KPMG agribusiness group have recently released their 11th annual report Agribusiness Agenda 2021 on how they see New Zealand agriculture developing. A long read and those who wish to go through better make sure they have coffees and ginger nuts at the ready as it is not a light read.
While some time was spent analysing what current issues are that farmers are struggling with, the more interesting area was what the future may bring to global trade and relations (Mega trends).
They have reduced the list of mega trends from 19, which was what they had in the 2019 and covered everything except ironically pandemics, (but they weren’t alone there) to 6. These are:
Recognising the growing calls for action on reducing risks to climate change they perceive risks with competition for resources with different ‘agencies’ having different views on how it should be achieved with the potential for “commodity conflicts” occurring.
They see a health care system which focuses on prevention with a more “holistic and proactive approach” as the “traditional creative approaches” have obvious shortcomings.
Inequality falls on everybody
Highlighted by the pandemic along with the increasing calls to remedy old social deficiencies such as the “Black Lives Matter” movement they see a need for “organisations to be very clear on their purpose and then implement measurement tools” that go beyond just measuring financial measures but with the ‘organisations’ are delivering against their purpose.
They highlight the international trend of governments “placing explicit priority on local interests over the collective good of the global community”. This has created uncertainty in political and trade alliances being “stretched” to levels not seen since the end of WW2.
Likely on the back of the ‘hacking’ incidents that have been taking place in recent months they see data security coming under increasing risk while the need to access data is necessary to foster a nations economic prosperity as well as security.
Informed consumers purge secrets
On a similar theme to the previous one they believe consumers with access to more information will be able to ‘see through’ the PR of firms to reveal what is really going on within a ‘firm’. As such they believe firms should take the initiative and have transparent systems to encourage consumer confidence and favour in them.
They added in an additional 7th theme specifically relevant to New Zealand which was:
The Recognition of Indigenous Wisdom
Likely to raise some eyebrows they see this area as what can make New Zealand stand out from other countries. “Moving from tokenistic consultation and appropriation of words of cultural taonga (without adoption of the spiritual substance) to substantively embedding a Maori worldview into our day-to-day activities will allow us to truly capture the unique value of our indigenous wisdom in how we engage with each other and the world”.
Getting back to land-based themes more specifically, not surprisingly they see the rise of plant based and cellular developed food as being inevitable. However, they did highlight an interesting stat. New Zealand can feed 40 million people annually, but within the same timeframe the world population has grown by 81 million. This should provide New Zealand’s ‘traditional’ food producers considerable lead-in time in which to adjust. In the meantime, they highlighted that some within the agritech sector believe there is great opportunities for New Zealand based firms to grow exports in this area.
Looking at broad initiatives they believe New Zealand has opportunities to exploit they provided 11 different themes.
- Emphasis product value propositions be synonymous with good health.
- Pioneer food businesses to doctor models through investment in health research.
- Evolve and enhance primary product payment systems to encourage a focus on quality nutrition rather than yield.
- Leverage our competitive advantages in plant cultivation. Both for exotic and native species.
- Embed Maori knowledge and principles to be central to our production systems and products.
- Develop cellular businesses with New Zealand meat producers that can “position us at the premium end of these technologies”.
- Invest in renewable energy and storage.
- Invest in the novel foods applications that are distinctively New Zealand. Using distinctive native insects and flora and fauna etc.
- Invest in information technology education for the next generation of New Zealanders.
- Develop new business models that are structured to sell technology and intellectual property for food production systems.
- Ensure our food achieves ethical and environmental accreditations.
When the report got on to pastoral systems the number of predictions narrowed down to three themes.
- The Digitisation of farming
Traceability of produce back to where it was grown etc right through to the use of technology for drones and animal ID.
- Regenerative farm ecosystems
Farmers are well aware of this trend already as much from regulation as any other driver. But certainly, a feature of future farms.
- Diversified farm landscapes and integrated systems
A continuation of 2 but a bit more fleshed out.
They see a continuation of the corporatisation of farm ownership with family, Iwi and private corporate style farms expanding at the expense of the ‘family farm’ who will need to work collectively and pool resources if they wish to remain viable. Farms will be managed or leased by younger ‘dynamic’ people who they appear to see as more skilled than current or past generations.
Overall, I found the report long on aspirational thinking but not too sure how grounded in reality it is. It sees farms getting larger while at the same time making agriculture more connected to the urban sector. It talks of producers supplying their local towns with ‘medicinal and ethical’ as a result of the ‘re-localisation of supply chains’. Larger farms tend to become more mechanised and ‘professionalised’ leaving little room for interactions with ‘Joe public’. So, it all sounds a little idealistic to me.
At 92 pages the report does provide plenty of room to discuss issues but this reader came away largely unconvinced. It got off to a bad start having a government minister providing the foreword, as it created the look of a party political broadcast.
No chart with that title exists.