NZ Herald Agribusiness Report - August 2023

Agribusiness & Trade

INSIDE

East Coast catastrophe

Toolkit for reducing emissions

Fonterra’s sustainability focus in China

Zespri has some sugar to offer

India and NZ

The2023KPMGAgribusinessAgendawaslaunchedattheKPMG Agribusiness LeadersBreakfastontheopeningdayofFieldays —an eventthathasbecomeaninstitutionforthepowerbrokerswhorun NewZealandfoodandfibresector.

KPMGsurveyedagribusinessleadersandinfluencerstounderstandprioritiesforthe organisationstheyareinvolvedinwithinfoodandfibresector.Thesurveyaskedleadersto giveeachof42statements ascoreoutof10indicatingtheitemwas apriorityforthem.KPMG received105validresponses.

‘Futuresthatdrawoninnovation’

KPMG’sIanProudfoot(left)has writteninpast AgribusinessAgendas thatthereis abeliefthefoodandfibre sectorinNewZealandmustbe inherentlyorientatedtothefuture ratherthanbeingfocusedonthe present.

“Weshouldbechallenging ourselvestoenvisionfuturesthat drawoninnovation,bothexistentand potential,topaintboldpicturesof whattheindustrycouldbein10,20 or100years,”saysProudfootinthis year’sreport.

Hesaysfuturescenariosshould notalwaysbecomfortable,butthey shouldcausepeopletostop,thinkand askquestions.

“Theyshouldconnectwhatweare doingtodaytothefutureweaspire towardsandenergisepeopleacross theindustryastheyworkthroughthe immediatechangesweneedto make.”

Onequestionthatcameupduring theKPMGsurveyandaccompanying roundtableswaswhetherthesector hasbeenboldenoughinarticulating

InsideAgribusiness &Trade

theindustry’sfutureand“iftherewas ever atimetobebold,itisnow”.

Anemergingleader’scohort appearedtothriveinuncertaintyand ambiguityastheywereencouraged toconsiderwhatthefuturecould deliverforNewZealand’sfoodand fibresectors.

Proudfootmaintainstheopportunitytodayisforallintheindustry thatchoosetolead —notjustthose withthejobtitlesbutalsothosewho leadthroughtheiractionsintheir communitiesandthroughtheir

passionfortheirorganisations —to connecteveryoneinthesectortoan understandingofwhatthefuture couldbeforNewZealand’sfoodand fibreindustry.

Themoreclaritythatcanbe providedaroundtheextentof opportunity,themoreleaderswillbe energisedintheworldofanxietyin whichwecurrentlyfindourselves.

IanProudfootisNationalIndustry Leader —Agri-Food,andGlobalHead ofAgribusinessKPMG,NewZealand

Agribusiness &Trade

ExecutiveEditor: Fran

O’Sullivan

Writers: BillBennett, AndreaFox,TimMcCready, GrahamSkellern

Subeditor: IsobelMarriner

Layouts: IsobelMarriner

Cover: RichardDale

Online: TennessyWeir

Advertising: NeilJackson.

TheAgribusiness &Trade reportissupportedwith advertisingsponsorship fromAgriZeroNZ,Fonterra, LICandtheMinistryfor PrimaryIndustries.

Holdingontoour ‘ticketstothegame’

togoingafterthesolution.TheobjectiveistomakesureNewZealand comesoutfirst.”

Ifmethaneemissionsfromthenationalherdcanbereduced,thesector willbetterplacedasclimatechange impactsstartstobitethisdecade.

goingtousethatfourweeksoutfrom theelectiontodoquite abitofinternationaltravel,ratherthanstay domesticallyandmanagethingsback athome.”

NewZealandneedstowin whenitcomestoreducing agriculturalemissionsto maintainour“ticketstothe game”andflourishininternational markets.

That’stheviewofMinistryfor PrimaryIndustries(MPI)DirectorGeneralRaySmith.Heisexcitedby workunderwaybyAgriZeroNZ,a 50-50partnershipbetweenMPIand theprivatesector,tofundresearch tosignificantlyreducebiogenicmethaneandnitrousoxideemissions.

“Theirjobistogetonandbuild aportfolioofinitiativesthatcancorrectthemethaneproblem,”hesays. “Thisisverymuchattheleadingedge ofGovernmentandindustry.

AlmosthalfofNewZealand’s greenhousegasemissionscomes fromagriculture,whichmakesup75 percentofourgoodsexports.Since agricultureisconsideredthebackboneoftheeconomy,theimportance ofreducingmethaneemissionscannotbeunderstated,particularly,as globalcustomersaresettingambitiousgreenhousegasreductiontargets.

AgriZeroNZhas$165millionto investoverthenextthreeand ahalf years.SaysSmith,“Everyone’sgot moneyonthetable.What’sreally goodaboutthisisthatit’sdedicated

SmithsaystheSustainableBusinessCouncilinitiallycameupwith aproposaltoinvestmoreinmethane emissionsreduction.“Isaid,‘What about ajointventurewheretheGovernmentgoes50-50withtheprivate sector?’and,inthecourseof12 monthstheGovernmentbacked that.”

AgriZeroNZischairedbyBrian Roche.Theprivateshareholdersare dairycompaniesFonterraandSynlait Milk;meatprocessorsSilverFern FarmsandANZCOFoods;fertiliser producerRavensdown;andrural financierRabobank.“TheirsixCEOs, andmyselfgetalong,”saysSmith. “We’vebeenfortunatetohavea meetingofthemindsandpeoplethat actuallybuiltgoodrelationshipsthat madeitpossibletopullthisoff.”

InSeptember,Smithtravelsto Irelandtolookatoptionstheirdairy sectorisexploringformethaneemissionsreduction.

“Wecan’taffordforIrelandtogo pastusandhave alower-emissions milkproduct,”hesays.“Thegood thingwithIrelandiswehavereally goodjointventureswiththem,and thiswholespace.Andsotherelationshipbetweenourcolleaguesthere andourselvesisverystrong.”

He’llthengotoEuropeformore industrydiscussionsandChinato meetwithChinesecounterparts.“I’m

SmithcontendsthefactthatNew Zealanddairycowsaregrassfed givesthesector ahugepremium.

“Developingtheinhibitorsandproductsthatwillcomethroughthisjoint ventureandothermechanismsto offsetthemethaneemissionswill giveus amuch,muchlongerrunway.”

“Idon’tthinkpeoplearegoingto stopbuyingproteinproductsbecause there’stoomanypeoplejoiningthe middleclass.

“There’stoomuchofanincrease inpopulation.Itwillgetharderto growthingsincertainplaces.

“Butwhatwedoneedtodoto secureourfutureistodropthat emissionsprofile.”

Smithisfiveyearsintohisrole headingupMPI.Beforethathehad achallengingCEOroleatCorrections andwasDeputyChiefExecutiveof theMinistryofSocialDevelopment’s Child,YouthandFamily,anagency supersededbyOrangaTamariki.

HesaystheMinistryofPrimary Industriesroleisintellectuallychallenging.Butgrapplingwithchallenges likemethanereductionisrewarding.

“Thisisquiteprofound.Ofallthe things Iwouldhavegotdoneinmy workinglife, Ithinkthismighthave thelongestbenefit.”

● B9:Mycoplasmabovis milestone

● B10:AgriZeroNZ’stoolkitfor reducingemissions

NZneedstodropitsemissionsprofiletosecureitsfuture,saysRaySmith.

EastCoast catastrophe:

failurescreatemyriaddownstream issues,fromobviousaccessand travelinterruptionstoproblemsgettingproduceandlivestockoffproperties,hesays.

TheGisborne-foundedWeatherell Transport’smainbusinessishauling foodandproduce.Co-ownerSteve Weatherellsays“alotofpeopleare notworking”intheregion.

“Theforestryandloggingtruck guysaren’tworking.Stocktrucks can’tmove.

“Supermarketsaredoing aroaring tradebecauseeveryoneissitting aroundeatinganddrinking.The volumestosupermarketscangoup 20-40percentdependingontheday.”

“It’sturnedourlandinto porridge.”

Ofallthedescriptionsof thedevastationweather haswroughtonTaira¯whiti/Gisborne —threestatesofemergencythisyear alone —fewcapturethesoddenregion’ssituationbetterthanthatone fromGisborneMayorRehetteStoltz.

Otherlabelsfortheeconomicand structuralimpactof ayear’srainfall insixmonths,like“enormous”,“massive”,and“devastating”,havebecome such apartofthelexiconthey’reno longerhelpfultounderstandingwhat hashappened.

Eventheestimatethatdirect lossesfortheregion’smainearning sectors —agriculture,horticulture, forestry,tourismandhospitality,and smalltomedium-sizedbusinesses— fromFebruary’sCycloneGabrielle willamountto$415million-$500m doesn’tsoeffectivelyportraytheresultoftherelentlessbatteringfrom stormsandrain.

Stoltzsaystheincomeofevery businessactivity —fromfamilyownedpieshopswhichrelyon driverstravellingstatehighwaysthat havebeenfrequentlyclosed,tolargescalevegetableandfruitgrowerswho feedNewZealand —hasbeenaffected byfivestatesofemergencysince November2021,andtherecentrain that’sprovenonedousingtoomuch forthesaturatedland.

Hillsidesarestillmoving,landslidesareeverywhereandsomeof theroadsonwhichtheregion’spopulationof50,000dependareclosed, disrupted,reroutedoratriskofbeing shutatanytime.Somecommunities onthecoastnorthofGisborneare saidtostillneedhelicopterassistance.

Around20homesandproperties havebeendeclaredsoatriskfrom futurefloodingorlandslidesthattheir occupantshavehadtosurrender them.TheGisborneDistrictCouncil expectsthatnumbertorise.

Stoltzsays36propertiesareredstickeredsofar,and200yellowstickered.Thesefiguresarepredicted toincrease,“withmanyhomeson watchasthelandcontinuestomove”. Shesaysinformationcompiledbythe recoveryco-ordinationcentresetup afterGabriellesuggests“weneed$1 billiontofixourregionandfutureproofit”.

Ifanimageoflandlikeporridge isn’tenough,localFederatedFarmers leaderTobyWilliamsoffersanother measureofthedisaster:manyfarmershavehadtobuyhorsestoget aroundtheirpropertiesduetolandslides.

“It’simpossibletotaketractors anywherebecauseit’ssowet,”he says.“It’sjustanacceptedfactofwhat wehavetodonowtoensureour stockarewellcaredfor. Alotofthe [seasonal]workcomingupwillhave tobedoneonfootbecausethere won’tbetimetofixthetracks.”

Thedamagetofarmswillhavean economiccostbeyondthehugerepairjobrequired.

“Ajobthatmighthavetakenhalf anhournowtakeshalf aday.Itwill

alsoaffecttherecoverybecause whenyou’respendinghalf aday doing ajob,thattimeislostfor repairs,”saysWilliams,Federated Farmersnationalmeatandwool chair.

Whileindividualpropertysituationsmaybemiserable—particularly forstillcut-offremotehouseholds— theregion’sroadsaretopofmindfor communityleadersnowthatsystems havekickedintoensurethemost isolatedresidentsaremonitored daily.

“Wedon’thave arailoption,”says

Stoltz.“Ourroadsarefragileandby seaisnotdependableeither.

“Ourstatehighways intotheregion alsocarrythetrucksthatdeliver everythingtooursupermarketshelves.As aregion,weareveryvulnerablewhenourstatehighwaysareout ofaction.Thisyearthey’vebeen closedaltogethermanytimesandleft ourpopulation completelyisolatedfromtherestofthecountry, accessibleonlybyair.

“Wearedealingwith acommunity incrisis.”

Regionaleconomicdevelopment

agencyTrustTaira¯whitiagreesthat roadandbridgefailuresarethemajor contributorstotheregion’sfeeling thatitisincrisis.

Actingagencychiefexecutive RichardSearle:“Weareprettymuch totallyreliantonourroadingnetwork toconnectoursupplychainsandour customers.Whenthosefail,which theyhavereasonablyregularlyof late,it’s areallybigproblem,anda lotofthecostsarebornedirectlyby ourbusinessesandindustry.”

Theresultingescalationoffreight costshasbeen“acutelyfelt”,androad

Thatmightsoundpositiveforhis business,butbecauseitoperateson around-tripbasis —fulltrucksgoing inandoutoftheregion —andgrowers havelostcrops,surchargeshave beennecessarytooffsetthecostof sendingtrucksoutempty.The nationwidebusiness,whichemploys 150peopleand120trucks,experienced a“huge”negativeswingin revenueduetotheFebruarycyclone, saysWeatherell.

“We’verecoveredto acertainextentbutwe’llnevergetthatback. We’regoingtofeelitfor alongtime. Notjustthisyear,butongoing.”

Theimpactofthisyear’sstormson theforestrysectoracrosstheEast Coasthasbeen“immense”andcomes onthebackoffrequentweather eventslastyear,saysEastlandWood CouncilchiefexecutivePhilipHope.

“Itishardtoput adollarfigureon exactlywhatimpacthasbeenfelt specificallyfromthefailinginfrastructureof ourregionbecausethere is arangeoffactorsatplay.

“WhatweknowisproductionforestryharvestvolumesacrossEastlandPorthavedeclined26percent since2021.

“Thispastyearwehaveseena dropinexportvolumeof 8percent whichmeansharvestvolumes reducedby200,000tonnes,”says Hope.

Innormaltimes,theregion’sforestryindustryprovides1000fulltime equivalentjobsandclaimstobethe largestGDPcontributortothelocal economy.

Manyforestrycrewshavenot beenoperatingsinceJune,duetothe inabilitytomovewoodtotheport, withtheexceptionofcrewsharvestingforestryblockswithdirectaccess tothethestatehighwaybyprivate road,saysHope.

“Thisyearweestimatearound 18-20crewshaveeitherlefttheregion,leftloggingaltogether,or transitionedtoanothersector.”

Harvestcrewshadnothadthree weeksofuninterruptedworksincea cycloneinAprillastyear.

IntheyeartoJune30,2.3million tonneswereexportedbyforestry companymembersofthecouncil, comparedto3.1mtonnesin2021.

MayorStoltzsaystherearemany layerstotheTaira¯whiticrisisand “there’snoquickfix”.

Butnoone’sinanydoubtthatthe regionneedsmoneytofundthe recoveryandresilienceplansnow beingnuttedoutbyregionalleaders andcommunities.

Giventhe$1bpricetagandthe region’ssmallratepayerpopulation, thatmoneymustcomefromcentral government.

InMay,thedistrictcouncilasked forimmediategovernmentfunding of$534mtorebuildinfrastructure, $5.1mtorestorethenaturalenvironment,$15.8mforeconomicrecovery and$475mtoassistsocialrecovery.

Afurther$547mwassoughtfor “resiliencefunding”,and$66.2mto addressresiliencerecoveryinthe naturalenvironment.

Todate,Stoltzsays,fundsreceivedare:fortheMayoralReliefFund, $1mfromtheGovernmentand$2.4m inpublicdonations;$38.8mfromthe MinistryfortheEnvironment;$29m fromNewZealandTransportAgency

EveryTairawhiti businessactivity— from family-owned pieshopstolargescalevegetableand fruitgrowers —has beenaffected

Weareveryvulnerable whenourstate highwaysareoutof action.Thisyearthey’ve beenclosedaltogether manytimesandleftour population completelyisolated.

RehetteStoltz GisborneMayor

AlandslideonPehiriRdTairawhitiGisborne,June26,2023afterheavyrainsagainlashedtheEastCoast.

‘acommunityincrisis’

WakaKotahi;and$10.5mtowardsthe removalofwooddebris.

Theregion’sallocationfromthis year’sBudgethasstilltobe“clarified”, shesays.

TransportMinisterDavidParker’s officesaysin astatementtheGovernmentallocated$250mforemergency repairsimmediatelyafterCyclone GabrielleinFebruary.

Afurther$275mwas“earmarked” inthisyear’sBudgettoreconnect isolatedcommunities,with afurther $419moversevenyearsforroading resiliencework.

Additionalfundingislikelyas workprogrammesareidentified.The ministerisawaitingadvicefrom WakaKotahionoptionsforongoing recoveryworkandfundingrequirements,tobeconsideredbyCabinet. OnJuly31theGovernmentannounced afurther$567mtoWaka Kotahiforimmediateworksonstate highwaysinTaira¯whiti,Wairoa, Hawke’sBay,CoromandelandNorthland.

TrustTaira¯whiti’sSearlesayswithout“moresignificantinfrastructure investmentfromtheGovernment,we can’tgetthere”.

“Weneedtotake alonger-term viewaboutinfrastructureresilience andthequalityofourroadingand bridgenetwork.

