Creating primary sector's edge

Bruce Muldrew (left), general manager operations of Realcold Milmech (Millers Mechanical) in Dunedin, observes engineer Ken Brogan operating a robot. The company is collaborating with Industrial Research Ltd and meat-processing companies in the development of lamb-processing technology. Photo supplied.

Many in the primary sector were not surprised to hear recently that New Zealand farming has about five years before the developing world eclipses us in becoming the lowest-cost producer of agricultural commodities.

This was the verdict from accounting and advisory firm KPMG, which in its inaugural Agribusiness Agenda report said the looming world food shortage meant formerly marginal land in South America, some of the former Soviet Union, Mongolia and western China as well as large tracts of Africa would become profitable for large-scale, intensive farming.

The cost of labour and land in these developing regions is much lower than in New Zealand, and our farmers have relied on more modern, efficient methods of production that have more than compensated for the advantages of these competitors.

A more efficient system of production has been achieved largely through advances made by our world-class agricultural science research and development.

The work of scientists in areas like animal genomics has increased the reproduction rates of the national sheep flock, and significantly improved the productivity of farming.

Despite this, the aforementioned global market conditions mean that producers in developing countries are quickly closing in.

The likes of Fonterra and PGG Wrightson subsidiary NZ Farming Systems Uruguay have countered with a move to producing agricultural commodities in developing countries and, in doing so, combine access to cheaper land and labour with Kiwi farming know-how.