New Zealand risks missing ‘a golden opportunity’ to grow agricultural sector

New Zealand risks missing a ‘golden opportunity’  to grow its agricultural sector, and addressing this will require a coordinated, joint approach from across the sector, a new report on the competitiveness of New Zealand agribusiness has warned.

Agriculture in Focus 2014: Competitive Challenges, by agricultural banking specialist Rabobank, says New Zealand agribusiness is facing mounting competitive threats throughout the supply chain, which require concerted and aligned action from industry and government.

The report, which jointly examines New Zealand and Australia’s agribusiness sectors, identifies six key challenges affecting the competitiveness of the countries’ food and agribusiness industries, which are increasingly coming under threat from a growing group of highly-resourceful international competitors, including countries in South America, Eastern Europe and even Asia.

The report says the critical areas, which need to be addressed as a matter of priority are:

  • rising production costs both on-farm and beyond farmgateinternational market access;
  • logistics infrastructure (in)efficiencies;
  • regulatory pressures;
  • capital constraints; and,
  • product innovation and development.

The report says that many of New Zealand’s competitors in agricultural markets around the world are investing heavily and becoming much more productive, and this is very much raising the bar for New Zealand’s agricultural industries.

It says food and agriculture is becoming the subject of increased focus from governments around the world as the challenge of meeting the food needs of a growing and wealthier global population places pressure on farming enterprises and warns Kiwi producers that New Zealand is not the only agricultural exporter looking to capture this increasing demand. The report goes on to say that over the past decade highly-resourceful developing countries have begun to assume a greater role in the global export trade of food and agriculture products.

It also say that New Zealand’s milk production growth is likely to be constrained over the next five years relative to the 2008 to 2013 growth period as the ability to change land use will become more difficult and expensive. The future growth of the New Zealand dairy industry will party depend on how efficiently producers adapt production systems to meet heightened environmental controls. This will require even closer engagement locally with regulators and the wider community, alongside a rigorous programme of measuring, monitoring and mitigating environmental impacts.

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