“Weare asmall,moresparsely populatedregion,oftenthere’sprioritisationbytheGovernment;sometimesthosemetricscountagainstus.

“Whenitcomestoinvestment,we pay aheavypricearoundthat.Events like this just make amore challenging businessenvironmentand aplaceto dobusiness,ifproactiveinvestment isnotdone,”saysSearle.

Roads‘ahumanright’

AskanyembattledEastCoastresidenthowtheyfeelandyoucanput moneyontheanswerbeing“tired”.

Tiredofbeingtossedaboutby storms,tiredofbeingdrenched,tired ofthelandmovingunderthem,tired oftheirroadingcrisis.

Buttheirdismayoverthestateof theirroadsandthefalloutforthelocal economygobackfurtherthanthis year’sstorms.

In2017, areportfrom ameeting ofcentralandlocalgovernment officials,roadingexpertsandtheforestryindustrysaidtheregionhada “crisis”roadingsituation.Foresters claimed“aregionaleconomicdisaster[was]abouttoworsen”dueto underfundinganddeterioration.

Followingthreestatesofemergencythisyear(fivesinceNovember 2021)andrecentrainprovingone downpourtoomanyforsaturated hillsides,theregion’sleaderssay roadingfailuresandcommunityand economicvulnerabilitygohandin hand.

Evenroadworkerswho,according toDownerregionalmanagerforGisborneandWairoaNigelPollock,live forthechallengeof agoodrainfall, aretired,hesays.

“It’sverydepressingwhenyoudo allthishardworkandcomebackthe nextdayandit’s adisasterzone again.”

DownerhastheWakaKotahi maintenancecontractforstatehighwaysintheregionandforaround20 percentoflocalroads.

PollockhasbeenrunningthehighwaycontractsforTaira¯whitiGisborneandHawke’sBayformorethan 15years.Hedoesn’tagreethereisa roading“crisis”,atleastnotforthe statehighways.“Butithasbeenvery interruptedforconnectivity,andup thecoast,theirroadsandhousesare isolatedbecausetheiraccesshas beenblockedoff.”

Hesaysthelatestrain“brokethe camel’sback.Thelandcouldn’t handleanymore.”

Facedwith avastareaofslipsand roadandbridgedamage,Pollockand histeamshandlethegiantrepairjob onebiteat atime.

“Ifyoubreakitdownandyouhave

aplanandapproachitin asystematic way, abigchallengebecomeslotsof littleprojects.Whenyouprioritise whatyou’regoingtodo,itbrings someclarity.”

Duringthestatesofemergency, Downerfollowedthejobordersof CivilDefence.

“Theirfocusistoprotectlife.The landmassofGisborneisquitelarge

andthepopulationisquitesmall.

“Alotofpeoplelivinginisolated communitieshavehealthissues.If theroadsareblocked,thesepeople candie.Helicopterscan’tflyina cyclone.SoDownerwouldturnits focustherefirst.”

Pollocksaysthelocalenvironmentisveryfragile.“Wearevery vulnerablehere werelyonstate highwaystogetgoodsinandout.”

Askediftheroadingfragilityis becausetherehasn’tbeenenough investmenttobuildresilience,he saystheregion’sgeology,thefoundationsonwhichroadsarebuilt,isnot good.

“Wedon’thavegood,hardmaterialstobuildhigh-qualityroads.Everythingmoves.IntheSouthIslandthey havebeautifulgreywackewhichis rock-hard.

“Wearechallengedforgoodmaterialstobuildgoodroads.

“Itmeansyouhavetoimportma-

Above:A damagedbridge overthe WaipawaRiver onState Highway50 aftertheJune rains.Left: Transpower’s Whirinaki substationwas floodedafter Cyclone Gabriellestruck.

terialsandthenthecosttobuildgoodqualityroadsisunaffordable.It’sthe natureofourisolation.”

Pollocksaysstatehighwaysare designedfor alifeof25years.“There hasneverbeenenoughmoneyin anyone’sbudgettoreplaceallofour statehighwayinventoryinthis countryevery25years.”

Ratesandtaxeswouldhaveto rockettoachievethis,hesays.“It’s whyyouhave[lotsofexperts]thinkingofinnovativewaystokeepinfrastructurerunningon ashoestring budget.”

FederatedFarmers’TobyWilliams says“peopleareatbreakingpoint”, largelyduetoroadaccessproblems. Somefarmswon’thaveroadaccess foratleastanothersixmonths,he says.

Theroadingissuealsomadeit difficulttoretainandattractstaff.

“Weneedinvestmentfromcentral government.

“Weneedourroadingfixed.It’sa criticallifeline ahumanright.”

HesaysEastCoastlocalroads startedasMa¯oribushtracks,were slowlywidenedovertheyearsfor horsesandcarts,andwereeventually gravelledtotakevehicles.

“Theywereneverproperlydesignedorputintherightplaces.We needtobethinkinglong-termabout aroadnetworkthat’sfitforpurpose. Wedon’twanttofindroadsare closedeverytimeitrains.”

WakaKotahisaystherehasbeen significantdamagetothestatehighwaynetwork,includingthedestructionoftheHikuwaiBridge,andwidespreaddestructionoflocalroads. Somecommunitiesremainshut off,thetransportagencysays.

TransportMinisterDavidParker saysthereare“nocurrentplans”to abandonsectionsofstatehighway, butsomeroadsectionsarebeing consideredforrealignment.

NickLeggett,chiefexecutiveofInfrastructureNewZealand,saysthere’s agreatopportunitywiththeEast Coast’s“networkinfrastructurefailure”for apublic-privatepartnership ashasbeenmodelledoverseas,includinginAustraliaandtheUK.

“It’swherecentralgovernment partnerswithlocalgovernment,iwi andtheprivatesectorinwhatwe wouldlabel‘aregiondeal’,”hesays.

“Ithandsthepowerandinfluence tolocalcommunitiestomakedecisionsforthemselves.Localpeople havetobeinthedrivingseatand businesshastobeatthetable.

“Wecan’tjustrelyonthegovernmentbalancesheettofixallthese problems.

“Wehavetolettheprivatesector comeinandfundandfinancesome oftheseinfrastructuresolutions —we shouldn’tbescaredofthat.”

LastwordtoDowner’sPollock, whocameawayfrom arecentroads conference,addressedbycentral governmentandWakaKotahiofficials,confidentthatroadingresilienceistopofmindinWellington.

“Thereis alotofenergybeingput intowhatwecandobettertoprovide amoreresilientnetwork itwas reallypositive.Thereis arealappetite towanttodomore,”Pollocksays.

“Everyoneunderstandsdemands onourroadingnetworkarevery differentnow.”

It’sverydepressing whenyoudoallthis hardworkand comebackthenext dayandit’sa disasterzoneagain.

NigelPollock,Downerregional managerforGisborneandWairoa

Wehavetolettheprivate sectorcomeinandfundand financesomeofthese infrastructuresolutions we shouldn’tbescaredofthat. NickLeggett,chiefexecutive,InfrastructureNewZealand

Dealingwith atectonicshift

Ourprimaryexportstrategymustinvolvesustainabilityandtargethigh-valuemarketswrites

Irecentlyreadthrough achart thatlistedtheclimatecommitmentsmadebymorethan 50multinationalcompaniesin recentyears.

Anumberofthemarecustomers ofourbiggestexporters.

Nestleaimfor50percentreductionofscope1, 2and 3emissions by2030;Marshassetouttolower emissionsacrossscopes1, 2and 3by 67percentby2050andhassaid38 percentofitsemissionscomefrom agriculture;Tescowant a17percent dropinscope 3emissionsby2030; andDanonetarget a47.2percent reductionforscopes 1and2,and42 percentforscope 3emissionsby 2030.

Fortheuninitiated,“scope”relates totheaspectofthebusinessthat producesemissions.Scope 3emissions’relatestoemissionsfromthe entirevaluechain,whichincludes supplierslikefarmersandgrowers.

Thelistwaspublishedby agroup encouragingconsumerstomakesure thesecompaniessticktotheir commitmentsandnotusethemto “window-dress”or“greenwash”.

Thesetwopiecesofinformation shouldmakeanyfarmer,groweror exportersitupandpayattention.

Whilethere’sbroadconsensusthat climatechangeisrealanditseffects aretestingourproductionsystems andinfrastructure,whatisalsoreal isthatourcustomers(andtheircustomers)arefocusingonreducingthe emissionsfromfarmersuppliers.

Thisis atectonicshiftinourexport markets.

I’veencounteredpeopleinthe industrywhoscoffatthis,regarding itasthegovernmentandbigbusiness puttinganoneroustaskonthem. Thenthereareotherswholookatthis asanopportunitytocreatevalueand beaheadofcompetitorsasthemarketsshift.

Obviously,I’minthelattercamp. Ihaveconfidenceinourproducers becausewehave alonghistoryof adaptingtoourmarketsandunderstandingourcustomers.

Oursuccessatadaptingand innovatinghasformedthefoundationofourstandardofliving.The importanceoffoodandfibretoNew Zealandwasstarklyshownduring theCovid-19pandemicwhenfarmers andgrowersbutteredourbreadand keptoureconomyrunning.

However,inordertokeepdeliveringforKiwis,ourfoodandfibre

sectorneedstostayaheadofthe curveonclimateandlistentothe growingmarketsignals.Onlythen canwemaintainexportgrowth.

Thisyear,onceagain,thesector hashitrecordexportrevenueof$56.2 billionat30June2023.

Thisis aremarkableachievement, giventheheadwindsoftheglobal economy.

The SituationandOutlookforPrimaryIndustries reportisforecasting exportstoclimbto$62bby2027. Indeed,exportshavegrown47per centsince2017,whentheLabour-led Governmentwaselected.

Insupportingthisgrowth,we’ve signedorupgradedsevenfreetrade agreements(FTAs)since2017toopen moremarketopportunitiesfor exporters.

Thismeansthat74percentofour exportswillbecoveredbyanFTA —upfromaround50percentsix yearsago —givingbusinessesthe certaintyofinternationaltreaties withlegallyenforceablerules.For example,theGovernmentisgoing intobatforourdairyfarmersagainst Canadaontheissueofourtariffquota accessthroughtheComprehensive andProgressiveTrans-PacificPartnershipAgreement(CPTPP).

Iacknowledgethattherearesignificantchallenges.Therecently announced2024forecastfarmgate payoutformilkisdisappointingfor all.Costpressureson-farmhavebeen thehighestindecadesfollowing

spikesininternationalfertiliserand fuelpricesas aresultofRussia’swar onUkraineandthelogjamthatthe pandemiccreatedonsupplychains.

Manyfarmerswillbeconcerned aboutmarginsandthisisreflectedin arecentsurveyoffarmerconfidence.

There’ssomewelcomenews though.

Fertilisercostsarenowdropping significantly,withon-farminflation trendingdownalongwithheadline inflationeasing.Interestratesshould follow.

Weallknowthereareleanyears infarmingandtherearegoodyears. Whatisimportantisthatwehave strategicdirection. Iread aquotethat definedstrategyasbeingabletolook atdistantthingsasthoughthey’re closeandtobeabletotake adistancedviewofclosethings.

NewZealand’sprimaryexport growthstrategymustinvolve positioningourselvesonsustainabilityandtargetinghigh-valuemarkets. Wehavetobeabletodemonstrate oursustainabilitycredentialstoever morediscerningconsumers.Their valuesaredrivingtheirpurchasing decisions.Ourproductionstorymust alignwiththosevalues.“Fromvolumetovalues”,asmanywouldhave heardmesay.

Reducingagriculturalemissionsis acriticalpartofthisinresponseto themarketsignalsoutlinedearlier.

Wesimplycannotputourheads inthesandonthis.

DamienO’Connor

freshwater,breedlowermethane livestock,developroboticasparagus picking,rampupthemedicinalcannabissector,andscientificallyvalidateregenerativeproduction.Justto name afew.

We’vealsoinvestedover$47m intomorethan200catchment groupsacrossthecountry.

Theworkofthesefarmerand growerledgroupsiscriticalinrestoringourrivers,lakesandwetlandsand keepingoursociallicenceinanincreasinglyurbanisedNewZealand.

Furthermore,we’reontracktoeradicateMycoplasmabovis,havingjust announcednoknowninfectionsand nocurrentinvestigationseither.We arenowfiveyearsinto a10-year programmethathadnearly$900m committedtoitin2018.Cattleproductivityandwelfarewouldbebadly knockedifthediseaseweretobecomeendemicanditwouldhave underminedtheefficiencyofour productionsystems.

Withthatgoalinmind,theGovernmentcontinuesourworkwiththe HeWakaEkeNoafarmingpartnershiptodevelop asensiblepricingand sequestrationrecognitionsystemfor agriculturalemissions —and Ithank thesectorfortheireffortssofar.The revenueraisedthroughthissystem willbering-fencedtodrivetheproductdevelopmentoftoolsforfarmerstoreduceemissions.

TheGovernmentalreadyhasprojectsunderwayin ajointventure calledAgriZeroNZ.Thatpartnership wasformedlastyearandhasalready secured$170millionofinvestment overthenextfouryears.Thepartners areAnzco,Fonterra,Rabobank,Ravensdown,SilverFernFarms,and Synlaitandwewelcometheirvision intacklingclimate.

TheAgrZeroNZpartnershipcomes under alargerinvestmentbythe GovernmentinBudget2022of$338m tohelpfarmerstackleemissions throughtheCentreforClimateAction onAgriculturalEmissions.

It’sanexampleoftheworkbeing donewiththesectortomeetour changingmarkets.

Itdovetailswith arangeof initiativestobackourfarmersand growers.

OurSustainableFoodandFibre FuturesFundhasnowseen$566m co-investedwithbusinessacross267 innovativeprojects.Theseprojects includeworktohavespray-free apples,reducenutrientlosstobenefit

Ateachstep,theGovernmenthas workedwith,andbacked,thesector. Wewillcontinuetodosobecausewe understandhowimportantourprimaryindustriesaretoNewZealand.

There’sanotherreasonthatI’m optimisticforoursector —ourpeople. Wehave awell-educatedpopulation. Thatmeanideasandnewtechnology evolvequicklyandcan,inturn,be transmittedfromfarmertofarmer andgrowertogrower;with ahealthy amountofcrosspollinationinthe process.

Ispoketosoilsciencestudentsat LincolnUniversityrecentlyandwas pleasedtolearnthattheagriculture facultyhasitshighestnumberof studentsever.That’s averypositive sign. Idon’twanttodiminishthe challengesbeingfeltoutthere,butI wouldalsoencouragepeopletostep backandconsidertheopportunities wecancapture.

NewZealandiswellpositionedto supplythesehigh-valuemarketsand tosharenewtechnologyandknowledge.We’reknownasworldleaders infoodandfibre.Indemonstrating ourcredentialswecanaspiretobe thebestfarmersandgrowersforthe world.

● DamienO’ConnorisMinisterof AgricultureandMinisterforTradeand ExportGrowth.Healsoholdsthe portfoliosforBiosecurity,Land InformationandRuralCommunities

It’stimeforbusinesstoraiseoursights

SimonBridges Ithasn’tbeeneasytobeinbusiness inrecenttimes.Covid,and ahangoverfromit,lackofworkers,cost escalation,floods, acyclone,haveall beenthere.Butit’stimeforbusiness toraiseitssights,upandout,and beyondourshores.

Afterall,muchoftheworldis movingon,andasthesmallest,most remotedevelopednationinthe world,wedobestwhenweare connecting,collaborating,andlearningfromtradingglobally.

Thisiswhy,inadditiontoour delegationwithotherbusinessorganisationstoIndia,theAucklandBusinessChamberisalsoleadingdelegationsofbusinesspeopletoChina andIsraelbeforetheendoftheyear.

Intalkingwithothers,wedecided itwastimetogetoutthere.

Theimmediate,significantinterest frombusinesshassurprisedme.We areclearlyontherighttrackand thinkingthesame.Withoutmuch effortwehave40plusbusinesses comingonbothtrips.

RegardingChina,therationaleis

Technologycan complementourbiggest sectorscurrentlysuchas agriculture,with innovationallowingfor greaterproductivityand profit,andopeningnew areasofgrowth.

SimonBridges

prettyclearcut.It’sourbiggest economicpartnerandgivenoursize andscalerelativetoit,thereisstill muchopportunitythere.Personally, IamalsoverykeentoseeChinapostCovid.Wehearitisn’tquiteasbuoyantasitcouldbe,butthewheelsare turning,andthereisnothinglike beinginmarketandseeingitwith yourowneyestounderstandandget therealoil.

