Government’s food and fibre reset report lacks a core

The Government’s new food and fibre reset document is PR aspirational fluff. The hard work remains to be done

On July 7 Prime Minister Jacinda Ardern released the Government’s document “Fit for a Better World – Accelerating our Economic Potential”. The associated  press release  from the Beehive says that it provides a 10-year roadmap for the food and fibre industries’.

At the same function where this report was released, Agriculture Minister Damien O’Connor released a companion document from his Primary Sector Council of chosen industry leaders.  That document is also titled “Fit for a Better World” but lacks the title extension about ‘accelerating our economic potential’.   This second document is indeed a different document, singing from the same song-sheet, but with considerably different material. Very confusing indeed!

My focus here is on the Government’s version of the report because this is the one that has been signed off by Cabinet. Minsters in attendance at the release also included Stuart Nash and Shane Jones.

I downloaded the document and worked my way through the first 24 pages, but my computer refused to proceed any further. My initial thought and frustration, now that I had worked my way through all the introductory fluff together with six historical case studies, was that I was ready to get into the core of the supposed roadmap. Then it dawned on me that I had indeed read the full document. This was it!

Before I take up some resultant criticisms, I first need to state that there is good news in the document for all of those who believe in the importance of the food and fibre industries. The Government is indeed acknowledging that the food and fibre sector is “vital to New Zealand’s economic recovery”.  The Prime Minster also stated that the primary sector is “a huge part of our economy and our brand”.

Minister O’Connor stated that he would also soon be releasing another new report that “sets the path for future growth of our strong-wool sector [ and that “this will also be a key part of delivering our Roadmap”.  Really? The wool report was indeed released  three days later and it was the same aspirational high-level fluff.

If strong wool does have a future it will be as building insulation, but I saw no specific mention of that. Mainstream adoption requires new technology yet to be developed.

Getting back to the ‘Fit for a Better World’ report, Minister Nash stated that “sustainable aquaculture presents massive growth potential”, and that the sector would grow five-fold to $3 billion by 2035.   Minister Jones added that forestry had opportunities to develop domestic and export markets for more sustainable products.

In terms of the overall theme of the song-sheet, it was all good news. There were lots of words about sustainability but there was no mention of any specific new environmental regulations. The TV soundbites indicate that the assembled industry leaders were supportive even if not necessarily enthused.

The stated intent is that export earnings will increase by a cumulative $44 billion by 2030. What was less clear in media reports is that this is the aggregate additional income over the 10-year period, with the additional annual income having grown by $10 billion by 2030. That represents an annual growth rate of just over 2% per annum, although the communication spin doctors did not actually say that.

I reckon that growth of around 2% per annum may well prove to be realistic. But if we want to grow at that rate in real terms after allowing for inflation, then some hard work is going to be needed. On a per capita basis, that will still be close to a gain of zero if New Zealand goes back to pre-COVID population growth rates.

In another five years when we look back and can see the first two decades of this 21st Century in better perspective, we are likely to recognise the extent to which food and fibre industries have underpinned the New Zealand economy for the last 20 years. During this period there was a strong upward trend in global prices, measured in US$, for most of the products that New Zealand produces.

Much of the urban community does not understand the reasons that living standards increased, at least as experienced by middle and upper-income demographic groups. Rising export prices plus increasing volumes led to much stronger foreign exchange rates than in the prior two decades.  All consumers benefitted from this one way or another.

Back in 2015 when I was writing for the Sunday Star Times, I wrote a series of articles exploring where New Zealand’s future food and fibre income might come from.  My thinking was that some of the big gains we had made in dairy, wine, kiwifruit and seafood, with much of this stimulated by growing trade with China, would be challenging to replicate. These articles are archived at my own website https://keithwoodford.wordpress.com.

I have been positive about kiwifruit for many years and I remain positive. Kiwifruit has to be one of the greatest New Zealand success stories, built on breeding and consequent ownership of new varieties.  There may well be bumps along the way but the future continues to look bright.

I have also been intrigued for a long time by the prospects for mussels and other shellfish. It is clear that further development now depends on the success of offshore fisheries. The environmental limits have largely been reached in relation to enclosed waters.

I also remain positive about the future for dairy, but considerable transformation of that industry will be needed. I am sure the industry of the future is going to look very different to the current industry and I remain of the perspective that major parts of the industry are locked in the past. I will have more to say about that going forward.

