The sun must never set on New Zealand’s agriculture

These are increasingly troubled times for New Zealand agriculture.  A significant proportion of the population has turned against farmers for environmental reasons relating to nutrient leaching and water quality. There is also a loud political narrative about methane from ruminant animals and the need to reduce livestock numbers.

There is also a group of agricultural doomsayers who state that new plant-based foods and even totally artificial foods can mimic meat, and that they will do so at much cheaper cost than the real thing. And finally, there is an increasing group of consumers who are committed to vegan diets for perceived health reasons or relating to personal ethical perspectives.

These are the big external storm clouds. There are also some internal problems, particularly for dairy, relating to unsustainable debt levels and declining farm values. The challenges of market development are relevant across the board.

It seems to be with glee that a proportion of the urban community is now saying to farmers that pastoral agriculture based on cattle and sheep is a story of the past and not the future.  It is therefore not surprising that many farming families are dispirited.  We are getting back to the 1990s where the children of farmers are looking to the cities for their future. Oh dear!

Given this situation, it would seem reasonable to ask whether Prime Minister David Lange was indeed correct when, back in 1988 or thereabouts, he described agriculture as a sunset industry. Did he just get the timing wrong?

Personally, I remain an optimist. I think agriculture is going to remain the backbone of our export-led economy. I believe we can find, and have to find, and will find, solutions to all of the problems. However, I also think there are some rough waters ahead.

We will need to find pathways to deal with the current challenges. Those pathways will be braided just like our braided South Island rivers.

The braids in our South Island rivers weave around, and as a novice kayaker I learned that not all lead back to smooth and open water. Sometimes the water slips away under the shingle, sometimes the braid becomes a rapid, and sometimes the braid leads in under the willow trees. But there are always ‘work arounds’ to be found, although dragging a kayak across dry ground is no fun.

In this article I want to build the argument as to why agriculture in general, and a flourishing pastoral agriculture in particular, is going to be important in the decades ahead. Details of the specific braids that we need to navigate must wait for later articles.

There is good reason why New Zealand, despite its isolation in the South Pacific, has been able to maintain first-world living standards. Sure, we have indeed been slipping down the league tables for wealth over many decades, but without agriculture and tourism providing the foundations it would have been much worse.

Given our isolation, we are never going to be a world-leading manufacturing centre. We are never going to be a world-leading financial centre.  And we are never going to be a world-leading centre of education.

For those that think that education alone can provide us with the lifestyles we aspire to, there is a need to face hard facts. We have a good education system, but not a great system. By most measures, we don’t have a single university in the top 100 universities of the world. We do not, with very rare exception, produce Nobel-prize winning scientists. The three we have produced all worked overseas and all are long deceased.

Yes, we must continue to strive with our education system, but we have no inherent advantage over Europe, America, and increasingly much of Asia. No, we are simply an isolated little country in the South Pacific.

If New Zealand wants to compete with the rest of the world which has advantages of location and scale, then we have to make the best of our competitive advantage. Our competitive advantage lies in our agricultural resources, our bountiful water resources, and our wonderful scenery.

For those who agree with me, but think that our agricultural potential lies in horticulture and arable crops, I say think again. Biology, climate and soils come together to tell a different story.

Many people get fooled by the great successes we do have in relation to wine and kiwifruit, and to a lesser extent the success of apples, avocados, cherries and other crops. We can further increase our horticultural crops as long as we recognise that horticulture is highly dependent on irrigation water, but even then, most of our lands are not suitable for horticulture.

As for arable crops, there are good reasons why the wheat that is used to make bread comes from Australia. And to the extent that high-protein crops become the foods of the future, then they will largely be grown on fertile Northern Hemisphere soils rather than our phosphate deficient soils. Yes, we can grow these crops for our own use, but we may need tariffs to compete with many other countries. It is not where our competitive advantage lies.

Despite these cautionary notes, I do believe we can do a lot better than now with a range of crop-based beverages and also various nut crops. Other crops such as manuka honey can also be a valuable part of the export mix. However, that still leaves a great deal of land for which the most profitable land-use will be pastoral.

Current Government policy is to convert increasing amounts of pastoral land to forestry.  I choose to not argue with that here. But I do note that carbon credits from forestry will not provide export income. Under current settings, we will need all of these and more from within the country just to balance the carbon dioxide from big-city living.

Currently, I wonder whether our Government is losing sight of the importance of exports. Should this be the case, then ironically, it will be the urban community that suffers even more than farmers.

If exports decline, then foreign exchange rates will drop to levels seen briefly during the 2008/9 financial crisis and which were systemic during the late 1980s and the 1990s. If that occurs, export-based agriculture will become profitable again for those who found a lifeboat and are survivors. But Kiwis wanting to do their OE will find they cannot afford it, Pharmac will have insufficient money for the purchase of medicines, and petrol will be a luxury that average people cannot afford.

So, in that environment the sun will not set for agriculture. Or if it does set, then it will eventually come up again after a long winter night. But for the rest of the community, that winter night might be a lot longer.

Consequently, as a society we need informed discussions as to the braids that need to be followed if agriculture is to remain vibrant.  Agriculture needs transformation but it does not need destruction.