Theplayerscomingarealmost entirelycommercial,acrosssectors

includingmanufacturingandconstruction,financialandinvestment services,energy,andprimaryproduction(honey,wine,fisheriesand forestryforexample).

WhileinChina,wewilllearnfrom officialsinShanghai,Beijing,and Hainanabouttheregulatoryandculturallandscapeandwewillalsomeet withChinesebusinessesrelevantto eachattendingsectortoenablecommercialopportunities.

Hainanprovincewillbe aparticu-

larpolicytreat.Intherecentpast, Chinahastransformedtheregioninto afreetradeportwithduty-freeshoppingand,moregenerally, alowertax andcomplianceregime.Thisishelpingtodiversifyitslocaleconomy, whichhastraditionallyreliedonagricultureandtourism.

Israelwillbedifferentagain.In partnershipwiththeNewZealand IsraelInnovationHubandtheIsrael AustraliaNewZealandChamberof Commerce,weareexploringthe “start-upnation”andallthingsinnovation,fromadvancementsinAI, cybersecuritytorobotics,agritech, andfood-tech.

Theprofileofthosecomingonthis uniquetripincludesignificantindependentdirectors,highnetworth investors,andbusinesspeople.

Thereareundoubtedopportunitiesforusinthislandthat’sthrived underconditionsofadversity,boastingmoreunicornspercapita(26) todaythananyothercountryinthe world.

Thereason Iwassoattractedto leadthismissionwas aconviction techwillbecomeourcountry’snum-

beronesectorifwewantittointhe nextdecadeorso.Andsurelywith ourchallengesahead(whetherclimate,agingdemographics,lowproductivityandthethreatofmore naturaldisasters),movingintothese morelucrative,weightless,andproductiveareasis anobrainer.

Moreover,todoitrightweshould learnfromthebest.

Technologycancomplementour biggestsectorscurrentlysuchasagriculture,withinnovationallowingfor greaterproductivityandprofit,and openingnewareasofgrowth.

Israelmustbeoneof,ifnotthe greatestexampleofthis,givenjusta coupleofdecadesagoitwasprimarilyanagriculturalnationwhereas nowit’s aunicornsuperpower,home to270multinationalsand350significantR&Dfacilities,investingmore thananywhereelseininnovationas aproportionofGDP.

It’stime –infactnotbeforetime –togetoutthere.ChinaandIsrael areexcellentplacestostart.

● SimonBridgesisCEOofthe AucklandBusinessChamber

Weallknow therearelean yearsinfarming andthereare goodyears. Whatis importantisthat wehave strategic direction.

The world is

ToddMcClay

Wheneverthecountryis introuble,it’salwaysthe ruralsectorthathelps digsusoutofitthrough hardwork,innovation,andbecause theyareworld-leaders.

Eachtimewehaveseen astep changeintheNewZealandeconomy andimprovementinthequalityof living,it’sbecausethegoodsand servicesproducedbyourfarmers andgrowershavebeeninhighdemandinsomeoftheworld’smost lucrativemarkets.

WithNewZealandinrecession, interestrateshighandourdebtforecasttohit$97billion,thetimetofree upourfarmersandhavethemhelp NewZealandgetbackontrackisnow.

Iamincrediblyoptimisticabout thefutureforNewZealandagricultureintheglobalmarketplaceand cannotunderstandwhythecurrent Labour-GreenGovernmentseemintentonrestrictingthegrowthofthe sector.

Wearesittingprettyintermsof theglobalmarket. Icanthinkback towhenwewerehavingdifficulty finding amarketforourmeatand dairyproducts.Nowthechallenge isn’ttofindsomeonetobuyour products —thechallengeistogetthe bestpriceforit.

Partofthereasonforthischange

incircumstanceisthatwenowenjoy excellentmarketaccessopportunity intomostofAsia,Australia,andnow theUK.Ournetworkofgenerally high-qualityfreetradeagreements (FTAs)hasdeliveredthis.

TherecentFTAwiththeEUhas letdownthedairyandmeatsectors badly —theaverageEuropeanwill onlygettoeat aNewZealandsteak onceevery10yearsunderLabour’s deal —however, arules-basedapproachtotradewithEuropestill makesiteasierforourexporters.

TheGovernmenthasnotstarted anyformalliberalisationdiscussions withtheUnitedStatesorIndia,and theseshouldbepromotedsothat we’renotleftbehind.Weneedtobe smarterinourstrategyandpatient withourexpectations.

Theotherreasonwearesitting prettyistheintegrityandreputation ofwhatweproduce.Andinterestin thequalityofourproductandthe increasinglypositiveimpactithason theenvironmentwillonlygrow.

WithNewZealandin recession,interestrates highandourdebt forecasttohit$97billion, thetimetofreeupour farmersandhavethem helpNewZealandget backontrackisnow.

ToddMcClay

InmyroleasNational’sagriculture andtradespokesperson Ivisitlotsof farmers,growersandprocessors.Not oneisunconcernedaboutdoingeven betterfortheenvironment.Farmers wanttoimprovewaterqualityand reducecarbonemissions.Theyare activelyinvestinginimprovedgenetics,andtechnologytoachievethis. Processorsarecommittedtodecarbonisation.Andthesupplychainis on asimilarrapidjourney.In10years’ time,ourenvironmentallyfriendly productwillbetransportedonmore efficientroadsandrail,byelectricor hydrogenpoweredvehicles,ontoan internationalshippingfleetpowered byhydrogenorammonium.

Everyonewillbewantingourproductandwillbewillingtopaytop dollarforit.

Nationalisfocusedonhowto partnerwiththeagriculturesectoron thisjourney.

Theworldisnotstandingstilland thereisdramaticchangeafoot.Chineseconsumerswillbemorewealthy

andwillremainimportantforNew Zealand.Butitwillnolongerbe growingasquicklyasinrecentyears asitspopulationisabouttoundergo adramaticshift.India,Pakistanand Bangladesh,SriLankaand anumber ofcountries intheMiddleEastand Africaaregoingtobecomemuch moreimportant.AndLatinAmerica isgoingtobeevenmoreinteresting asanopportunitythanitistoday.

WeneedtorepositionNewZealand’sforeignandtradepolicytodo evenbetterinthisnewworld.Itis goingtomeannewskillshavingto belearnedandpeoplelivingand workingindifferentplaces.

Wearegoingtohavetoinvest moreinFrenchandSpanishaswell asChinese,Arabic,Indianandother Asianlanguages.

AmissedopportunityfromNationalleavingofficein2017wasnot beingableresetournegotiationswith theGulfCo-operationCouncil(GCC) intheMiddleEastandthePacific AllianceinLatinAmerica.Thesewill

joinIndiaasoneofmyprioritiesif wearebackinofficeinOctober.The UAEhasalreadysaidtheywillnegotiatebilaterallywithNewZealand— anopportunityLabourissettoannouncejustbeforetheelection.Thisis longoverdue,howevertheGCCasa wholemustremain apriority.

WehaveseveralLatinAmerican countrieswantingtojointheComprehensiveandProgressiveAgreement forTrans-PacificPartnership(CPTPP). Whynotacceleratetheiraccessions?

Allthisispossiblewithstrong,effectiveleadership.

Mostimmediately, Iwanttolook athowNewZealandcanpartnerwith Ukrainetohelprebuildthateconomy afterthedreadfulwaritiscurrently fighting.Weareverycomplementary aseconomies andhave muchopportunityforagriculturecollaboration. Ukrainehasputupitshandtobean activememberintheworld’strade architecture. We should support and champion this and look to welcome them for strategic reasons to existing trade deals.

New Zealand is atrading nation, and 400 million people around the world get 10 per cent of their diet from our shores. The way we afford schools, hospitals, roads and more teachers and nurses is through producing more and doing more on the world stage.

Agovernment’s job is to open doors and level the playing field, then move out of the way for Kiwis to do what they do best which is make the most of these opportunities.

The next National Government has this clearly in our sights.

● ToddMcClayistheNationalParty’s spokespersonforAgriculture,Trade, andHuntingandFishing

China speeds upon sustainability

Overthepastthreeyears Chineseconsumers’awarenessinsustainableproducts,andclimatechange, hasincreaseddramaticallyand FonterraCo-operativeGroupis poisedtotakeadvantage.

“ThethingwithChina,”says FonterraGreaterChinachiefexecutiveTeh-hanChow,“isthatchange canhappenquicklyandisfastmoving.”

Asanexampleofrapidchange, electricvehiclesmadeup aquarter ofallpassengercarssoldinChinalast year,faraheadofUnitedStates’one inseven,and,Europe’soneineight. Estimatesarethatelectricvehicle penetrationinChina,theworld’s second-largesteconomy,willbe90 percentby2030.

Includingplug-inhybrids,China’s clean-carsaleshit5.67millionlast year,morethanhalfofallglobal deliveries.Thecountrywillaccount forabout60percentoftheworld’s 14.1millionnewpassengerelectric vehiclessalesthisyear.

Chinahasthelargestchargingnetworkintheworld,adding649,000 publicchargeslastyearwhichmore ismorethan70percentofall installationsdoneglobalthatyear.

ItallbeganinSeptember2020 whenPresidentXiJinpingsurprised theUnitedNationsGeneralAssembly byannouncingin avideolinkthat Chinawillaimtohitpeakcarbon emissionsbefore2030andbecarbon neutralby2060.

Theannouncementwasseenasa significantstepinthefightagainst climatechange,withChina,the world’sbiggestsourceofcarbondioxide,responsibleforaround28per centofglobalemissions.

Chowsaysbefore2020therewas verylittleawarenessofwhatcarbon emissionsandneutrality(abalance betweenemittingandabsorbingcarbon)meant.

“Assoonastheannouncement wasmade,everyonebecameaware. ThesearchesonBaidu(similarto Google)climbedlikestepson aladder;before2020therewasnothing.

“Whatthegovernmentsetsasimportant,corporationsandcitizenswill follow.That’stheChinachange.

“Since2020it’sbeenanevolution ofeducatingconsumers aboutsustainabilityandcarbonemissions.”

Theupshot,saysChow,isconsumersarewillingtopayforsustainabilityandfocusonthebenefits forthem,intermsofhealthand wellbeing.

“As aproducerandsupplier,we havetocommunicate amessageof sustainabilitythatcustomersand consumersareabletounderstand. NewZealandhas abeautifulgrassfed farmingsystemandwecandescribe thebenefit

“NewZealandisoneofthemost emissions-efficientproducerofmilk intheworld —itscarbonfootprintis athirdoftheglobalaverage.Wecan make averygoodpropositiononan organicfarmingsystemthatisfree frompreservatives,hormonesand pesticides.

“Thisresonateswellwiththeconsumer.”

GreaterChinasustainability

survey

Recently,Fonterraran aGreater ChinaSustainabilitystudysurveying 180businessesandmorethan6000 consumers.

Theresearchfoundthatconsumersconsiderbrandsthattalkabout theirsustainabilityorhavingsustainableproductsandactivitiesastrustworthyandpremium.

Consumerstrustbrandswhichdo notsolelyactbasedonprofitsand premiumproductshavetheresourcestodomorefortheenvironment.

Nearly100percentoftherespondents(98percent)saidtheyare willingtobuysustainablegoods;61 percenthavepurchasedatleast once;and23percentareearly adopterswhoholdstrongbeliefsand

Localisation fusedwith innovation

Fonterra’svice-president foodserviceforGreaterChina JustinDai,saysthe$2billion foodservicebusinesstheglobal dairygiantoperatesinChina,is evolvingtokeepaheadofrapidly changingconsumerpreferences. Fonterra’sfocusonlocalisation andinnovationandthefusionof dairygoodnesswithlocal preferencesinChinahasbeena pillarofitssuccess.

Anexampleofthisisthe innovative“cheesedirtycoffee” launched ayearago, adrinkthat combinesespressowithmilk, cream,creamcheeseandbutter.

“Iknowitsounds abitodd,”Dai toldthe2023ChinaBusiness Summit.“Butwhenthisdirtycoffee waslaunchedabout ayearago,it wasanimmediatehit.Itwas launchedbyoneofthelargelocal coffeechainsinChina,andinthe firstweeknationwidemorethansix millioncupsweresold.”

Fonterra’scommitmentto innovationisunderscoredbythe establishmentoffiveapplication centresinChinaoverthepast decade,locatedinShanghai, Beijing,Guangzhou,Chengdu,and anewlyopenedfacilityin Shenzhen.

Thesecentresare abasefor collaborativecreativity,bothwithin Fonterraandalsowithexternal stakeholdersincludingbakeries, coffeeshops,restaurantsand retailers.

Teh-hanChow,Fonterra’sGreatChina chiefexecutive

valuesustainableproducts —includingrecyclablepackaging.

Chowsaystheresearchfindings gave“usmoreconfidencethat consumersarewillingtopayfor desirablesustainableproductsand wewillfocusontheareasthat resonatedmorewithcustomers— suchasorganicandgrass-fedproducts.NewZealand’sprovenanceis linkedtosustainabilityandthegeneralimageryofthecountrybeing green.”

Sustainabilitystrategy

Fonterra,thecountry’sbiggestcompanyandlargestimporterofdairy productsintoChina,isflyingtheflag forsustainabilityandclimatechange.

LastmonthFonterraincreasedits decarbonisationtargetsto a50per centabsolutereductionofgas emissionsfrommanufacturingand supplychainoperationsby2030,up from a30percentreductionusing 2018as abaseline.

Fonterraconfirmeditsambitionto benetzeroby2050.Theco-operative willsoonbeannouncingitson-farm emissionsreductiontarget.

FonterrachiefexecutiveMiles

Hurrellsaidachievingthenewtargets

willrequireenergyefficiency improvementsandfuelswitchingto renewableenergysourceactivities acrossitsmilkcollectionfleetsand manufacturingsites.Thecooperativeplanstobeoutofcoalusage atthesixmanufacturingsitesby2037, anditispresentlyassessingbiomass, electrificationandheatpumptechnologyattheClandeboyeandEdendale plants.

HurrellsaidFonterrawouldspend $1billioninsustainabilityinitiatives overthenextdecade,doublinginnovationeffortstosolvemethane challengesandmaintaintherelative carbonfootprintagainstNorthern Hemispherefarmingsystems.

“Doingsowillallowustoinvest inourbrandstoshowcasetheNew Zealandsustainablenutritionstory. Thiswillputusinpositiontofurther growfoodserviceandconsumer channelsinAsia-Pacificmarketsand gainmorevaluethroughouringredientschannelbyhelpingcustomers meettheirownsustainabilitygoals,” Hurrellsaid.

Chowsays“weareworkinghard onoursustainabilitymessage.Ifa consumerhas aglassofNewZealand milk,ithaslesscarbonfootprintthan milkfromanotherorganisation.

“Weareheretohelpcustomers meettheirenvironmentalgoals,and wehavetheopportunityandcapabilitytoadvanceourPureNewZealand,lowpollutionandgrass-fed claims.”

HesaysFonterraisworkingwith customerstoestablish anetzerofarm inNewZealandas arolemodelfor sustainability.As aresultoftheresearchfindings,ChowsaysFonterra ishappytoadjustitsportfoliooffering andmeet(changing)consumer needs.“Theyevolveveryquicklyand wehavetoworkhardtomeetthose evolvingchanges.” HeindicatedFonterrawouldin-

creaseitssupplyoforganicUHTMilk withoneleadingretailerwhichis forecasting adoublinginsalesover thenextyear.“Wewillbelookingat otheropportunitiesfororganicproducts.”

Fonterrahaslodgedanapplication forintroducing anewprobioticstrain totheChinesemarket,anditslooking tolaunchtwonewUHTcream blends,and anewAnleneproduct.

FoodserviceinChinahasbecome asuccessstoryforFonterra —inthe thirdquartersalesincreased$55mto $229moutofthegrouptotalof $297m.

“Wehave amixedbagofcustomers.Somehaveachievedrecord quarterlyearningsandothershave goneintobankruptcy —theydidn’t surviveCovid,”saysChow.

“Wearefocusingatthepremium endandworkingwithcustomerson innovativeapplicationsfrombeveragestobaking,diningchannelsand Chinesefood.

“Youdon’tfind alotofdairyin traditionalChinesecuisine.”

OntheChineseeconomy,Chow saysthenumbersshowthatithas slowed,justsevenmonthsoutof Covidrestrictions,but“ifyouwalkthe streets,youdon’tfeelthat.There’sthe hustleandbustleandconsumersare aliveandwell.

“Theywentthroughthreeyearsof hardCovidmeasuresandarenow feelingrelief.There’senergycoming fromthat.

“Thedairydemandhasnot dropped.Ithasslowedbutitcontinuestoincrease.FonterrahasoperatedinChinafor50yearsandcontinues astrong,relentless,persistent propositionofcoreproductsand categoriesthatleadtosuccess.”

