Is there any future for New Zealand agriculture?
Bearing in mind that more than 20 years have passed since David Lange declared farming a sunset industry in New Zealand, answering this question requires some historical context
While it is possible to wax nostalgic about a golden age of New Zealand agriculture in the '50s and '60s, it is important to remember that this particularly fortunate period in our history was the product of some highly anomalous circumstances mainly due to our privileged trading relationship with the United Kingdom.
New Zealand's agricultural fortunes at the time were premised mainly upon expanding the productivity of our pastoral sector by pursuing the maximum volume of product, with the minimum processing cost, to supply a captive marketplace.
The success of this approach was tarnished by a series of crises, including the loss of privileged access to the UK, inflation, failed subsidy regimes, and then the rural downturn of the 1980s as agriculture was deregulated.
The golden era is well and truly gone, although a certain generation of farm leaders, politicians and science managers who were raised at that time continue to influence management strategies.
What is frustrating about our currently varying agricultural fortunes is that despite some industries finding a way forward out of past crises - some with enormous success - so many remain wedded to the old formula that raising productivity, reducing processing costs, and escaping compliance costs will see them right.
Sometimes we need to look across the fence (or, in this case, shelter belt).
In the early 1990s, the New Zealand kiwifruit industry was bankrupt.
Multiple exporters engaging in vigorous competition for supply and competing in the market on nothing but price had driven down the returns by around 70% over ten years.
Kiwifruit producers in the 1980s desperately tried to increase their productivity and deployed an intensive production regime based around the world's highest rate of pesticide deployment on kiwifruit.
At the time, the industry was doing exactly as they were advised by competing at every level to encourage efficiency in the industry.
The problem was that by 1991 the industry was bankrupt.
It is a familiar story for some industries even today.
But not for kiwifruit.
In my opinion, the kiwifruit revolution that emerged in the 1990s is our most significant example of a sustainable future for New Zealand agricultural exporters.
From 1994 the industry rebranded as Zespri International Ltd completely retooled the production, processing and marketing of kiwifruit from a productivity-based regime into an industry that primarily produced particular qualities in their kiwifruit.
The most significant adjustment, in addition to the new gold variety and redesigned branding around the Zespri label, was the active marketing of identifiably superior qualities of their fruit relative to their competitors.
Kiwifruit producers now comply with a mind-boggling set of nearly 200 measurable quality criteria from taste and appearance, to food safety, environmental best practice and worker welfare.
While such a highly measured and controlled production system would have some of our farm leaders screaming compliance costs, the results have been dramatic.
Zespri has used its quality-based production system to secure supply contracts with the largest and highest-paying supermarkets in Europe, Japan and the United States.
Between 1996 and 2006, the productivity per hectare of the average kiwifruit orchard rose only slightly, but the same number of producers earned nearly four times the revenue!
So, when you next ask yourself if your future as a farmer is secure, ask yourself one initial question: is my industry asking me to produce quantities or qualities?
- Hugh Campbell
• Associate Professor Hugh Campbell is a director of the Centre for the Study of Agriculture, Food and the Environment at the University of Otago. hugh.campbell@otago.ac.nz