Food and fibre sector boost needed to support NZ’s ageing population

With an ageing population placing increased strain on New Zealand’s public services, the country must earn more to maintain current living standards in the years ahead, a new discussion paper has found.

Released today by the New Zealand Institute of Economic Research, Pathways to prosperity: Capturing more of the value of our  exports for New Zealand calls for “investment and policies that do not demand immediate results” to boost productivity in the food and fibre sector.

The sector, which includes agriculture, horticulture, forestry, fishing and associated processing, accounts for 80% of New Zealand’s goods exports and is one of the main sources of income and tax revenue that fund public services.

But it needs to earn more, says Peter Davis, Chair of the Helen Clark Foundation, which commissioned the discussion paper.

“This country faces a key challenge in providing an ageing population with the quality healthcare, education and superannuation New Zealanders rightly expect,” Davis says.

“New Zealand clearly needs to earn more as a country in the decades ahead to meet these expectations.”

However, many New Zealand firms do not have the skills and scale necessary to compete effectively in unforgiving global markets, the paper’s authors Todd Krieble and Bill Kaye-Blake say.

“We need to ensure we’re doing everything we can as a country to support the sector to grow its productivity and earn more from exports without putting more pressure on our people or our environment.

“The good news is that our paper finds clear pathways New Zealand can take to achieve this.”

Pathways include developing a more skilled workforce; consumer-driven marketing and product development; better investment, especially in processing; improving management and governance; and strategic collaboration to create scale and larger investment pools.

The paper’s authors also identify key challenges to achieving greater productivity in the sector, which include lower levels of investment and technology in food and fibre processing compared to similar economies, and the risk-averse nature of firms (sometimes resulting from organisational structure, such as co-ops) and the mindsets of senior managers and directors.

Krieble and Kaye-Blake suggest “time and patient money – that is, investment and policies that do not demand immediate results” could enable the sector to overcome these disadvantages.

“Improving productivity will be hard, but maintaining the status quo will leave us with a middling economic performance and increasing anxiety about how New Zealand will pay its way in the future,” they say.

“The sector’s challenges, especially in processing, have existed for decades and the underlying issues are not amenable to quick fixes.

“We hope this paper provides a jumping off point for further discussions about the strengths of the sector, and how it can adapt and grow despite the challenges of the 21st Century.”

Source: Helen Clark Foundation


Author: Bob Edlin

Editor of AgScience Magazine and Editor of the AgScience Blog