● Fonterraisanadvertisingsponsor oftheHerald’sAgribusinessandTrade report

“Thisisanadvantagewehave inChina,toworktogetherwithour customerstodriveinnovation,”Dai says.“Wehavestrongconfidence intheoutlookofChina.Demandis comingback,andwehavethe confidencetocontinueinnovation.

“Wewillcontinuetoinvestinour partnershipwithourcustomers, goingbroaderanddeeperwithour partnerstocontinuetobringthe goodnessofNewZealanddairy intoChineseconsumers’recipes.”

ThroughAnchorFoodProfessionals,Fonterraservesfourmajor channelswithinChina’sfood servicemarket:bakery,beverage, dining,andtherapidlygrowing retailfoodservicesector.Itsreach spansover470cities,includingall tieroneandtiertwocities,along withhundredsoftierthreeandtier fourcities,inpartnershipwithits authorisedAnchordistributors.

Keytrendsshapingthemarket:

● Gen-Z’saffinityfortraditional Chinesepastriesinfusedwithdairy iscreatingnewculinary opportunities.

● Socialmedia’spervasive influenceisrevolutionising purchasingbehaviour,prompting anintensemarketingarmsrace.

● Theinterplaybetween premiumandmassmarketsis intensifyingcompetitionand redefiningstrategies.

● Fast,boldinnovationis blurringchannelboundariesand redefiningtheindustry.

● Theshifttowardsvaried diningoccasions,encompassing online,offline,andfoodservice retail,isalteringconsumption habits.

● Nichebrandsandthe untappedpotentialoflower-tier citiespresentvastgrowth opportunities.

—TimMcCready

Fonterra is spreading thegreenmessageand adjustingits product portfoliotomeet consumerandcustomersentiment,writes GrahamSkellern

Consumersare willingtopayfor sustainabilityand focusonthe benefitsforthem,in terms ofhealthand wellbeing.

Thefuture offood:Whowill be themajorconsumersof2050?

Majorshiftsaroundageing,urbanisation,wealthanddistributionofthepopulationmeans thatconsumerpreferenceswillchange,providingnewmarketopportunities

More,more,more

Consumerswillneed56percentmorefoodby2050.Theyare livinglonger,morearebettereducatedandtheshifttoliving incitieswillcontinue.However,theequitygapbetweenrichand poorpersistswithcontinuingrisingwealthinequityandpolitical unrestformorethan70percentoftheworld’spopulation.

8billion peoplenow

9.7billion by2050

Between2015and 2050,theproportion oftheworld’s populationover60 yearsoldwillnearly doublefrom 12% to 22%

The Philippines,India,Egypt and Pakistan remainyounginto2050.

68% urban by2050 with66 mega cities. Mostrapidgrowthin AsiaandAfrica.

Cross-countryinequitiesin education areclosing.

SwingtoAsiaandAfrica

ThesignificantdemographicshifttoAsiaandAfricawillcontinue, withrisingpopulationandincomes,aspopulationratesinthe westslow.Almost 3billion,ormorethan40percentoftoday’s population,willjointhemiddleclassesby2050.Theseentrants willbealmostexclusivelyfromtoday’semergingmarkets.

Morethanhalf ofprojectedpopulation growth to 2050in8countriesin Asia andAfrica. India’spopulation to overtakeChinain2023.

Theweststayswealthybutpopulation growthratesslow withlessthan 2% consumptiongrowth.

Theeastisgrowing.China,India, thePhilippinesandMalaysiaannual growthinrealincomesismorethan 4%

6million Population in NewZealand by2050. Down from 70%

Pacific AsianMāori European

Today’syoutharetomorrow’starget

Theyouthoftodaywillbe2050slargestconsumergroup.This includesthegenerationborninthenextfewyears.Their consumerneedsandwantswillbeunderlinedby asignificant wealthtransferfromoldergenerations.IntheUnitedStatesalone, thisequatestoUS$72trillionby2045.16

Environmentalsustainability isseen asthe greatestissueforyoungpeople, butthisdoesnotyetfactorsignificantly intoday’syoungconsumer food purchasing decisions

Theworking-agepopulationwill decrease10% worldwideby2060— butthiswillbeunevenworldwide.

600m millennialsin Asian‘growth’ countriesareincreasinglywealthy, digitallysavvy, focusedonsustainability.

Today’syoungpeopleareprimarily indulgenceled.They value food as medicineforphysicaland mentalhealth andaremorewillingto acceptand adoptnewtechnologies.

Newmarkets andpriorities

“Thefutureisbrightfor AotearoaNewZealand.Ourclimateand naturalresourcesand abilitytoproducequalityfoodproductscompetitivelyandsustainably positionuswelltomeetdemandfrom anincreasinglydiverserangeof consumers.Buttocapturetheseopportunitieswewillneedtocontinue tomakegoodchoices.”

OptimisticwordsfromanindependentreportproducedbytheMinistryforPrimaryIndustries(MPI)— TheFutureofAotearoaNewZealand’s FoodSector

MPIDirector-GeneralRaySmith explainseverycountryisgoodat something:foodproduction,pastoral farming,“that’sthethingwe’rebest at.”

Whentheministrywasrequiredto produce along-terminsightsbriefing, itdecidedtofocusonquestionslike, ‘Whatisthefutureoffoodconsumptionin2050?’

SaysSmith:“Tocuttothechase there’sanother 3billionconsumers goingtogointothemiddleclasses betweennowand2050 …andthey’re goingtocomemostlyoutofouremergingmarkets.They’llbeinAsia,and they’llbeinAfrica.We’realready heavilyinChina,butChinaitselfis forecasting adoublingofitsmiddle classto800millionpeople.”

NewZealand’straditionalmarkets —theUS,UK,EuropeandAustralia —alreadyhavelargemiddleclasses.

SmithsaysIndiaisalsogoingto be abigplayer.

“We’regoingtohavetogetcloser tothoseemergingmarketcountries tounderstandwhattheirconsumers requireinordertobuildthoserelationshipsandgetthesortofmarket accessthatwe’reafter.”

Theupshotisthatboardsofdirectors,whoSmithhopeswillusethe reportas areferencepoint,willbe betterplacedtodecidewhereto placetheirglobalinvestment.

“Whilewe’redevelopingweightlessexports,andfiguringouthowto getmore‘directtoconsumers’and gettingouroriginstoriesreallystrong,

ForecastGDPrank

2050

NewZealand’scurrentmajor marketsinclude:

China (ranked 1stin2016and2050)

United States (ranked2ndin2016 and3rdin2050)

Japan (ranked4thin2016and8thin

2050)

UnitedKingdom (ranked9thin 2016and10thin2050)

Australia (ranked19thin2016and 28thin2050)

Samplegrowingmarketsinclude:

India (ranked3rdin2016and2ndin 2050)

Indonesia (ranked8thin2016and 4thin2050)

Nigeria (ranked22ndin2016and 14thin2050)

Philippines (ranked28thin2016 and19thin2050)

Vietnam (ranked32ndin2016and 20thin2050)

we’realsogoingtohavetogointo newmarkets,wherewehaveprobablyspentlesstimeandenergy,to makesureweshoreupourposition.”

Thegraphicaboveillustratessome forecastconsumerchangesto2050.

Smithemphasisesfoodproductionisalsogoingtocomeunder pressurewithclimatechange.

“Oneofthethingsthatwe’revery consciousofisthatthe‘tickettothe game’atthemoment,whereNew Zealand’sbeensuccessful,isfood safety,”hesays.“Trusted,high-quality products,goodtaste,reliable.

“EventhroughCovidwenever missed abeat.

“Wecontinuedtosupplyworldwidemarketswithourproducts.So, we’rereliedon.”

Increasingly,sustainability,the ethicalproductionoffood,andfood sovereigntyarefiguring,particularly, amongstmiddle-classconsumers whoaregoingtobecomemoreand morefocusedonchoosingproducts thatarebetterfortheenvironment andclimate.

“PeopleatthemomentlookatNew

Zealandas abrand,andthatgetsus mostofthedistance,”saysSmith.

“Buttomaintainthatedge,we’ll needtobeabletoverifywhereour productcomesfrom,whatgoesinit, whyit’sbetterfortheenvironment, whyit’sloweringouremissionsprofile,andsoon.

“Wethinkconsumersaregoingto constantlylookincreasinglyforproductslowinemissionsprofile.

“Forallofouradvantages,theone bigchallengewe’vegotisweproduce alotofgreenhousegasestoproduce allofthatfood.Andwhetherwelike itornot,it’s abigpercentofNew Zealand’sprofile,becausewe’renot bigindustrialpolluters.”

Hesuggestsproducingmoreof whatNewZealandcurrentlyproducesisgoingtobedifficult.Butthere isanopportunitygetmorevalue, whetherit’sthroughseafood,orfinishedwoolproductsforinstance.

“You’vegottobelievebytheend ofthisdecade,peoplearegoingto wantwoolproducts,”saysSmith.

“Ourchallengebetweennowand thenisgettingfarmerstokeephaving sheep.”

Onbalance,andthereportunderlinesthis,itmakessensetolook throughthecurrenteconomicdifficultiesNewZealandagribusiness faces.

“Wearesowell-positionedtogrow food.Theclimatechangeissueswill affectus,butnotasbadlyasothers,” saysSmith.

“Consumerpreferencesarealso changing —suchasstrongindividual preferences;thosewhowouldliketo buyfoodthat’sgrownclosertohome.

“Butwethinkwe’rewellpositioned.

“Ithinkthatwholethingabout conqueringthegreenhousegasemissions,andmaximisingourstrong environmentalcredentialsandbeing abletodemonstratethatwillcontinuetopositionusreally,really strongly,”saysSmith.

● TheMinistryforPrimaryIndustries isanadvertisingsponsoroftheHerald’s Agribusiness &Tradereport.

Zero-mycomay be afirstforNZ

FranO’Sullivan

NewZealandmaybeontrackto becomethefirstcountryintheworld toeradicatethecowdisease

Mycoplasmaboviswhichhasseenthe culloftensofthousandsofcowsin thelargestmassanimalslaughterin thiscountry’shistory.

Thedisease,firstdetectedinthe nationalherdinJuly2017,manifests itselfinmastitisincows,earinfections, severepneumoniaandotherimpacts.

MinistryforPrimaryIndustries (MPI)chiefexecutiveRaySmithsays fiveyearsintothe10-yeareradication programme,ithasnowgottothepoint where“wehavezerocasesforthefirst timeever”.

“InlateJulythroughSpring,when there’scalving,iswhenwe’remost likelytoseewhetherthere’sstillany herdsthathavebovis,”saysSmith.

“They’remostlikelytopresent whentheanimalsareunderpressure. Itusedtobe agooddaywhenwehad lessthan300noticesonproperties.

“Nowwe’vegotzero,sofingers crossed.”

Noothercountryhasattemptedto eradicatethedisease.ButGovernment andindustrybodiesagreedtosplita $800millionpluspricetagtosavethe dairyherdandprotectthelong-term productivityofNewZealand’smajor agriculturalexportearner.

Nosurprisethenthatbiosecurity toppedthelistofprioritiesin asurvey of105agribusinessleadersinthis year’sKPMGAgribusinessAgenda— thenumberoneissueforprimary producersfor10yearsin arow.

SmithreckonsAustraliaandNew Zealandmaybetheonlytwocountries intheworldthattakebiosecurity seriously.“Bothcountrieslooktokeep pestsanddiseasesandvarioussorts

ofinfestationsout,hesays.“Butit’s moreimportanttoNewZealandthan Australia,becauseoureconomyis muchmoredependentonfood productionthantheirs.”

ThatisbecauseNewZealand exportsnearly90percentofthefood producedhereand avastamountof logs.“Wedon’tneed abarkbeetle infestationinpineforests.Thatcould causehugedamage,”saysSmith.

“So,biosecurityisjustasimportant tothoseinthefibresectorasitisin thefoodsector.NZ’svery,very dependentonprimaryproductionfor itssurvivalandsuccess.”

NewZealandandAustraliaare movingtoshifttravellerdeclaration cardsonlinewhichwillassistbiosecurityscreeningaheadofpassenger arrivals.

Smithsaystheprogrammeasks drop-downquestions.

“So,ifyou’vebeenon afarm,orif you’vegotdirtyshoes,oryouhave somefoodthatmightaskyoumore questions.”

Theupshotisitwillbeeasierto identifypotentialthreats.

Thelatestbiosecuritythreatisa newmarineseaweedsuperspreader, Caulerpa,whichhaspoppedupat Kawauisland,GreatBarrierIslandand Northland.SmithsaysCaulerpais goingtobehardtokeepout.“But communitieswantustotrytoremove itbecauseittakesovertheseafloor.”

Thenthereistheinvasive freshwatergoldclamwhichhas spreadintheWaikatoRiverandcould jamupthewaterworks;andeverpresentconcernstokeepfruitfly incursionsatbay.

“We’rejustgoingtohavetobe continuallytobevigilantandkeep investinginbordersecuritycontrols.”

Toolkitforreducingemissions

Aworld-firstagriculturalinvestmentfund,AgriZeroNZ, backedbysixoftheindustry’sinfluencers,isworking ondeveloping atoolkitforfarmersto reducegasemissionsontheirland.

With a50-50shareoffundingfrom theGovernmentandprivatesector, AgriZerohas$165milliontoinvestin emissions-reductionsolutionsover thenextthreeand ahalfyears —with thepromiseoffurthersupportover thisdecade.

AgriZeroNZexecutivedirector WayneMcNeesaysthejointventure fundisundertakingtargetedinvestmentsandactionstoacceleratethe developmentandcommercialisation oftoolsthatwillbeusedbyNew Zealandfarmersandotherstosignificantlyreducebiogenicmethane andnitrousoxideemissions,while maintainingproductivityandprofitability.

“Thereisnothingonthemarket hereatpresent,thoughoneproduct, Bovaer,hasbeeninternationallyapprovedbutnotforuseinNewZealand,”saysMcNee.

“Wewantallfarmerstohaveequitableaccesstoaffordableandeffectivesolutions(forsheep,cattle,and deer),with agoalofsupporting a30 percentreductioninemissionsby 2030andnearzeroby2040.

“Wehave aboldambitiontomeet theclimatechangechallengesand enhancethevalueandcompetitivenessoftheNewZealandagricultureindustryontheglobalstage, whilerecognisingtheimportanceof intergenerationalstewardship,kaitiakitanga,oftheland,”saysMcNee.

Methanefromruminantanimal digestionmakesup40percentofthe totalagriculturalemissions.Theagricultureindustryinturnproduces almosthalfofthecountry’sgreenhousegasemissionswhileproviding 75percentofthetotalgoodsexports.

TheCentreforClimateAction JointVenture,establishedas alimited liabilitycompanyinFebruary,was renamedAgriZeroNZandthenew brandingwaslaunchedatFieldays nearHamiltoninJune.“Thefirst namewasbitof amouthfulandsome peoplethoughtwewere alobby group,”saysMcNee.“Itwasn’tclear thatwewereinvolvedwiththeagricultureindustryandinvestments.”

DairycompaniesFonterraand SynlaitMilk;meatprocessorsSilver FernFarmsandANZCOFoods;fertiliserproducerRavensdown;andruralfinancierRabobank —together havingaccessto70percentofNew Zealand’sfarms —arepartneringwith theCrown,throughtheMinistryfor PrimaryIndustries,on a50-50shareholdingbasisinAgriZeroNZ

SirBrianRoche,leadingprofessionaldirectorandgovernmentadviser,ischairingtheAgriZeroNZ boardandisjoinedatthetableby AgResearchdirectorJessieChan;renownedtechnologyentrepreneur andinvestorSirNevilleJordan;executivedirectorstrategicgrowthat AucklandUniServicesGregMurison; andformerFonterrachiefoperating officerFraserWhineray.

AgriZeroNZhasformed ateamof 11staffandisbusyidentifying innovativecompaniestoinvestin andassessingwhethertheirtechnologiesandsolutionswillworkinNew Zealand.Ithasalreadymadethree investments.AgriZeroNZtook a$1.8m stakeinWaikato-basedRuminant Biotech,whichisdeveloping aslowrelease,biodegradablemethane-inhibitingbolusforlivestock.

Thebolus,orball,withactiveingredientsisswallowedbytheanimal andsitsinthestomachforuptosix months.Theingredientsarereleased overtimeandhavetheeffectof reducingmethaneemissions.Initial

trialsshow a70percentknockdown ofmethaneoversixmonths.RuminantBiotechisaimingtolaunchitas acommercialproductin2025.