If agriculture goes into systemic decline then it will be too late for the broader community. There are big lags in the system between decisions and effects.

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About Keith Woodford

Keith Woodford is an independent consultant, based in New Zealand, who works internationally on agri-food systems and rural development projects. He holds honorary positions as Professor of Agri-Food Systems at Lincoln University, New Zealand, and as Senior Research Fellow at the Contemporary China Research Centre at Victoria University, Wellington.
This entry was posted in Agribusiness, Dairy, Land and water. Bookmark the permalink.

12 Responses to The sun must never set on New Zealand’s agriculture

  1. Asher Davies says:

    Always love your analysis Keith. By far the best dairy commentator in either NZ or Australia

  2. John Martin says:

    An excellent analysis of where our international economic advantages lie.

    In relation to pastoral farming, from what I have read in various wise books and publications, one of the most important things we can do is reduce, or totally eliminate the reliance we have of oil based fertilisers, pesticides and herbicides used in the farming sector. They either kill or substantially reduce the microbes and worms so necessary to create deep humus and naturally nutritious plant growth. They cause soil to compact and create the need for more and more chemicals to make the compacted soil soil produce fodder for animals and food for us. The food produced is less nutritious, and when it rains the compacted soil does not absorb the water, so it, together with the surplus chemicals get washed into waterways and are a major cause of pollution.

    None of this is news for you, Keith, but it may be for some of your readers. The problems mentioned are not news to the world at large. Many countries have banned Round Up because of its destructive qualities (eg Holland – a very advanced agricultural country, and much of South America…and the EU may well do so). The USA has known for decades what happens when soil becomes exhausted and waterways polluted with chemical runoff. Some references to interesting books and publications that cover these matters is at the end of this note.

    Pastoral land with deep humus creates bigger carbon sinks than trees can, in a much shorter period of time. The sinks so created can absorb more greenhouse gases than the cows create, resulting in a resource than can absorb greenhouse gases from other sources. Deep humus absorbs much more water than compacted land which reduces or eliminates runoff, and because what run off there is is not laden with chemicals, pollution of waterways is much reduced or eliminated. The microbes in the deep humus prosper with cow dung, enriching the soil and feeding plants (and hence humans) with nutrient rich food. Cows belch as much as 35% less because the food they eat is easier for them to digest, which further contributes to reduction of greenhouse gases in the atmosphere.

    There is nothing new in the above. Good keen, conscientious farmers already practice what is generally referred to in NZ as “Biological Farming” In the USA it is more commonly referred to as “Restorative” or “Conservation” farming. It produces organic food that is as nutritious as it can be. It is also proven that with out all the expensive oil products required for modern farming (which include fertilisers and pest control chemicals), Operational costs are lower, making smaller farms more viable and profitable than the larger operations required to to get the benefit of scale required in modern farming.

    Here are some disturbing facts relating to modern farming since WW2:
    * The nutritional value of some foods has reduced by as much as 70%;
    * The rate of cancer has increased from 1 in 100 persons to 1 in 2;

    As Dr. Christine Jones comments: “Its a no-brainer that chemicals that will kill bugs will also kill us” (all be it slowly – my comment)

    …..and here is an encouraging estimate from a scientist (Christine Jones – see below) in Australia – if only 2% of Australia’s arable land was converted to biological farming, carbon sinks would be created capable of sequestering all of Australia’s greenhouse gas emissions…..The Australian government know this but has done nothing about it.

    References for interesting reading are:
    * http://www.amazingcarbon.com/PDF/Jones_ACRES_USA%20(March2015).pdf
    * Cows Save the Planet (Judith D Schwartz)
    * dirt – The Erosion of Civilisations (David R Montgomery)
    * Growing a Revolution – Bringing our soil back to life (David R Montgomery)

    Googling David Montgomery will yield visual and audio presentations that short circuit reading to get the basics.

    A final comment relates to horticulture…open tilling of land does nothing for sequestering greenhouse gases – quite the reverse. If land is not fully covered with vegetation, any carbon sinks that may have been there are released to the atmosphere. Also conventional horticultural practices cause vegetarians to be exposed more completely to more poisonous chemicals than otherwise – unless their food is organic – and simple organic food doesn’t necessarily mean that the farmer has got nutrition right.

  3. Keith Woodford says:

    From DavidG

    Keith,
    I like your articles and read them with avid interest. In the piece, referenced in the subject, you indicate that New Zealand is unlikely to compete in world educational circles. Just for fun, I’d like to point out examples of New Zealanders of my generation with the capability to punch above their weight in global scientific and technical fields.

    1) Dan Walls
    One half of the Nobel Prize in Physics 2005 was awarded to Roy J. Glauber “for his contribution to the quantum theory of optical coherence”.
    What people don’t generally know is that Dan Walls, if he had not died prematurely in 1999, would have most certainly been one of the Nobel recipients (the Nobel is never awarded posthumously):
    https://en.wikipedia.org/wiki/Daniel_Frank_Walls
    Dan and his Hamilton/Auckland teams did seminal work in optical coherence in New Zealand.

