies from outside of the food sector. In order to sell value-added foods with proven clinical effects, for instance, the food sector would need to collaborate with leading medical researchers. While it can try to look off-shore for these collaborations, the reality is that world class international research teams have little incentive to work closely with our food industry. Attracting these sorts of international collaborations here requires matching domestic capabilities.
Thus our underinvestment in other areas of science limits the chances for cross-sectoral technology transfer domestically and internationally. Only by increasing R&D effort across the board will New Zealand be able to maintain the value of its agri-food sector.