Globalproductionofmethane fromruminantanimalsequatesto 200megatonsperyear,andthe companyaimstohave100mcows aroundtheworldusingthebolusby 2030,representingabout10mega tonsofemissionsreductionannually.

AgriZeroNZhasprovided$2.5m fundingtowardsthemethanevaccineandinhibitorsprogrammerun bytheNewZealandAgricultural GreenhouseGasResearchCentreat MasseyUniversityinPalmerston North.McNeesaysthevaccinehas

internationalinterestandcouldbe usedinAfricaandIndiabutitrequires moreresearch.

Themethaneinhibitorsorfeed additivesprovideanopportunityto loweremissionsbyreducingtheactivityofmethane-producingmicrobes(methanogens)inthedigestive systems(rumen)ofruminantlivestock.

Thethirdinvestmentis$4mtowards a$17.7mmethanemeasurementfacilityonMasseyUniversity land.Thefacilitywillinclude12respirationchambers —bigenoughfor theanimalstoeatandmovearound in —andbecomethegoldstandard forcapturingandmeasuringallthe methaneemissions,saysMcNee. Lactatingdairycowswalkinsideand areindividuallymonitoredwithdifferentfeedadditives,whichcould includeboluses.

Thereareplentyofotherdevelopmentstoconsideroverseas,but McNeesaystheirvalueinNewZealand’suniquepasture-basedsystem needstobeevaluated.

London-basedZelp,incubatedat theRoyalCollegeofArt,hasdeveloped aharnessthatfitscomfortably on acow’snoseandaroundthehead andcapturesthemethanegas.The devicedoesn’tchangetheanimal’s movement,feedingpatterns,restand activityperiods.

Asthecattleexhales,themethane travelsthrough acatalystwhereitis oxidisedthenreleasedintotheairas carbondioxideandwatervapour.

Thetechnologyaccuratelytracks methanereductionandprovideskey dataforfarmersonwelfare,efficiency andfertility.

TheBovaerfeedadditive,developedby aDutchmulti-nationalchemicalscompany,hasEuropeanUnion MemberStatesmarketingapproval, aswellasinBrazilandChile.The productismadefromtwoingredients —nitrateandbio-basedalcohol.

Aftersuppressingmethaneproductionintheanimal’sstomach,

Bovaerisbrokendownintothesame naturalcompoundsagain,whichare alreadypresentandprocessedbythe cow’snormaldigestiveandmetabolic processes.

Theproducthasbeenshownto reduceemissionsby27-40percent dependingonthecow’srationand amountofmethaneinhibitoradded tothefeed —just aquarterteaspoon iseffective.

There’salsoasparagopsisseaweed,whichcouldbeusedin abolus andfedtotheanimalstoreducetheir methaneemissions.

McNeesaysAgriZeroNZwillinvest instart-upsandfacilitiesandmake suretheresearchisundertaken.

Theywillalsoworkwiththecompaniesandregulatorstogettherequiredapprovalsandmaketheproductscommerciallyavailable.

“Weseetheimportanceofinvestingintoolssofarmerscanreduce emissionsratherthantaxingthem andhavingtoreducetheirlivestock numbers,”hesays.

HeWakaEkeNoaproposes alevy ortaxof$110pertonofmethanein 2025andincreasingto$170-$350a tonby2030.

Thelevyisexpectedtoreducethe amountofmethaneNewZealand’s livestockreleaseintotheatmosphere byupto47percentby2050.But somefarmerswouldneedtoreduce theirherdstomeetthosetargets whichtheyfearwoulddrivethemout ofbusiness.

Ontheinternationalfront,food giantssuchasNestle,Mars,Danone andthebigsupermarketchains SainsburyandTescowanttosee loweremissionsondairyandmeat products.

Nestlehasset atargetof20per centreductioninemissionsfrom customersandsuppliersby2025and 50percentby2030.Marshas a27 percenttargetby2025andDanone 30percentreductioninmethane emissionsby2030.

McNeesaysNewZealand’sglobal customersaresettingambitiousreductiontargetsforgreenhousegases andifwecan’tmeetthem,then exportrevenuethathasunderpinned ourlivingstandardswillbeunder threat.

“Wemustconfrontthisrealityand worktogetherwithfarmersonpracticalsolutionstomeetthischallenge,” hesays.

“I’mconfidentthatby2030there willbe arangeoftoolsforthefarmers tochoosefromandbeabletosignificantlyreducemethaneandnitrousoxideemissionsandbuildresiliencetoclimatechange.”

AskedifAgriZeroNZwascompetingwithLICandCRV’smethane researchprogramme,McNeesays: “No,weareaddingtothetoolsand technologiesavailable.Themorethe merrier.

“It’sgreatifemissionsarereduced throughgeneticsbutthat’sjustone ofmanytraitsinanimalbreeding ability,”saysMcNee,whoistheformerchiefexecutiveofLIC.

● AgriZeroNZisanadvertising sponsoroftheHerald'sAgribusiness andTradereport

Agribusiness &Trade GrahamSkellern

Breedinglow-emittingdairyherds

Aground-breakingindustry partnershipisgettingcloser tointroducingdairyherds tothecountry’sfarmsthat emitlowermethanegasesandmeet climatechangechallenges.

“We’veidentifiedthatwecanreducetheoverallmethaneoutputper animalwhilestillincreasingproduction.It’sreallyamazing,”says DavidChin,chiefexecutiveofLIC.

“NewZealandneedstocontinue beingthemostemissions-efficient producerofmilkintheworld,andthis initiativewillbe agreattooltohelp farmerscontinuetodojustthat.

“Wearemotivatedbyresearch anddevelopmenttomakesurewe stayontopandtohelpmeetthe(net zero)carbonemissionstargetby 2050,”saysChin.

LICteamedupwithcompetitor CRVandLandcorpPa¯muFarmsto run amethaneresearchprogramme, beingfundedbytheNewZealand AgriculturalGreenhouseGasResearchCentre.

Betweenthem,LICandCRVsire morethan90percentofthe4.9 million-strongnationaldairyherd. Theresearchprogramme,nowinits thirdyear,links abull’sgeneticsand itsmethaneemissionstogivedairy farmerstheabilitytobreedmore climate-friendlycowsthatproduce lessmethane.

Theresearchisplannedtofinish in2025.Bythenallartificialbreeding bullsfromLICandCRVwouldhave amethanebreedingvalue,andby 2026farmerswouldbeabletoselect bullsfortheirownbreedingprogrammesandproducelowmethaneemittingcows.

Chinsaystheprogrammeis agreat exampleofindustrycollaboration usingresearchanddevelopmentto solve anationalproblem.

“Thecoolthingaboutthesolution isthatiftheprogrammeissuccessful, wecanpotentiallysee a5-10percent reductioninmethaneoutput —that’s ameaningfulcontributiontolower-

ingmethanegasemissionsonfarms. Ithasthepotentialtomake areal differencetofarmersinthefutureby helpingtoensureemissions reductionsdon’tcomeatthecostof reducingmilkproduction.

“Itaimstohelpsolvethefarmers’ challengesofbeingbothprofitable andsustainable,”saysChin.

Resultsfromyearone,wherethe feedintakeandmethaneemissions from281bullsweremeasured,found geneticvariationintheamountof methaneemittedafteraccountingfor thefeedeatenbythebulls,withthe lowestbullsemittingaround15-20 percentlessmethanethanaverage.

Eachyearthenewintakeofyoung bullstoLICandCRV’sSireProving Schemes —settofatherthenext generationofdairycows —havetheir methaneemissionsmeasured.

AtthePa¯mufarmsnearTaupo¯, 400heifercalvesarebeingborn— 200fromlowmethane-emittingbulls and200fromhigh-emittingbulls. Measurementswillbetakenfrom theirdaughterstoseeifthegenetic variationisreplicated.

Undertheresearchprogramme, thebullsareenticedtovisit aspecial methanemeasuringdevicebyofferinglucernehaycubestokeepthem inthemachineforthreetofive minutes.Methanefromthebulls’ burpsisthenmeasuredeverytime theyvisit,normallythreetimes aday.

“We’vefoundthere’s agreatdeal ofvariationinmethaneemissions amongstthehundredsofbullswe tested,”saysChin.

“Thehighest10percentofemitters producemorethan28gramsofmethaneperkilogramoffeed.Thelowest 10percentproducelessthan18 gramsperkilogramoffeed.

“Becauseofthisvariationweare startingtobreedfromlowmethane bulls.Thefirst-yearresultsfromthe programmefoundthat abull’sgeneticsdoplay aroleinhowmuch methanetheyemit.Ifwearemilking fewercows,thenweneedtobreed betterones,”saysChin.

LICandCRVhaveanopportunity tobreedthenationalherdwithlow methanegenetics,andChinsaysthe beautyisthatfarmers,whostillhave

Themethaneresearch programmeis agreat exampleofindustry collaborationusing researchand developmenttosolvea nationalproblem.

DavidChin

toinvestintheproduct,won’tneed toalterhowtheyfarm.

Furtherreductionscanbemade byadoptingnewground-breaking technologiesintheareasoffeed additivestolowermethaneemissions.“Thegreatthingabout agenetic solutionisthatgeneticsispermanent andcumulative,”hesays.

ChinsaysLIChasinvestedheavily ingenomicscienceandtechnology todeliverresultsforfarmersata fasterrate.“Thishasenabledusto predictgeneticabilityandidentify eliteanimalssotheycanbeputinto thebreedingschemeearlier.

“Farmersareusingourpremium bullteamstobreedwithhighgenetic meritcowswhichproducemoremilk andhave aloweremissionsfootprint perkilogramofmilksolid.”

Adairycownowproducesaround 400kgofmilksolids, afarcryfrom the188kgforanaveragecowinthe 1950s.Furthermore,LICcandemonstratethatmoreefficientcowshave reducedmethaneemissionsby12per centperkilogramofmilksolidsover thelast32years.

“Ourgenomicscienceishelping Kiwidairyfarmersbreedthebest cowsfaster,”saysChin.“Thebest cowsaremoreefficientatturning feedintomilk,weighless,produce moreandaremoreemissionsefficient.”

Inanotherinitiativeaimedatclimatechange,LIChas aheattolerance programmeunderwaytobreedcows thatcanwithstandwarmertemperatureswhilemaintaininghighgenetic meritandmilkproductioncapabilities.Heatstressisbecomingmore commonindairyherdsandthedays areexpectedtogethotter,withNIWA predictinganincreaseof0.7-1degree Celsiusby2040.

LICisworkingon abreedingprogrammetoincorporatetheheattolerantslickgeneintoexistingelite NewZealanddairyherds.Theslick geneisfoundincertainbreedsof cattlelikeSenepol.Theircoatsare shorterandshinierandthegenegives thecattletheabilitytobetterregulate theirinternalbodytemperaturewith anincreasedcapacityforsweating. Chinsaysiftheprogramme progressesasplanned,farmerswillbe abletobreedheattolerantcowsin thenearfuture.“Wedon’twantheat tolerantanimalsthatarenotvery efficient;wehavetobesureoftheir geneticmerit.”

LIC,anagri-technologyandherd improvementco-operativethat startedintheWairarapain1909,is ownedby9000dairyfarmers aroundthecountry.Theco-op,based inHamilton,has1000studbullsand inseminatesaroundfouroutoffive dairycowsinthecountry.

Chin,whojoinedLICin2006, becamethechiefexecutiveoneand ahalfyearsago,movingupfrom generalmanageroperationsandserviceandresponsibleforitslaboratories,andfieldteamswhodeliveronfarmservicesincludingartificial breeding,herdtestingandFarmWise consultancy.

Beforethen,hewaschieftransformationofficer,centralNorthIsland manager,leadkeyaccountsmanager andmarketingmanager.

Chinislovingthenewrole.

“Everyday Iwakeupandcanget involvedwiththingsthatmake abig differencetotheeconomicwellbeing ofthecountry.Climatechangeis abig challengefortheagriculturalsector andwewillcontinuetohelpbreed moreefficient,carbon-friendlycows.

“Weareactinginthebestinterest offarmers.Wecanmake abigdifferencetotheirlivesandfarming practices.It’sincrediblyrewarding.”

● LICisanadvertisingsponsorofthe Herald'sAgribusinessandTradereport

Themethaneresearchpartnership,fromleft,DavidChin(LICchiefexecutive),AndrewMedley(CRVoperationsmanager),andMarkLeslie(Pa¯muchiefexecutive).

Robotsarepoisedfortakeover

Humans usedtobe muchcheaperand moredexterous.

Thoseadvantages areeroding,writes

SarahMurray

Theirmachineslookmore likeminiatureflyingtoys thanautonomousfarming tools,butresearchersat Harvard’sWyssInstitutebelievetheir RoboBees —whichcanachieveverticaltake-off,hoverandsteer —could eventuallyperformtaskssuchas croppollinationandenvironmental monitoring.

Sofar,theseRoboBeeshaveyetto operateoutsidethelab,andcommercialisationremainsfaroff.Buttechnologicaladvancescombinedwith labourshortagesmeanthatmore robotsarebecomingeconomically viableforuseonthefarm.

“Thelow-hangingfruithasbeen usingtheminpolytunnelsandglasshouses,wheretheydon’tgetmudand rainonthem,”saysBelindaClarke, directorofAgri-TechE,anorganisationthatsupportsinnovationinagriculturaltechnologies.“But,now, they’removingoutintothefield.”

Theirincreasingcapabilitiesare makingpossible amoretailored, plant-by-plantapproachtocultivationthatcanminimiseinputssuch aswaterandagrichemicals.

California-basedFarmWisehasdeveloped aweedingrobotthatuses computervisionandartificialintelli-

Somethingrunbya rechargeable batterycouldbe poweredbysolar, whichopensupa newopportunityto userobotsina sustainableway.

BelindaClarke,directorofAgri-TechE

gencetodistinguishweedsfrom crops,cuttinglabourcostsandenablingfarmerstouselessherbicide.

Untilrecently,agriculturehad beenslowtoadoptrobots.Highlevels

ofcapitalinvestmentandlimited seasonaldeploymentmadeithard forthemachinestogeneratevalue. “Ithasnotbeen acrackinginvestment themeuntilnow,”saysAdamAnders, managingpartneratAnterraCapital, afoodandagricultureventurecapital firm.

Butthatischanging,hesays.In matureeconomies,restrictionson migrantlabour,ageingagricultural workers,and alackofenthusiasmfor back-breakingworkthatisdulland dirtymeanfarmworkerscostmore andarehardertofind.IntheUS,farm workers’inflation-adjustedhourly wageroseby28percentbetween 2000and2022,comparedwith17per centfornon-farmworkers,according totheUSDepartment ofAgriculture. Becausetechnologiessuchascomputervisionandmachinelearning enablerobotstoidentifyandrespond

appropriatelytoobjects,somemachinescannowweedorpickfruitand vegetableswith aspeed,accuracy andreliabilitythatwasonceachievableonlybyhumans.

Moreover,“softrobotics”,using rubbercupsorsmallbeanbags,can gentlyclaspandremovedelicate, high-valueproducesuchaspeaches andraspberriesfromplantswithout damagingthem.

TjarkoLeifer,FarmWise’schief executive,anticipates anewwaveof robot-drivenagriculturalautomation. “Computerscannowsee,andhave thedexteritytoreplacesomeofthese humanjobs,”hesays.

Theremaybesustainabilitypayoffs,too.Dronesandrobotsinthefield canusesmartsensorsandcomputer visiontocollectandtransmitdata andimagesinrealtime —oneverythingfromlocalweatherandsoil

conditionstoplantgrowthrates. Applyingmachinelearningtosuch largevolumesofdatacanalsogeneratenewinsightsintohowand wheretocultivatecrops.

And,bytrackinghowplantsin differentpartsof afieldrespondto inputssuchaswaterandchemicals, robotscanhelpfarmersminimiseuse oftheseresources.

Anotherbenefitofthenextgenerationofrobotsisthattheyaresmaller thantraditionalmachinery,suchas combineharvestersandtractors.

“Wewanttheselittlebeaststobe lightandagile,”explainsClarke. “Somethingrunby arechargeable batterycouldbepoweredbysolar, whichopensup anewopportunity touserobotsin asustainableway.”

Beinglightermeansthemachines compactthesoillesswhenmoving overit.Compactionmakesitharder forplantstoaccessnutrientsandfor soiltoholdwater.

“Youwantthesoiltoactlikea spongesothatthewateristhere whenthecropneedsit,”saysClarke.

Anotherhurdletowidespread adoptionoffarmrobotsisregulation. “Ifyou’retalkingaboutthingsthat operateon afullyautonomousbasis on afarmorinthesky,outofeyesight, therearestilluncertainties,”notes Anders.

