Low morale, fatigue and anxiety are taking a toll on everyone in the food and fibre sector and industry leaders must step up to give people confidence to stay the course.
The 2024 KPMG Agribusiness Agenda has sounded a strong, sombre note echoing the major concerns of more than 150 sector leaders surveyed about their most important priorities.
Industry leaders are concerned about the looming threat of high-pathogen avian flu, capital constraints, changing market expectations, and low industry morale, the role of regulation, reframing the environment, oceans, food security, and climate transition, among other things.
But top spot in this year’s priorities list is the imperative for world-class biosecurity, followed by the need to act on the results of gene editing discussions.
A steady third on the list is the need for high-quality trade agreements followed by investment in resilient rural infrastructure and broadband access to all.
No 6 is public/private science partnerships and seventh is the need for water storage.
Eighth is resilient supply chains, then maximising the sustainable use of our oceans, while 10th is maintaining immigration settings.
KPMG global head of agribusiness Ian Proudfoot, co-author of the Agribusiness Agenda, says the likely arrival of avian influenza has ensured biosecurity remains the No 1 concern.
As the covid pandemic illustrated, small things like washing hands and wearing masks did the most to protect us from infection.
“With the threats we face, its will be good farm management practices and hygiene standards that will offer the most protection.
“The last couple of years have been really challenging for many, with commodity returns plummeting, interest rates soaring, and the climate growing more unpredictable.
“The morale of people across the sector has been a significant concern, as was evident in its being the dominant discussion topic during the roundtable sessions and the conversations led by the emerging leaders.”
The call for action on gene editing technologies jumped from sixth last year to second.
Leaders surveyed cited the potential to protect biodiversity and control predators, not just enhancements to productivity.
“One emerging leader says we cannot let uncertainty continue for another five years,” he says.
A well-thought-through and accepted position is now urgent.
To ensure our competitiveness, we can’t continue to have “unenforceable and foolish rules” when the science now means it is impossible to tell whether a product has been edited or not.
KPMG found that the focus on climate transition had fallen off the radar for many industry leaders after a year free of major climatic events.
Our location in a region of the world exposed to more extreme weather events means there can be no complacency that we have another decade or two before another Cyclone Gabrielle.
Banks and insurance companies are already using geospatial and climate data in decisions about who to do business with.
The world is facing unprecedented volatility, even to the potential extent of a third world war in which we could quickly lose access to markets and our fuels and fertilisers.
“Life is currently tough for all producers as their costs have gone up at the same time as their prices have come under pressure,” Proudfoot says in his introduction.
“The message from many of my colleagues around the world is that life is getting so difficult for some producers that they are looking at their options to exit.
“What do we need to keep farmers farming and growers growing?”
Proudfoot put forward sustainable increases in revenue from added value rather than riding commodity prices up and down.
Farmers must also be compensated for ecosystem services to society with markets that allow trading in biodiversity, fresh water or soil credits.
He called for circular business models that utilise biomass or co-products to replace fossil fuels.
“It is our view that every food company will become an energy company and this is critical to ensuring the financial resilience of producers.”
Anaerobic digesters are everyday installations around the world along with the food, fibre, fuel triple play.
“This is not yet the case here, suggesting we are complacent or missing a trick,” he says.
The discussion on using new generation biotechnologies needs to be concluded urgently so farmers can consider tools to enhance production systems.
New, lighter chemicals and animal health remedies are not brought to NZ because the time and costs of securing approvals are not justified by our market size.
“We are becoming an innovation backwater at the bottom of the world that is too difficult to deal with,” Proudfoot says.
NZ producers already consider themselves resilient and they are looking for a hand up, not a hand-out.
“Food and fibre producers have come through droughts, biosecurity incursions, pandemics, floods, labour shortages, border closures, cyclones and a whole range of other challenges.
“Yet they continue to deliver the results that have kept the NZ economy functioning.”
The volume of comments about regulation was lower this year, the KPMG Agribusiness Agenda says.
The more relaxed tone is undoubtedly due to the coalition government’s commitment to eliminate the perceived regulatory oversteps of the previous government.
Nonetheless, guardrails that clearly identify inappropriate practices are critical to protecting the investment made by all participants in the sector.
“The best regulation works well, is low cost to implement, and doesn’t load significant incremental operating costs.
Delays in getting regulatory approvals have prevented NZ companies from getting leading-edge products that are already available elsewhere in the world.
