What has been the broad scope of your discussions and meetings in India?
This is my first time in India, and I’m representing New Zealand and our food and fiber sectors. I’m here to learn and understand more about India, as well as share New Zealand’s story to help build India’s understanding of New Zealand. We are exploring ways that we can work together and learn together through collaboration in many different ways.
We have just been up in Shimla, meeting with the team that is working on apple production in a collaborative project between New Zealand and Himachal Pradesh. We were hosted at a research station and met Indian scientists who are doing some great work around apples.
In Delhi, we have met with a number of people and organisations, including a productive meeting with the Secretary of the Department of Animal Husbandry and Dairy. We will be visiting Gujarat and Maharashtra as well, to talk to people working in the food and fiber sector.
New Zealand has a unique agricultural-based economy. Give us an overview of your farming ecosystem.
Most of our farms are family businesses and often, but not always, those family farms are intergenerational, though there are people that are starting as first-generation farmers.
We had a major reform of the agricultural sector in the 1980s, where we were previously heavily subsidized. Those subsidies were removed in response to some external shocks that New Zealand was facing, which put quite a bit of economic pressure on us. So the country just couldn’t afford to keep subsidizing agriculture. That was the start, really, of forming the food and fiber sector of today.
We have continued to evolve since then. Our farmers don’t receive any subsidies. So, we are focused on being innovative and creative about how we run our farming businesses, and that’s across all our different sectors, be it horticulture, dairy, sheep, arable, wine and so on.
Our success is due to all the parts of the food and fiber ecosystem working effectively: academia, science research and development, farming businesses, the service sector (all those businesses that provide services to farmers), the processors, packers and exporters, freight and logistics, the industrial goods bodies that represent farmers, work for farmers and engage with the government, government ministries/departments and our international network of diplomats and company representatives offshore.
When the New Zealand government removed subsidies, it did impact the farmer. Were there no protests? And then there is also the question of sustainability. How did you manage to overhaul it?
It wasn’t easy! It created a lot of anxiety and people had to rethink and reconfigure how they financed and ran their businesses. For example, in the sheep sector, they identified animals that weren’t productive and, over time, focused on animals that were very efficient, which had several benefits.
People could farm successfully with fewer animals that were more efficient, producing more meat and milk.
So, the population of sheep from when we had subsidies to now is significantly lower, but the amount that the sheep sector is producing has only declined negligibly. So it has brought about production efficiency, alongside environmental and climate benefits such as a reduction in methane emissions per kilogram of product that we’re producing.
What you mention is interesting. By removing subsidies in agriculture, you became more efficient. How?
Yes, we became more efficient and much more business-focused. We know that we cannot run a profitable business unless we look after our environment, our people, and the economy – all three together.
The environmental benefits of removing subsidies were huge. There were some social impacts that were a bit difficult to navigate. Those who could not continue to farm after the removal of subsidies went into other areas of the ecosystem, using their skill sets as farm contractors, researchers, veterinarians, seed specialists and agronomists to take a few examples. For the food and fiber sector to be successful, it needs all parts of the ecosystem to be thriving.
Most of the advanced countries provide heavy subsidies, including the USA. In contrast, New Zealand does not provide any subsidiaries to its farmers and thrives on a market-based economy. Could you explain?
We are a very open trading nation. When you look at subsidies globally, there are countries where more than 40% of farming income comes from subsidies. In New Zealand, it is less than 1% and it is very rarely money in the hands of the farmer. Normally it will go to science research and development in a partnership that leverages farmer investment in R&D through the industry peak bodies like DairyNZ to find new solutions to problems and challenges.
On rare occasions, if there has been a severe weather event, catastrophe or major business shock, the government will put money into the likes of the Rural Support Trust, which then gets in external providers who have expertise in what farmers might need.
In February, we had a major storm that affected large areas of the North Island of New Zealand, particularly Hawke’s Bay which is a major horticultural production area. So the government, through the Rural Support Trust, is helping farmers in that area navigate such a difficult situation.
How do you balance enhancing output with sustainable agricultural practices? Is there government regulation in this regard? For example, how much fertiliser are you allowed to use?
Our natural ecosystem, our natural world, and our natural assets are ‘taonga’, which in Māori means very precious.
We have a relationship of respect and reciprocity with our natural world. We know that we have to look after it and if we’re taking it from it, we have to give back to it. Over the decades science has underpinned and informed the way we work with our natural world — our soil, water and biodiversity. So, when it comes to soil, the amount of fertiliser we put on will be subject to soil tests that we do, and pay for ourselves as farmers.
We also use feed budgets or nutrient budgets to understand, using models, how much we’re taking out and therefore how much we need to put in. We can use those models to project what our production is going to be and therefore figure out how much nutrient needs to go in. There are guidelines now on how much nitrogen you can put into your soil. So there is a role for the government in regulating some parameters around that.
New Zealand has become a leading exporter of agricultural products in a short span of time. How did you manage to do that? Was there any incentive from the government?
The real incentive came when the government removed the subsidies. Also, there was a decade of shocks that really made us rethink the way we shaped our industry and exported to the world.
Prior to that, we were exporting over 70% of our products to the UK. And then the UK joined the EU, which meant that our access to the UK market suddenly changed completely. That forced our exporters to reconfigure their market strategy, figure out how to build new relationships, and reconstruct and develop new value chains and new markets.
Now we have over 150 markets around the world to which we supply food. We’ve had to work on figuring out and meeting the parameters for those different and diversified markets, right from the flavor profile of the consumers to the correct certification for the products.
The role of the government in all of this has been to help with trade agreements and to put in place robust government-to-government standards and ways to do business so that for every country that we’re exporting to, it is easy for our Exporters as well as importers and customers to access the products. So we have constructed our whole industry to be market-led and market-focused — right through to the farmer.
How do you look at the Indian market in terms of opportunities?
I am here to explore that and believe that there are enormous collaborative opportunities, be that in climate change mitigation or food production or research. Between New Zealand and India, the world is our oyster. It’s just a matter of identifying what’s going to work best for both of us. We have got some great relationships which we want to continue to build on.
How open are you to embracing Indian agricultural products in your country?
We have a strong Indian population in New Zealand and they would love to see more of the food from their homeland coming into New Zealand. Effective this week [second week of May], Indian mangoes are making their way to New Zealand. We take pride in the fact that we are an open economy, and we also take pride in how we look after our natural biodiversity. We’ve just got to work through some of the challenges around that, to make sure we’re looking after New Zealand, and likewise, India works to look after Indian concerns. That’s part of building our relationship and we would love to see more, doing everything we can to look after each other along the way.