“IntheUS, adronecan’toperate outofeyesight,whichmoreorless defeatsthepurposeintermsofgettingtoscale.”

However,hethinksthisislikelyto change,asgovernmentsseektoincreasefoodsecurityandthesustainabilityoffarming,andalsoasautonomousmachinesbecomemoreintelligent,andpeopleadjusttotheir presence.

—FinancialTimes

Photo /123rf

Theopportunitiesof scale

NewZealandcompanies needtodig deepinto thechanging tastes of China,reports FranO’Sullivan

Irrespectiveofthetimeitis takingtheChineseeconomyto fullyrebootinthewakeofthe Covidpandemic,thesheerscale ofmarketopportunitiesinChinais toogreatforNewZealandfirmsto ignore.

Closeto50percentofsuchfirms tradingwithChinaplantoincrease theirChineseinvestmentfootprint overthenextthreeyears.

Thatisoneofthekeyfindingsfrom asurveyofNewZealandcompanies tradingwithChina.

TheinauguralBusinessOutlook surveybytheNewZealandBusiness RoundtableinChina(NZBRIC)willbe formallyreleasedinShanghailater today.

Frompreliminaryresultsreleased atlastmonth’sChinaBusinessSummit —andatanearlierShanghai functionforthePrimeMinister’s Chinamission —thetrendisclear.

Nearly95percentoftheNew Zealandcompaniessurveyedfeel thatthescaleoftheopportunityin Chinaisimportanttotheirfuture prosperity,”saysDavidBoylewhois chiefexecutiveofPrimaryCollaborationNewZealand.

“Growthis amajormotivatorfor whywe’retrading,”saysBoyle.“The secondmajormotivator,ofcourse,is marketprofitability.

“Idon’tthinkit’sanysecretthat someofthebestpricesandthebest marginsforNewZealandcompanies canbeachievedinChina.

“Thatistestimonyinnosmallpart tothequalityoftheproductsand servicesthatwe’resellinginChina.”

Thestrengthofchannelpartner relationshipsandtheabilitytoutilise localmanufacturingalsofigured.

Theroundtablesetouttogauge theChinesebusinessenvironment fromrepresentativesofNewZealand companiestradingwithChina.How didtheyfeelcomingoutofCovid-19? Andwhatwasthetemperature aroundthebilateralrelationship betweenNewZealandandChina?

Thesurveyfoundgeopoliticswas thesecondbiggestinvestmentrisk, secondtogrowingdomesticcompetition.Notsurprising,giventhelengthy tradewarbetweentheUnitedStates andChina.

Butthesurveyunderscoredfirms werelookingtotheNewZealand Governmenttomaintain acordial workingrelationshipwithChina.

Thefirmsoffsetgeopoliticalrisk againsttheabilitytoaccesssuchan enormousmarket.Otherperceived risksincludedregulatorychange,and theregulatoryenvironment.

Some46percentofthecompanies surveyedwerefoodandbeverage companies;professionalservices comprised18percent.

“Unsurprisingly,givenwhowe weresurveying,73percentofthose companieswereexportingfromNew ZealandtoChina,”explainedBoyle. “Therearevitaltwo-waytradecomponents.Twoofourbiggestimporters alsofeatured,theWarehousegroup andMainfreight.

About25percentoftheNew Zealandcompaniessurveyedhave 20-40percentoftheirrevenuesfrom China.

“Idon’tthinkI’mgivingawayany secrets,if ImentionthatZespriand Fonterra,twoofourbiggestcompanies,areinthatgroup,”Boyletold theChinaBusinessSummit.

Headds81percentofthecompanieshaveChinaintheirsightsas oneoftheirtopthreetradingdestinations,orworkingin abilateral relationship:“Nowthat’sreallyquite significantanditstillspeakstothe competencythatNewZealandbusinesshasinChina.”

ThelengthyCovidpandemicacceleratedthemovetoonlineplatformsinChina.

“CompetinginChinanowmeans embracinge-commerce.

NZBRIC

TheNewZealandBusiness

RoundtableinChina(NZBRIC)was formedinAugust2018by agroup oflike-mindedbusinessesto promoteNewZealand’sbusiness interests.It’sbeendescribedasa “defactoChamberofCommerce”. Thefoundationmembersare Fonterra,Zespri,SilverFernFarms, theWarehouseGroupandPrimary CollaborationNewZealand.

Corporatemembersinclude: Synlait,TheBeautyLab ,RedSeal. UMS,Achernvr,Richoard,MitoQ, GrinNaturalandTatua. MFATandNZTEarealsoaligned.

Dynamic,innovative: MajorChinainsights 1

Chinaisbig,dynamic,fast changingandinnovative,and presentsmanyopportunities togrow.

● Thereis aconsumercommitment tohealthand aGovernment commitmenttosustainability,with both avibrantyouthcultureandthe emergenceofthebiggestelder populationintheworld.

● Weneedtounderstandthe nuancesofallthesedifferentniches, marketsandtrends.

● Andthisis aChina(and aNew Zealand)thatishungrytore-engage andtoreconnect.Thisreconnection requiresrelationshipsamongst people,longterm,andisdependable onfacetofacedealings.

experiences,anagingpopulation whichneedstobefedand entertained.

● TheChineseGovernmentdrives someoftheseopportunities.We canmapourselvesto“Healthy Chinaby2030”,and“NetZeroby 2060”,etc. 2

Wehavesome superpowersthatwecan bringtobearonthese opportunities:

2

Overall,thereis astrong realisationofhowwellNZ Inc,publicandprivatecan worktogether.Whenwego offshoretogether,weunitearound acommoncause.

● Withinthiswehavestrengthin diversity.Diversityofpeople, sectors,cultures,approaches.

● Werealiseandappreciatethe strengthofthediplomaticplatform thathasbeenbuiltupoverprevious andcurrentgenerationsand governments. 3

Theclarioncallisthatwe growwithChina,notjustsell toChina.Wearenotjust trading,wearepartnering andsharingformutualbenefit.This hasdelivered alotsofar.

ChinaOpportunities

Withbigscalecomesbig opportunities 1

Thisisnotjustone opportunity,butmany:

● YoungvibrantChinese consumersdemandingnew

● BrandNZisstrong.Butitcould bestronger.Weneedtoleaninto storytellingandnarrativeatall levels.Weneedtobringournuance andourniche-facingcompany brands(PikPok,Rocketwerkz,Les Mills)withintheoverallhaloofthe countrybrand.Provenancebyitself willnotdeliver.Wearestillunderinvestedinthisarea.

● Wehavegoodsynergyacross oursectors,withlotsofopportunity forcollaborationandcrossfertilisation.Tech,Gaming,Fitness andservicesinnovationcanruboff onFoodandBeverage,whichcan teachothershowtoscaleetc.How mightwesystemisethis collaboration?

● Wehaveanessenceaboutus thatisgoodtodealwith.Pono (integrity),Tiaki(Care)iswhowe are.Thisunderpinsour relationshipsandprovidesa platformtodrivefurtherreach.

● Wehave astrongpublic/private/ NewZealand/Chinaplatformwhich iscarefullybalancedandcalibrated, andwillcontinuetoneedattention andinvestmentovertime.

LesMillsCEOCliveOrmerod formedtheseinsightsfromthe PrimeMinister’smissiontoChina inJune2023.

“Thetransformationandbuying habitsinChinahasbeenphenomenal inthelastthreeyearsbecauseso muchofChineseconsumerismwas conductedorconvertedoverto online,andthatwassignificant,”says Boyle.

“Thesecondthingisaboutlocalisation.Thisis averyimportantpart ofthechanginglandscapeofChina. Andthethirdareaisexpansioninto thesecond,third,andfourthtier cities.”

Boylebelievescompaniesneedto digdeepintochangingtastes.“Ifwe getthere,thenwe’regoingtocontinuetobesuccessful.

“There’ssomuchthatChinahas changedinthelastyearandinthe previousthreeyears,thatstaying veryintimatewiththeChineseconsumptiontastesisreally,reallyimportanttothesuccessofourcompanies.

Butitisnotallrosy.

Thesurveydisclosedthat amajorityofNewZealandcompaniessurveyedhaveseenevidenceofChina’s Covid-19economicreboundintheir financialresults.but asignificantproportion,44percenthavenot,and only 9percentofcompanieshave seengrowthorrecoveryratesabove 20percentyear-on-year.

Risinglabourandinputcostsalso figureaschallenges —notsimply increasingcompetitionfromChinese companies(seegraphic).Thisisimpingingonprofitability.

Some21percentofsurveyrespon-

dentsreliedonChinafor80-100per centoftheirglobalrevenuesin2022, andanextra15percentreliedon Chinatocontribute60-80percentof 2022revenue.

Manycompaniesmorerelianton Chinaweresmall-tomedium-sized enterprises.

Boyleexplainedtonewsmedia thatinChina,health,nutrition,wellbeingandproteinbecame afocusfor consumersduringlockdownsbut gavelocalbrandsthechancetograb marketshareoffforeigncompetitors.

“Localsupplierswereabletoadapt wayfasterthanforeignexportersand wesawcompetitiverivalryrising veryquicklyfromlocalsuppliers.”

Supplychainissuesaddedtothese opportunitiesasitstartedtogetmore difficultforforeigngoodstobe broughtintothecountry.

“Ifyoudidn’thavecontrolofyour supplychainsomebodyelsewas takingyourspaceontheshelf,orthey wereabletograbmarketshare,”he toldreporters.

Irrespectiveotallthesechallenges, 35percentsayChinawillremainthe toppriorityintheirorganisation’s globalinvestmentplanswith afurther46percentsayingitwillbeone ofthetopthree.

Importantly,morethan60per centexpecttheircompany’stotal investmentinChinatoincreaseover thenextthreeyears;justunder25per centpercentsaytheincreasedinvestmentwillbesignificant —more than20percent.

Sweetertimesaheadfor

After a“horrible”coupleof yearswhichhasturnedthe moodofthesweetheartexportkiwifruitindustrysour, globalmarketerZesprihassome sugartooffer.

ChiefexecutiveDanMathieson believesthatafter arelentlesscaning byCovid,labourshortages,extreme weatherevents,supplychainturmoil, inflationandthespawnofallthis, smallerharvestsand acostlyand potentiallyreputation-damagingfruit qualityproblem,the$4-plusbillion industrycannowswitchfromtactical reactionmodeandresumegrowth.

Thisisanindustrywhichfought itswaytobluechipexportstatusin recordshortorderaftertheimported diseasePsadestroyedprettymuchits entiregoldfruitoperationsin2010. WhileitisMathieson’sjobtosound positive,hisconfidenceisnottobe dismissedlightly.“It’sbeen ahorrible toughyearforourgrowersonthe backof atoughyearin2022 we werehitwithfundamentalchanges tothewayweoperate,mainly throughlackofpeoplecoming throughwhiletheborderswereshut, andweathereventscontinuouslyhittingusoverthelast24months,”he says.

“We’vecertainlyhadtopivotfrom longer-termstrategytofocusingon theimmediatecircumstances confrontingus,sothere’sbeen ashift.

“Now Ifeelwearemovingback asanindustryto aplacewherewe startfocusingagainondelivering greatqualityandgettingvalueback togrowersinNewZealand.”

The2023financialyearwas ayear Zespriwouldratherforget. Itsnetprofitaftertax,including

revenuefromsellinggrowing licences,was$237.8million, comparedto$361.5mtheprevious year.Netprofitbeforetaxwas$331m, against$505minFY22.Globaloperatingrevenue,includinglicenceincome,was$4.22billion,comparedto $4.47binFY22.

Sub-qualityfruitissuesand associatedcostsmeant$534mless availabletopaygrowers.InFY22the

fruitqualitybillwas$307m.

Zesprisold183.5mtraysofNew Zealand-grownandoffshore-grown fruit,downfrom201.5mtraysinFY22. ItsNewZealandsupplysegment made alossof$22.1mduetohigher costsandreducedfruitvolumes.The previousyearitmade aprofitof $24.9m.

Recordgrowerreturnsofrecent yearstook adipwithgreenandgold fruitperhectarereturnsoutsideeven thelowerendofZespri’sforecast ranges.TotalNewZealand-grown fruitandservicepayments,including aloyaltypremium,fellto$2.2billion from$2.47bin2022.

ButSingapore-basedMathieson sayswiththefruitqualityissues addressedat apan-industrylevel,the labourforcerecoveringinthe orchardandpost-harvestsectorsand qualityfruitgettingthroughto marketsin atimelyway,thingsare lookingup.

“Fruitismovingwell,we’regetting astrongsalesrun-rate,goodpricing andshouldcertainlysee agoodincreaseinreturnstogrowersthis year.”

Hesaysdespitethechallenges— andthiscurrentseasonhasbeena toughonetoo —priceshavebeen “strong”.

That’snottosayallissuesarein therear-viewmirror.

ColinBond,chiefexecutiveof growers’representative,NewZealand KiwifruitGrowers’Inc,says“many growersareexperiencingseverefinancialstrainonthebackoflow returnsandincreasingcostsforproducingkiwifruit.”

Lowyieldsandlowerpricesmean greenfruitproductionhasbecome

Fruitismovingwell, we’regetting astrong salesrun-rate,goodpricingandshould certainlysee agoodincreaseinreturnsto growersthisyear.

DanMathiesen

thekiwifruitindustry

unprofitableformostbuttopoperatorsofsize,whilegoldfruitgrowers aresaidtobedisappointedbyZespri’s latest2023-24seasonorchardgate forecastof$10.50-$12pertray,given thesmallercrop.SunGold,whichreplacedthePsa-devastatedgoldvariety,isZespri’sbest-seller.

Asonegreengrowersaid:“Even ifDancouldgetus$8 atray,it wouldn’thelpwiththeyields.” Zespri’slatestgreenforecastis $7.25-$8.50pertray.InFY23theaveragegreenpertrayreturnfellto$5.38.

Mathiesonnotescontinuingfruit qualitycostsarereflectedinthelatest forecasts.

“We’restillseeinghighquality costs butwe’realsogettingstrong priceincreasessothat’spositive.”

Bondsaystheindustry’snotout ofthewoodsyetonthefruitquality issue.

Whilecriticalelementsofanindustryplantocountertheissueare largelycomplete,hesaysthisseason isfarfromover.

“Growerswillrecalllastyear’squalityissuesonlybecameapparentat theendoftheyear.Neverthelesswe expecttheresultsofthesevenpoint plantocontinuetosupportquality movingforward.”

Growersarekeentoknowwhen Zespri’sNewZealandsupplysegment willreturntoprofit.Itmade alossof $22minFY23.

MathiesonsaysinFY24 —providingfruityieldslift.

“Wearehopefulwe’llseevolumes returnin2024 with areturnto average yields of around 14,000 trays perhectareforgoldandover10,000 traysperhectareforgreenandmore vinesoverallintheground,thatwill takeourrevenueupsignificantly fromwhereit’sbeenthelasttwo years.

“Andwithstrongpricingfromthe marketwe’rehopefultobeabletoget backinto aprofitablesituationnext year —providingyieldscomeback.”

SowhatelseistopofmindforNew Zealandkiwifruitgrowers —mostof whom(2800)supplyZespribecause ithasthestatutoryrighttoexportall thiscountry’skiwifruit,excepttoAustralia.(Thecompany,ownedbycurrentandformergrowers,isalsosuppliedby1500offshoregrowersand post-harvestentities).

There’squite alist.Improved returnsfromZespriisupthere. There’sconcernaboutwhethergreen varietyHaywardhas afuturegiven manygrowersarereportedlybarely breakingevenormakinglosses.Anotherworry:howmuchlongerthe EnvironmentalProtectionAuthority willallowgrowerstousethechemical Hi-Caneintheirorchards.

Thechangingweatherisbigone, particularly,warmerwintersandlack

of“winterchill”tohelpfruitdevelopment.

Anigglingworrygivenmanypostharvestoperatorshavedeclared lossesthisyeariswhethertheywill havethecapitaltoinvestinthe infrastructureneededtomeet awave ofbiggerfruitvolumes;andwhether thereisenoughcoldstorageforthese volumes.

Zespri’srollingfive-yearoutlook, accordingtothelastupdatein December,providesforanincrease intotalNewZealandclassonefruit from164mtraysin2022to229mtrays in2027.Thisisequivalentto39per centvolumegrowthandincludesthe estimatedcommercialvolumesof thenewZespriRubyRedvariety.

SowhatdoesMathiesonhaveto sayabouttheprospectsforthegreen Haywardvariety,theoneyoufindin localsupermarketsandwhichdoes notrequire aZesprilicencetogrow?

