New Zealand’s Grass Could be Greener

 

 

Mountain landscape with grazing sheep New Zealand

Last month at the New Zealand Food Awards in Auckland, Trade Minister Grosser referred to agriculture as “the Silicon Valley of New Zealand”. Indeed, in stark contrast to the drought-ridden brown ranches of California that I usually see, driving through the pastures of the Bombay Hills brings cows, sheep and goats devouring lush grass irrigated only by nature’s rainfall. This small island nation of 4.5m people produces food for 40m, and its dairy industry is the driving force in global prices for milk solids. Just past the Bombay Hills on the Waikato Expressway sits a massive new dairy processing facility built by China’s largest dairy company. The growing markets of China and the rest of Asia continue to look to New Zealand as a key source of green, clean, and premium food and agriculture products. The Bombay Hills and Waikato are without doubt an impressive display of New Zealand agriculture prowess.

However, the grass may not be as green as it looks in New Zealand. Milk prices are quite low, and the end of EU dairy quotas next spring will bring more dairy supply from Ireland, France and others online. The Chinese are also making investments to increase European dairy output. Additionally, the farming population is getting older, and younger workers are not as keen to take on farming as a profession. Increased foreign investment into land and imported foreign workers puts further pressure on the culture of small farming communities. Many new dairy farmers are simply “share milkers”, a term that is similar in concept to share cropping in the US (but doesn’t carry the same historical negativity). On the food side, the impressive, five-year-old Massey University Albany Campus’ Institute of Food, Nutrition and Human Health is doing tremendous work in its postgraduate program and has had 125 students—but not one New Zealander. All of its students have come from overseas.

New Zealand’s great grass has a double-sided blade. The rich production environment afforded New Zealand has provided it with a natural competitive advantage. Yet New Zealand finds itself ill-prepared for potential crisis and opportunity related to the changing water situation domestically and abroad. Many of its agricultural technologies are unfit for export because they fail to take into account overseas market conditions where water is not as abundant. With such historically steady rain in New Zealand, Kiwis have seen little need to invest in water capture infrastructure, so over 90% of fresh water flows straight into the ocean. Now domestic rainfall is varying more and some New Zealanders farmers find themselves in unfamiliar territory. One Kiwi farmer claimed “drought” conditions after a historically wet region went without water for just one twenty day period. Lastly, run-off pollution is also starting to become more of an issue.

The R&D at the Waikato Institute, Plant & Food Research, The University of Auckland, and Massey University is extremely impressive. However, the Kiwis have had little success creating big technology companies in this space, in great part due to the lack of entrepreneurs willing to develop Kiwi technologies into world class companies. It is well known that many Kiwis strive only to enjoy the great lifestyle New Zealand offers. Success for most is no more than getting “the three Bs”- a boat, BMW and beach house. Those who strive to do more and succeed are often undercut by a small town, scarcity mentality referred to locally as “tall poppy syndrome”.

The New Zealand Food Innovation Network’s shared commercial kitchen next to Auckland Airport, The Food Bowl, is an amazing asset that showcases New Zealand’s commitment to investing in food innovation. Yet, except for smaller sector initiatives like the New Zealand Wine Growers, no coordinated private industry association promotes New Zealand’s jewel of food and agricultural products. (In contrast, even the much smaller New Zealand telecom market has its own private sector association.) There were very unique Maori food products and some amazing food entrepreneurs showcased at last month’s New Zealand Food Awards, but New Zealand was one of the few major food producing countries without a pavillion at the premier Fancy Food Winter Show in San Francisco earlier this year. (Even debt-straddled Greece and the Philippines had pavilions). This small country of 4.5m could do a much better job coordinating and cooperating to realize its full potential as a food and agriculture innovator on the global stage.

New Zealand has all of the ingredients to fulfill Minister Grosser’s vision of the country as “a Silicon Valley in agriculture”. But to succeed in Silicon Valley these days requires continuous innovation and linking up to a more and more connected world. The reality to those who understand Silicon Valley is that what makes it special is the mindset more than the place. Its secret to success is not really technology but people who, by and large, embrace a culture of openness, sharing, trust, and networked collaboration resulting in an agility to adapt to opportunities as they arise and scale up to a global level.

The challenge for New Zealand in the food and agriculture space is whether they will simply enjoy their natural advantage and rest on their laurels, or whether they will adapt to the new realities of what is required to be a global leader in the food and agriculture sectors.