I am cautious about forestry. The current Government policy allowing foreign investment for forestry is distortionary. It results in New Zealand earning up-front income from the sale of the land, but the subsequent income flows from sale of carbon credits will flow straight back to the foreign owners. It really is a case of selling out the future.

As for new uses of timber in building and consumer products, that could be exciting. However, New Zealand cost structures are such that the value-adding will be done overseas except for any products used in New Zealand. Also, once China’s big infrastructure projects eventually slow down, the need for New Zealand logs to be used in formwork over there will reduce. How will New Zealand’s timber then be used?

What I had hoped for in the documents proclaiming a roadmap towards industries ‘fit for a better world’ was genuine strategic leadership. Instead, the documents are full of aspirational fluff. It’s largely spin-doctor stuff. The hard work of finding the new technologies and associated pathways is all for the future.

However, it is always nice to leave with a positive message, and so I will do that.  The good news is that with tourism in big trouble and the aluminium smelter apparently heading for closure, there does seem to be increasing recognition from Government as to the role that the food and fibre industries must continue to play as the backbone of the New Zealand economy. That seems to be a step forward.

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, forestry, horticulture. Bookmark the permalink.

6 Responses to Government’s food and fibre reset report lacks a core

  1. Tom Walker says:

    Hi Keith,
    In answer to this question.. ”Also, once China’s big infrastructure projects eventually slow down, the need for New Zealand logs to be used in formwork over there will reduce. How will New Zealand’s timber then be used?”

    I just sourced 20,000 feet for an Australian bed manufacturer from Foshan made with NZ pine.Asian rubber wood was the more expensive option but our client in Australia was happy with the quality of the NZ pine feet (which did look good with a stain finish).Also the huge Chinese domestic market seems to prefer natural wood drawer liners instead of MDF etc so another market where NZ pine is used.This is of course all pruned clear wood not the cheaper grade pine that goes into formwork, so maybe a good clue for our foresters not to neglect their pruning!

  2. Keith Woodford says:

    Thanks Tom,
    Can you help me by explaining the unit of ‘feet’ as applied here?
    I don’t think many of our forests are pruned these days.
    Do you think the Chinese timber manufacturers can remain competitive in the export markets as China’s wage costs increase with increasing living standards? I suspect the answer is ‘yes’ at least for the foreseeable future.
    Keith W

  3. Tom Walker says:

    Hi Keith,
    The ”feet” are for the bases of beds made in Australia sourced by me from a wholesale furniture accessory market in Foshan.They come in a myriad of styles in either wood,metal or acrylic and my guess would be that most bed,sofa manufacturers around the world would source their accessories from China..which leads to your second question,I once met a sofa factory owner at a furniture fare from Malaysia who told that even though labour costs were lower in his country it was hard to compete with Chinese manufacturers because he had to import all of the textiles and accessories from China for his sofa`s.

    With all of the talk of shifting manufacturing from China it is going to be hard to replicate the cluster hubs found here with excellent infrastructure and a now skilled workforce in a low labour cost country…you have to drive around here in the Pearl River Delta to grasp the scale of it.

    As for NZ Radiata pine,for solid wood furniture and accessories it is part of the mix at the cheaper end here and just recently a new restaurant close to where I live was fitted out with NZ Radiata tables and stools..easy to recognize with my farming background!..I am not sure about the future of this wall of un-pruned timber though?But I do see plenty of building still going on but maybe not at the same frenetic pace as the past.

    • Keith Woodford says:

      Thanks Tom,
      As always your comments are insightful.
      Currently, we are reading some reports about extensive flooding in the Yangtze River. But it is hard to get a perspective on that through our media.
      Any thoughts?
      Keith

  4. Tom Walker says:

    ” But it is hard to get a perspective on that through our media.”..ain`t that the truth Keith!

    I read all sorts of alarming reports in the Western media about the floods in central China,laced with ghoulish comments of course about the 3 gorges dam collapsing..showing how quickly the new cold war has been instigated.

    For the less sensationalist view, my Chinese friends here tell me that there has been four floods in the recent past bigger than this one in that region and that the authorities have released water into low lying areas to relieve the pressure.Being China this might affect a couple of million people but insignificant in the greater scheme of things.

  5. Pingback: A kinder, greener, fairer economics to replace neoliberalism? Questioning New Zealand's chances of making the move - NZ Farmer

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