Zesprileaderssayhowtocapture betterreturnsforHaywardfruithas exercisedtheirmindsforsometime. Greenkiwifruitaboundsinglobal marketsanddespiteboastingitoffers thebestqualityexampleintheworld, Zespricanstruggletocommanda consistentpremium.

Mathiesonscotchesanynotion ZespriwillnotwantHaywardsupply inthefuture,althoughthecompany expectsvolumestoreduceovertime, andhopestooffergrowers anew, sweeter,higheryieldinggreenfruit varietyby2026-27.

“Wewantgreenintheportfolio,it isthebackboneoftheindustryand stilloccupies asignificantshareofthe

supermarketshelfandhas aplace withconsumers.Wehavemanyloyal consumersroundtheworldwho valueitforitssweet-sourtasteand healthbenefits.

“Wehavesomeofthebestgrowers intheworld,andthereisstrongworld demand,”saysMathieson.

“It’sbeen atoughtimeforgreen globally.ItalyandChilehavehada toughtimetoowithweatherevents, Psachallengesandtheyhaven’tbeen abletogetgreatfruittomarket.”

As aresult,globalgreensupplyhas shrunk.Chile’sgreenproductionhas dippedfrom250,000tonnes ayear toabout100,000tonnesinthepast fiveorsoyears,saysMathieson. Italy’sproductionthisyearfellfrom 600,000tonnestoaround200,000 tonnes.

“AlotofthatwasHayward.”

ZespriinFY23sold55.7mtraysof NewZealand-growngreenfruit,22 percentdownonthe2022season. NewZealand-growngoldfruittrays numbered93.6m,down 3percenton thepreviousyear.

Mathiesonnotesthatdespitethe challengesofthepasttwoyears,“in 2022(green)pricingwasupover10 percentandin2023we’veseenover 10percentagain”.

“Whenwecanactuallygetthefruit through,there’sstrongdemand.”

NZKGI’sBondcautionsthatwhile it’sassumedthestrongvalueZespri isforecastingforHaywardexports willtranslateintostrongtrayreturns forgrowers,Haywardvolumeissignificantlydownonlastyear.

“Manygrowerswillhavesig-

nificantlyreducedreturns,regardless oftheincreasedreturnspertray.” Ditto,hesays,forgoldfruit.

Zespribelievestheoutlookfor weatherpatternsisimproving,which Mathiesonhopeswilltranslateto betterproductionandyieldsfor greengrowers.

“Ifwegetgoodpricingbackand growersabletogrow agoodyieldand Zespricontinuesgettinggreatvalue back,withallthatworkingtogether thereis aviablepathwayforwardfor greengrowers.”

Thatsaid,Zespriisinvesting “heavily”indevelopingnewgreen varieties.Fourarebeingtrialledand theaimistopresentatleastoneto growersbythe2026-27season.

Onthespikyissueofwhetherthe industrywillloseits“critical”growing toolHi-Caneorhydrogencyanamide, achemicalsprayedonvinesinwinter tomimic agoodfrostandhelpbuds form,Mathiesonisalsosoothing.

TheEnvironmentalProtection Authority(EPA)proposestobanits usein10yearsduetotoxicityconcernsbutafter astrongpushback fromgrowersandwhattheauthority calls“significantnewscientificdata andriskassessmentscompletedby overseasregulators”,it’sreassessing thecase.

TheindustryhasnoviablealternativeforHi-Cane.MathiesonisconfidenttheEPAwillaccepttheindustry’sargument“thattheopportunities welloutweighanypotentialrisk”and “allowustocontinuetouseHiCane intothefuture”.

Butwhatifitdoesn’t,andanEPA-

imposeddeadlinearrivesbeforethe industryfindsanalternativetool?

“Weknowwehavetoinnovatefast werecogniseweneedtocontinue tofindalternativessothere’ssignificantinvestmentgoingintothat.

“It’sreallychallengingandwedon’t have aviablealternativeatthemoment.

“Wearefocusedonthatandhope thetheEPAwillunderstandthatand giveusthelongestpossibleperiodto beabletorespondto apotential worldwithoutHi-Cane.

“Thatsaid,webelieveHi-Cane, usedwell,iscriticaltogrowerstobe abletogrowproductivity.”

WarmingwintersisanotherconcernZespri’swatchingclosely.

Vinesneedcoolerdaysintheearly growingseasonandtheydidn’tcome inJune,thoughtherehavebeencold daysinJulyandAugust.

“Wenowhavetowaitandseethe impactonbudbreakaswegointo September,”saysMathieson.

Withrainfall,frostsandhailhitting at“unseasonal”timesinthepasttwo years,theindustrycontinuestothink aboutthreethingsinrelationto weatherchanges,hesays.

Bestlocationsforgrowing;varietiesthatsuitthoselocations;and responsestoweatherevents.

“Rightnowwe’reconcernedabout thelackofwinterchilldates.”

Meanwhile,hesaystheindustryis planningfor arangeofgrowing scenariosfromlowtohighcrop volumesandhowtorespond,with “critical”areasoffocusbeingquality managementandongoingmarketdevelopmentsomarketsarereadyfor volumegrowth,hesays.

Ongrowerworriesaboutthedepth ofpost-harvestsectorcapitalavailableforinfrastructuredevelopment tomeetthevolumescoming,Mathiesonagreestherehasbeen“a slowdown”ininvestmentinthepast coupleofyearsduetoevents.

“Atthemomentwebelievewe haveenoughcapacity,providedwe getenoughpeople(workers)coming backtotheindustry,tomanagethe volumeswewillhaveinthenextfew years.

Theindustry —Zespri,growers, post-harvestoperatorsandtheIndustryAdvisoryCouncil —isdiscussing thepost-harvestoutlooknow,he says,noting“sizeable”investment wentintothesectorbeforetherecent runoftroubles.

Zespriwillensure“anyinvestment plansarebuiltintolicencereleases”, hesays.“Thatinvestmentclearlywill bebuiltontheprofitabilityofthepostharvestsectorandthebiggestdriver ofprofitabilityisvolume.

“Sowhatweneedtoseeis areturn tothevolumeswesawpriorto2022,” saysMathieson.

Comvitaembarksonsustainablestrategy

TimMcCready Despitethepandemicandborder restrictions,NewZealandma¯nuka honeyexporterComvitawasableto elevateitsmarketshareinmainland Chinafrom39percenttoanimpressive60percent.

AndyChen,RegionalCEOAPAC forComvita,sharedthestorybehind thissuccessattheChinaBusiness Summitlastmonth.

Heexplainedthatthebrand’sNew Zealandoriginandreputationasthe largestma¯nukahoneymanufacturer hadbeenkeysellingpointsinthe past,butthesenarrativeslosttheir effectivenessseveralyearsago,resultingin aplateauingrowth.

ChenexplainedthattheChina marketisconstantlychanging.“Inthe last5000yearsofChina,theonly thingthathasneverchangedis change,”hetoldtheSummit.

“Chineseconsumersarevery open-minded.Theyembracenew

stuffeveryday,buttheyarealso impatient.Weneednewstoriesfor them.”

In2020,undertheguidanceof newleadershipledbygroupchief executiveDavidBanfield,thehoney companybegansharingthe“Why Comvita?”story.Comvitabegan highlightingitsstrengthsas abusiness —thatitisnotonly aleaderfromNew Zealandintermsofbeekeeping,but

alsoemphasisingitspositionasthe onlybrandworldwidetoensurequalitycontrolfrom“landtohand”,includingcomprehensivesoilhealth managementandrigoroustesting procedures.Storytellingaroundthese areashelpedComvitaconnectwith Chineseconsumersandsecurerapid growthintheChinesemarket.

In2022,Comvitaagainadapted, thistimeasking:“whatismorerele-

vanttoChineseconsumersafterthe pandemic?”

ChensaysComvita’sconsumers tendtobeupper-middleclass,welleducated,andenvironmentallyconsciousevenbeforethepandemic.As aresponse,Comvitaunveiledits“HarmonyPlan,”demonstratingitscommitmenttosustainability,carbon neutralityby2025,andbeewelfare initiatives.

Aspartofthis,Comvitaiscommittedtoachievingcarbonneutralityby 2025,andultimatelybecomingcarbonpositiveby2030.Itisminimising itsenvironmentalimpactthrough carbonreductionandimprovingthe circularityofitspackaging.

Comvitahascommittedtothe rescueof10millionbeesannually andaspirestoextendthisto100 million.Itisachievingthisbybeing attheforefrontofethicalbeewelfare standards,andthroughitsglobal partnershipswithdedicatedbeekeepersandrescuers,unitingefforts

toprotecthivesandupliftthewelfare ofbees.

AnotherkeyaspectofComvita’s HarmonyPlanisnurturingbiodiversityandrestoringnaturalecosystems.Itisplantingnativebushand treesacrossNewZealandandhas planstodosoinChina.Ithascommitted 1percentofitsprofitstolocal communities,givingemployees aday offeachyeartohelppeopleinthe communitiesaroundthem.

ChentoldtheChinaBusinessSummitthatthesenarratives,underpinnedbytangibleanddemonstrable actions,areresonatingwellamongits customers —particularlythoseresidinginTier-1Chinesecitiessuchas Beijing,ShanghaiandGuangzhou— andhaveenabledComvita’sremarkablegrowthintheregiontocontinue.

“Wearereal,wearegenuine,and weareleveragingourindustryknowledgeandexpertisetohelppeople andthecommunitieswhereverwe go,”hesays.

AndyChen, RegionalCEO APACfor Comvitaatthe 2023China Business Summit.

Raw logstohigh-valuebioproducts

NextmonthWellingtonentrepreneurWayneMulligan headsoverseason acapital raisingtripthatwilldefine hisboldbio-forestryplansforthis country.

WithTaiwaneseandSingaporean partners,Mulligan —thechiefexecutiveofNZBioForestry —wantsto transformtreeplantationbiomass intobiofuels,biochemicals,bioplasticsandotherinnovativematerialsthatcandramaticallyreducethe needforfossilfuelsandlowercarbon emissions.

“NewZealandisreallygoodat growingpinetreesbutnosogoodat turningthemintohigh-valueexports,”saysMulligan.“About36 millioncubicmetresoftimberis harvestedeachyearand22cu mgets exportedwithoutanyaddedvalue, withpricesgoingsouth.Logprices havefallen21percentoverthepast 18months.

“Wewanttoutilisethewhole resourceofthetree —rawlogs, thinningsandotherforestrywaste, fibreandsugars —andhelpforesters get abetterdealwithvalue-added products.”

NZBioForestry,establishedin 2018,hasconductedtrials,bypeeling 42tonnesofpinusradiatalogsinto decorativeplywoodandveneerata Malaysianfacility,andinTaiwan converting30tonnesofdrychipped pineinto achemicalplatform.

Mulligan,whohas aMasterof ManagementfromAucklandUniversity,says“wehavespentfive yearsonrefiningandunderstanding thechemicalpropertiesbasedon sugarstobuild achemicalplatform.

“Wehavetheyield,dataand analytics,andtheintellectualpropertyforbiochemistryandbioengineering.

“Ourtechnology(developedin Taiwan)hasbeenvalidated.Wewant totakeadvantageoftheglobalshift torenewablesandcreate anewvalue chain.”

Now,Mulliganisona missionto

Anearly-stageKiwiinnovatorwithAsia-Pacificconnectionsisdeterminedtoliftthe performanceofthetimberindustry,writes GrahamSkellern

scaleuphisbusinessandattract investment.Hewillbemakingpresentationstopotentialinvestorsin Asia,Japan,AbuDhabiandUnited States,aswellastalkingwithpotential customers,particularlythosewho wanttogetoutofusingcoalwithin threetofouryears.

NZBioForestryhas amemorandumofunderstanding(MoU)with JapanesebiochemicalscompanyRefineHoldingstodeveloporganic solventsfrompinusradiataforthe automotiveindustryincludingusein electricvehiclebatteries.

TheTaiwanesepartnersaredesigningbiochemicaladhesivesforthe micro-processingandsemi-cond-

Wewanttotake advantageofthe globalshiftto renewablesand create anewvalue chain.

WayneMulligan

uctormarketstokeepmobilephones, laptopsanddesktopcomputers together.Thedecorativeplywoodfor cabinetmaking,wallpanellingand

DevelopingbiofuelinNZ

Sincetheearly2000s,Crown ResearchInstituteScionhasbeen researchinganddeveloping abiofuel madefromforestrywasteandhas comeupwith abriquettethatcan beusedintraditionalcoalboilers.

Thehigh-densitybriquetteis largerthanotherbio-pelletsfound onthemarketanddonotfallstraight throughtheashgrateatthebottom oftheboiler.Scioniscontinuingto determinethebestgeometryand shapeofthebriquette.

Thebriquettehasachieveda densityof550kilogramspercubic metrewith adurabilitygreaterthan 91percent,qualifyingas acoal replacementformedium/low processheatsupply.Thermalcoal’s averagebulkdensityis700-800kg percum.

Initslargesttrialtodate,Scionis providingtheMuseumofTransport

andTechnologyinAucklandwith 250kgofthebriquettestorunone oftheirtramsfor aday.

Scionsays arenewableenergy sourcesuchasbiofuelisessentialfor NewZealandtomeetitsglobal climatechangecommitments.Scion isinvitingcompaniesto commercialiseitssolidbiofuel product.

Forestrymayholdthesolutionfor providingcoalburnerswith aclean andrenewablesourceofenergy. LastyearNewZealandburnedmore twomilliontonnesofcoal,largelyfor energytransformation,industrial productionandmanufacturing,and commercialheating. Eachyear,aroundthreemillion greentonnesofwoodresidue— bark,branchesandlow-qualitystems —remaininthecountry’sforests aftercommercialharvesting.

furniturecanbeproducedoutof Malaysia.

NZBioForestryhasbeentalking with aleadingNewZealandelectricitygeneratoraboutproducinghigh energybio-pelletstoreplacecoaland reducecarbongasemissions.

Mulligan’sultimategoalistoestablish afully-integratedbioforestry refiningplantincentralNorthIsland. Reachingtheplant’sfullpotential wouldneedaninvestmentinthe vicinityof$400m.

“Wecanstageitoverfiveto10 years,”saysMulligan.“Wecanhave thechippingsystemfor(solid)biopelletsupandrunningwithintwo years.Wecanbuildthedecorative plywoodfacilityandthefirstphase ofchemicalsrefining.”

NZBioForestryhasMoUswith localforestownersforpinusradiata supply,includingMaorientitiessuch asTupuAngitu,thecommercialarm ofLakeTaupoForestTrust.

Mulliganhashaddiscussionswith innovativeKiwicompaniesandorganisationssuchasScionaboutcreating asbio-forestryhub.

NZBioForestryhasteamedup withTaiwaneseKaiHsuanLinwho hasbeeninvolvedwiththetimber industryformorethan22years,and SingaporeanSweeYinLee,aninvestmentdirector.

Kaihas aBScinAppliedMathematicsfromtheUniversityofCaliforniaandMScinForestrySpecialised SystemsfromTexasA&MUniversity. Hefoundedseveralbiotechnology companiesanddevelopedanintegratedtimberconceptforbio-materialsincludingdryingandadhesive systems.

Sweehad a30-yearcareerinthe foodindustrywithMcDonald’sSingapore,managingoperationsandthe supplychain,andoverthepast20

yearshasbeen adirectorofArtal Asia, aBelgiumfamilyinvestment fundwithmorethanUS$8billion investedworldwide.

TheyarejoinedbyappliedscientistDrKamYinFahas adirectorof NZBioForestry.Hehas aBScandPhD inPolymerScienceandTechnology fromNorthLondonUniversity,and duringhisprofessionalcareerwasan AssociateMemberoftheMalaysian InstituteofChemistry,Chartered ChemistoftheUKRoyalSocietyof Chemistry,and aMemberofthe AmericanAssociationofClinical Chemistry.

NZBioForestryhasdevelopeda systemwheretreetrimmings,slash andotherwaste,usuallydiscarded, arechippedandturnedintoenergy woodpellets.Theforestresidueis alsodried,grounddownintofine particlesandpressure-heatedto breakdownthewoodstructure. Enzymesareaddedtofurther breakdownthewoodcellsinto sugarssuchasglucoseandxylose.

Thewood-basedsugarsundergo twofurthertreatments —withone turningthesugarintoalcoholfor (liquid)biofuel,andtheothercreates lacticandthenpolylacticacidwhich formsthebasisforproductssuch disinfectants,cosmeticsandpolymer feedstocksthatreplacepetrochemicalsandplastics.

