Fieldays 2024: Food and fiber sectors must restore value to farmers – KPMG

KPMG’s Ian Proudfoot says these sectors offer huge opportunities, but you will need to act quickly. Photo / RNZ

By RNZ’s Monique Steele

A new report shows New Zealand’s food and fiber sectors have “enormous” opportunities ahead as long as farmers there are ready.

The consulting company KPMG published its report Today’s potential, tomorrow’s possibilities report for 2024 at Fieldays, revealing the most important and weak points of the sectors that earned $57.4 billion on exports in the year to June.

More than 150 food and textile industry leaders shared their perspectives in the report and identified what they see as their top priorities for the coming year.

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This year, world-class biosecurity was once again the top priority, followed by building on the results of the gene editing discussions and signing high-quality commercial agreements.

Many people were also concerned about employee morale due to the financial difficulties many farmers are facing, but they were also hopeful and optimistic about their own businesses.

KPMG’s global head of agribusiness, Ian Proudfoot, said there were huge opportunities but sectors would need to act quickly.

“The world is facing unprecedented volatility that is creating significant challenges,” Proudfoot said.

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“If we are to continue growing food and creating value, they need to be understood and answered.

“But decarbonization and bioeconomic models also present huge opportunities that we should pursue as quickly as possible.”

Proudfoot said the sector needed to build on New Zealand’s global reputation as a leading food producer and leader, but it was critical to bring value back to farms.

He said sustainable solutions to increase revenues and reduce costs were needed to ensure the long-term viability and resilience of the sector.

These could include farmers diversifying their incomes, for example by installing solar panels, or using digital technologies such as regenerative artificial intelligence to increase farm productivity.

“Accordingly, sustainable revenue growth does not mean constant fluctuations in commodity prices up and down, and from the roundtable discussions it appears that most industry leaders share the same view,” he said.

“This means diversifying farm income into new, sustainable revenue streams that give the farmer or grower the confidence to invest in the future of their business.”

The report said the Coalition Government had a good focus on making gene editing and biological technologies accessible, reducing red tape around resource consents such as water storage, and strengthening New Zealand’s international trade relationships.

However, it said there were concerns about cuts to government funding for research, the lack of a national food strategy, rising mental health issues and an increased focus on creating bioeconomic solutions.

It said these problems have emerged as disruptions to food systems have intensified over the past few years.

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“The global food system is progressing at a rapid pace, but there is little evidence that (New Zealand) is keeping pace with the transformation,” it said.

In the report, Minister of Trade, Agriculture and Forestry Todd McClay also acknowledged the importance of biosecurity to the sector and the economy.

“We are focusing on preparedness for issues such as highly pathogenic avian influenza, foot and mouth disease and the brown marmoset bug, and we are working closely with the sector to ensure biosecurity is front and center and strengthened on the front line.”

On agriculture, McClay said the government recognized the hard work and continued resilience of workers in these sectors – especially with soft commodity prices, high production costs, high inflation and interest rates hitting them hard in recent years.

However, he said his goal was to support farmers in running their farms.

“We are determined to increase value for farms and put more money into producers’ pockets.”

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The report also calls on industry leaders to change their leadership styles to better meet the needs and expectations of the new generation of employees.