    2) Vaughan Jones
    There is no Nobel Prize for mathematics. The equivalent is the Fields medal. In 1990 Jones was awarded the Fields medal for his work on von Neumann algebras and knot polynomials.
    https://en.wikipedia.org/wiki/Vaughan_Jones

    3) Roy Fielding
    Roy Fielding is a New Zealander with a Maori mother and an American father.
    Roy is the principle author of many of the core specifications of the modern Internet (HTTP, URI, cacheing, etc.) and participated with Tim Berners Lee on HTML etc..
    https://en.wikipedia.org/wiki/Roy_Fielding
    His thesis: ‘Architectural Styles and the Design of Network-based Software Architectures’ stands as the architectural specification of the Internet.

    4) Phil Yock
    Probably the most interesting example … brilliant mind, laid the foundation for gauge theory and the “Standard Model” of particle physics and later did seminal work on gravitation lensing and the discovery of exo-planets. Was completely unrewarded for these insights with a career clouded with controversy.
    https://www.researchgate.net/profile/Philip_Yock/research

    I think if the history of the invention of radar was documented, the role of New Zealanders in inventing radio astronomy would yield a number of other candidates: https://en.wikipedia.org/wiki/Elizabeth_Alexander_(scientist)

  4. nigel64 says:

    Great article Keith. I worry that Climate change/carbon policy is coming from deeply siloed minds fixated on above-ground carbon in trees.

    If soil carbon could be included there’d be an inbuilt incentive to achieve the highest soil carbon (with scattered trees/shrubs as part of the solution and helping provide the aesthetic sought by tourism) – with N leaching and P loss dramatically reduced through greater soil and pasture husbandry. Soil carbon residence times are also much longer with some becoming near-permanent.

    Current climate change/carbon policy (re sequestration) seems to come from from deeply siloed minds fixated on above-ground carbon in (huge areas of corporately-grown) forest.

  5. Tom Walker says:

    There was one option for the NZ economy that you never mentioned Keith,that being the discovery of a major oil or gas find in one of our unexplored off shore basins but unfortunately this option has even more political headwinds than Dairy farming!….exploiting some of their mineral wealth seems to have worked out OK for Norway though?

  6. Pingback: Rural round-up | Homepaddock

  7. Danielle Appleton says:

    Hi Keith,

    I’ve enjoyed keeping an eye on your articles ever since reading “the Devil in the Milk” …while I was running a small A2 milk processing plant – interesting stuff!

    As you say “Given our isolation, we are never going to be a world-leading manufacturing centre. We are never going to be a world-leading financial centre. And we are never going to be a world-leading centre of education.” The tyranny of distance means that we also face headwinds when selling bulk commodities (WMP, SMP, AMF etc…) to whoever will take them. Not to mention the tariffs.

    I would like to see NZ focus on using our agricultural heritage to flex our pre & post-harvest muscles – and sell that Intellectual Property to the world. Our geographic isolation means IP is a good way to go – a damn site cheaper to move than milk powder. Having NZ become of the leading agri & food-tech centres of the world. Not through making bulk milk products, but through helping the world feed their populations better food, in a smarter way. The question then becomes not “what do we grow – pasture or crops” but “how do we solve ‘food problems’ and then develop & commercialise this IP”. This opens up more interesting opportunities, such as what if we take some of our dairy technologists & scientists and focus them on improving alt-dairy products?

    Isreal has a challenging climate, and a small population (8 million) but seems to do Agri/Hort/Food-tech particularly well. Perhaps we could take a cue from them?

    Interested to hear what you think.

    • Keith Woodford says:

      Danielle
      International commercialisation of agricultural IP is challenging, particularly when our farming environment here in NZ is so different to most of the world. I am struggling to identify the IP we would sell.
      When I was a a student, Lincoln University had a whole department of agricultural engineering. Now there is just one lecturer. What does that tell us?
      I am a shareholder in a very small agricultural technology company and it is not an easy road. One needs deep pockets to make an impact.
      As for those Israelis, yes they are indeed very skilled in developing technologically advanced water-efficient farming systems. Thereagain, the role of the Jewish race in all science fields, and also in many other fields, is remarkable. Lots to think about there.
      KeithW

      • Danielle says:

        Thanks for your response, Keith.
        Food for thought, I’ll have to look into this more.
        Deep pockets are indeed needed, especially when it comes to patents etc… and very difficult to raise that kind of money in NZ, although it has been done.
        Will read your future posts with interest – Danielle

  8. Greg says:

    This will be unpalatable to many, but it needs saying.

    NZ’s land has long been ridiculously overpriced for the modern global economy. As a result of this, New Zealand’s farms have far too little capital stock (productive structures and equipment, systems and intellectual property [brands and the like]) — farmers simply cannot afford both land and capital investment.

    Steep declines in both the exchange rate and in land values, along with taxation reform to bring land into line with other assets, are all necessary before we can start to create a business climate in which the necessary investment can take place. Unfortunately it won’t be NZers doing the investing when the times comes.

  9. John Beresford says:

    A very well thought out & argued argument.
    This article could do easily apply to UK. We ignore at our collectives peril!

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