“Fromthepinetreesandforestry byproducts,wecandevelop afull suiteofindustrialandconsumer products, andfeedstock.Wehave swappedfossilfuelswithplantation biomass,andreducedthegreenhousegasliability,”saysMulligan.

“Thegoalistoincreasethevalue oftheforestryestate,utilisethewhole treetogeneratebetterreturnsand createnewcareerpaths,allwithan approachrootedinMaoriculture.”

WayneMulligan

Carbonoffsetforestrypurchases raisealarmforpastoralfarmers

Investorsareincreasinglybuyinglandtoplantforestsforcarbonoffsetsin amovethatputs NewZealand’spastoralfarming sectorandsignificantexportearnings atrisk.It’s atrendthatcouldhave devastatingconsequencesforrural jobsandthecommunitieswhodependonthem.

Beef+LambNewZealandCEOSam McIvorsaysin2021,63,000haofland waspurchasedforlargescalecarbon offsetforestryandtakenoutofpastoralproduction.Overthepastfive yearssome200,000haoflandpreviouslyusedforsheepandbeeffarminghasbeenconvertedtoforestry. Becauseasmanyas40percentof thebuyersarefromoverseas,there aremorelandsalesinthepipeline awaitingapprovalfromtheOverseas InvestmentOffice(OIO).

McIvorfearsthegovernment’srecentlyannouncedgoalofmovingto 100percentrenewableelectricityby 2030 could accelerate the rate at whichpastorallandisconvertedto forestry.

“Atthemoment,thewaythatthe EmissionsTradingSchemeisworking,itdoesnotmotivategrossreductionsincarbon.Instead,itmotivates offsetting.Carbonemitterscanoffset 100percentoftheiremissionsand thepriceisokay,becausesomuch treeplantingishappening.”

NewZealandisunusualinthat, unlikemostothercountries,itallows 100percentoffsetting.

McIvorsaystheimpactofland salesisshowingupinlivestocknumbers.

StatisticsNewZealand’s2022Ag Censusdatashowedthenational sheepflockwas25.3millioninJune 2022.That’s adropof400,000from thepreviousyearoraroundtwoper centofthetotal.Heexpectsflock numberstofallfurtherasmoreland istakenoutofproduction.

Theproblemisnotrestrictedto pastoralfarming.Ma¯nukahoneyproducinglandisalsobeingconverted tocarbonoffsetforestry.

Beef+LambNewZealandcommissionedOrme &Associates,a consultingfirm,toproduce areport sotheorganisationcouldbetterunderstandtheimplicationsoflandsales. McIvorsays:“Wenowhave200,000 haoffarmlandsoldtobeconverted fromsheeporbeefproduction.We estimatethatthiswillbeequalto losing$337million ayearinexport receiptsandover a15-yearperiod thatwouldbe$5.05billioninlost exportrevenue.”

Thishas ahugeflow-oneffecton ruraljobs.Beef+LambNewZealand saysover30years100haoflandused forredmeatproductionequatesto theequivalentofaround52fulltime roles.Thisdropsto17ifforestedland isharvestedandjust 7jobswhenthe landisusedforcarbonoffsets.If 20,000haistakenoutofredmeat productionandconvertedtocarbon offsetforestry,itmeanscloseto9000 fewerjobs.

Toputthisincontext,thereare areaslikeWairoawherethelocal communityandeconomyrevolves around ameatprocessingplant.As forestrycontinuestodisplacepastoralfarming,theamountofstock movingthroughtheplantwilldrop below acriticalnumber.Atthatpoint theplantclosesandsodoallthe associatedsupportservices.

Thisunderlinesthecomplex economicproblemwithconverting productivepastorallandtocarbon offsetforest.

Anotheraspectistourism.Planting hundredsofthousandsofhectaresof RadiatapinewillchangeNewZealand’slandscape.Itsitsattheheart ofwhatourtourismoffersoverseas visitors.Tourismisanotherimportant sourceofexportearningsthatcould sufferfrom asurfeitofcarbonoffset forestry. There’s aspecificcasewhenit comestoMa¯orilandowners.

InmanycaseswhenlandwasreturnedtoMa¯oriitwasinpoorcondition.McIvorsaysMa¯orifarmersare capital-constrained.“Bankscan’ttake securityovertheirlandbecauseitcan neverbesold.Thatmeansdevelop-

ingthelandischallenging.Forthem, offsettingcanbeveryattractive.It meanstheirlandcanstarttoearn revenue.”

SomeMa¯oriareinterestedincarbonforeststhateventuallyconvertto nativeforests.

Theideaistostartbyplantingan exoticforest,thenafter50yearsor sothepinetreesstarttofallover. Theyareselectivelyharvestedwhile nativetreesthatgrowunderneath canemerge.

Forolderfarmerslookingforward toretirement,theprospectofselling afarmthatmaynothavebeenhugely profitableovertheyearsfor apremiumpricetocarbonoffsetinvestors willbeattractive.

Therearesomewhomayconsider apartialsaletoinvesttheproceeds inthemoreproductivepartsofthe farm.

Yettheflipsideofthisequation isthatitpricespastoralfarmingout ofreachforyoungerfarmerslooking toenterthesector.Theycan’tcompete.

Carbonoffsetforestryisnotthe firstcompetitorforlandredmeat producershavefaced.Decadesago, manypastoralfarmswereconverted todairy.McIvorsaysthedifference isthatdecisionstoconverttodairy weredrivenbyclearmarketsignals. Thelandcouldbeusedmoreprofitably,butitcontinuedtoproduce food.“Thisisanimportantdistinction at atimewhenwearetalkingabout domesticfoodsecurityandtheworld facesinternationalfoodproduction challenges.”

LandUseCapabilityis awayNew Zealand’slandisclassified.Thebest landisLUCclassone.

Marginallandbarelycapableof producinganythingisratedeight.In manycasestherearecovenantsand otherrestrictionsthatmeanthatclass eightlandcan’tbeconvertedtoforestry.Classesonetofouraresuitable forarablefarming:classesfromone throughtosevenaresuitableforboth pastoralfarmingandforestry.

Investorsarenowbuyingland classesfiveandsixforcarbonoffset projects.ThatconcernsMcIvorwho explainsitisthe“heartofourbreedingcountry”forlambproduction.

“Therearebreederswhositonhill countryandwhiletheyfinishlambs forthemselves,theyalsoarethe nurseryforallthelambsandthebeef cattlethatotherfarmersthenfinish andsupplytotheworld.

“Whenyoutakethatlandoutof theequation,youface aproblem.Our farmersareworldclass,thereisdemandfortheirproduct,butusingthat landforforestryhas aknock-oneffect rightthroughthesector.”

McIvoracknowledgesthatoffsettingis ausefultoolwhenitcomes tomanagingcarbon.Therearefarms wheretreesareintegratedwithlivestock.

“Productionforestry,incombinationwithcarbonforestry,canoften beintegratedintosheepandbeef farmswithoutlossoffoodproduction.”

Hesaysoffsettingissomethingthat shouldbeused,“butitaddsno economicvalue. Acarbonoffsetfarm isessentially aspray,plantandwalkawaybusiness.”

Incomparisoncommercialforestryisanimportantexportindustry thatcreatesjobsandwealth.

Wecouldbemissinganopportunitywiththecurrentapproach.McIvor saystherearemanypastoralfarmers, especiallythoseonhillcountryfarms, whohaveclasssevenandeightland. “Theycouldplanttreesonmaybe5 or10percentofthefarm.Theycould getcarbonrevenue,while,atthe sametime,maintainingfoodproduction.Thereis asweetspottobe foundhere.”

Beef+LambNewZealandispreparing asubmissionontheproposed ETSchangeswhichproposesthegovernmentworkswiththeagricultural sectortosetandimplementlimitson theamountofcarbonoffsettingand theamountoflandtakenoutof production.

Carbonoffsettingforestryisencroachingonpastoralland,orpricingitoutofthereachofyoungfarmers.

Atthemoment,the waythatthe EmissionsTrading Schemeisworking, itdoes notmotivate grossreductionsin carbon.Instead,it motivatesoffsetting.

SamMcIvor

Agribusiness &Trade BillBennett

Makingacommitment to change

It’s timetostart innovatingourway todecarbonisation, writes BrettO’Riley

Thepast12monthshavebeen aninterestingjourneyfor meinunderstandingtheimpactsofclimatechangeon AotearoaNewZealandandourAsiaPacificregion.

Ihavehadtheopportunitytoconsiderclimatechangefromseveral differentperspectives:

● Consideringthefutureshape andrequirementsoftheadvanced manufacturingsectorandtheneed tobecarbonneutraltobeinternationallycompetitive;

● HelpingmanagetheCyclone Gabriellebusinessrecoveryactivity throughtheActivateTa¯makiMakaurauprogrammeandtheEMA;

● Leaningintomyroleasan ABACMemberrepresentingNew Zealand,particularlyas amemberof theSustainabilityworkstream,buildingontheexcellentworkonclimate changeandbarrierstochangeofmy predecessorMalcolmJohns,Genesis Energychiefexecutive.

Frankly,itishardnottofeel dismayedandsomewhatoverwhelmedbythechallengeswearefacing.

Iknowtheremaybesomepeople whostillquestionclimatechange science,but Ithinkthechangestoour planetandtheimpactsonpeopleare thereforusalltosee.And Iknow therearequestionsforsomeabout prioritisingreductionversusadaptation.

Iwouldsayweneedtodoboth, andattheheartofthesechallenges istheneedtoacceptchangeand innovateourwayto anewfuture.

ApecClimateLeadership

Principles

AtABACwearecontinuingtoadvocatefortheApecClimateLeadership

Principles:

● Reduction —businessesshould playtheirpartinthetransitiontoa lowcarbonregion;

● Adaptation —businessesshould supportbehaviouralandtechnologicaladaptation;

● Justtransition —businesses shouldseeksustainableandequitabletransitionswithopenrulesbasedtrade.

Ourregionstillhas alottodoon climatechange.Wehavevulnerable neighbourswhoneedourhelp,too.

Ajusttransitiondemandsit.

Greenhousegasreductionsreally matter.Thatmeansweneedtouse alltheleversavailabletous,including finallyeliminatinginefficientfossil fuelsubsidies —a commitmentour

The“decarbonisation partnership”between ChinaandNewZealand, announcedbyPrime MinisterChrisHipkins duringtherecent missiontoChina,was probablythemost significantmilestonefor thedelegationintermsof thepotentialimpactfor ourcountry.

Apecleadersmade14yearsago.

Simplyreducingouremissionswill notprepareusfortheclimateimpacts wewillfaceevenat1.5C.Adaptation isalsovital.Lookatthetemperatures peakinginthelastcoupleofweeks atover52Cinourregion —andfrom thefarcorneroftheUnitedStateson oneside,allthewayacrosstoChina ontheother.Weneedtoadapttonew risks, anewwayoflifeandnewways ofdoingbusiness.

Ontheotherhand,ignoringreductionsandonlyfocusingon“adaptation”risksovershooting1.5C.Weare alreadyat1.1C.Withcurrentpolicies, wearelikelytohit1.5Cbetween2030 and2035accordingtotheWorld EconomicForum.Wemustkeepthe pressureonreductionsifwedonot

wanttogocatastrophicallybeyond thatlevel.

Lastly,unlesswebuild“justtransitions”intoouroperatingframework, werisknotonlyfallingshortofour climatetargets,butalsoourlongstandinggoalsofinclusion,resilience, and apeacefulregion.

Climateimpactswillhitthemost vulnerableinourcommunitiesthe hardest.

Farfrommakingprogress,weare regressingas aregion.Comparedto 2015,AsiaandthePacificnowhave moredeathsandhighernumbersof peopleaffectedbyclimatedisasters, aswellashighergreenhousegas emissions.

TheApecregionisresponsiblefor 60percentofglobalemissions.What wedointhisspacereallymatters.

Innovationisthekey —consider Chinaandotherpartnercountries. Whatdoweneedtodoisinnovate. Butoneofourchallengesas asmall economyisthatwearetypicallya technologytakerandthereforea pricetakerfromlargereconomies.

EnterChina.

As amajorgreenhousegasemittingeconomy,theymightseeman unlikelysourceofhelpandinnovationforNewZealand.Butmy observationfromthreevisitstoChina thisyearisthattheyaredeeplycommittedtodecarbonisationintheir ownuniqueway.

Youseeexampleswiththeirelectrifiedpublictransport,railandroad, overlongandshortdistances,and withthegreennumberplatesofthe electriccars,trucksandbuseswhich proliferateincitieslikeShanghai.

Andtherearethenewbrandsof

low-costelectricvehiclesbeinglaunchedeverymonth —lookoutfor brandslikeLittleTigeratnewcar pricesthatwecanbarelyimagine today(US$9900).

Decarbonisationisalsohappening inlesspublicbutsignificantwaysin Chineseindustry.

Thisincludesinnovationstoreduceemissionsfromfactoriesand recyclethosetoproducefoodquality Co2andnitrogen.Andcontainerised batteryfarms,locatedinindustrial parks,storingsolarenergycaptured onfactoryroofs,nottomentionsimilarbatteryfarmscollectingenergy fromdedicatedsolarpowerarrays stretchingacrossvasttractsofland.

OthersolutionsthatChinaisexploring,likemicronuclearpower stationsusingthoriumratherthan uraniumastheirfeedstock,areprobablyoflessinterestfor aNewZealand context.Butithighlightstheirfocus ontransitioningtocleanenergyand loweringemissions,acceptingthat paradoxicallysomenewcoalstations arestillbeingconstructed.

The“decarbonisationpartnership” betweenChinaandNewZealand, announcedbyPrimeMinisterChris Hipkinsduringtherecentmissionto Chinawasprobablythemostsignificantmilestoneforthedelegation intermsofthepotentialimpactfor ourcountry.

Wehaveestablisheddecarbonisationas akeypriorityandcompetitiveimperativeforsectorsinNew Zealandthroughinitiativeslikethe AdvancedManufacturingIndustry TransformationPlanwhich Ico-chair.

WhatChinaandothereconomies likeGermany,Denmark,andtheUK arestrivingtoachieveindecarbon-

isationareopportunitiesforusto leveragethroughourfreetrade agreements. RegardlessofwhoisingovernmentaftertheOctober14thelection day,wemustpursuetheseopportunities.

At abusiness-to-businesslevelthis hasalreadystarted,championedby theEMAandotherorganisationsin theBusinessNZNetwork,including theSustainableBusinessNetwork andBusinessEnergyCouncil.

Governmentschemesoffered throughEECAcanprovideadditional financialassistanceinthese transitionstoenablebothpaceand scale,thoughtherearestillopportunitiestoleveragesomeofthesolutions harderandacrossadjacentbusinesses.

NewZealandcaninvestand innovatetoo Notallinnovationneedstocome fromoffshorepartners.Thereisa slewofNewZealandcompanies, smallandlarge,thatareleaninginto theinnovationchallengepresented bydecarbonisation.Someasmajor energyusers,somefromtheperspectiveofscience-basedinventionand entrepreneurs.

SavvyinvestorslikeSimplicity, IcehouseVentures,Punakaiki,and OutsetVenturesarebackingmanyof thesecompaniesandtheirinventors. Someofyoumayhaveseenthe mediacoverageofDrRatuMataira andhiscompanyOpenStarTechnologies’questtosolvethenuclear fusionenergygenerationchallenge. OpenStararecertainlyatthepointy endofinnovationchallenges.

Fortunately,ourresearchanddevelopmenteco-systemhassome amazingcapability,andinternational collaborationsacrossmultiple domains,thatcanpositivelyimpact ourdecarbonisationaspirations.

CompanieslikeAvertana,Mint Innovation,B.spekl,EnergyBank, Zincovery,andVertusEnergyareall examplesofapplyingscience-based innovationtocreatesustainable solutions,followinginthefootsteps ofpioneerslikeLanzatech.

Largerestablishedcompanieslike NZSteelwiththeirelectricarcfurnace,andFonterrawithreplacing theircoalboilers,arealsoadopting newtechnologysolutionstodecarbonise,takingadvantageofthe fundingavailablethroughEECAand theaspirationsoftheirexecutiveand shareholderstobecarbonneutral. Leveragingourtradingpartnershipsanddevelopingtheselocal solutionscangohandinhandinthe innovationjourneytodecarbonisationand asustainableeconomic future.

Continuingtosharetheopportunitiesandthebusinesssuccessstories willhopefullyinspireanevengreater commitmenttochange.

BrettO’Rileyischiefexecutiveof theEMAandCo-ChairAdvanced ManufacturingIndustry TransformationPlan. HealsorepresentsNewZealand as amemberoftheApecBusiness AdvisoryCouncil(ABAC).

China’slow-costLittleTigerisoneofmanyelectriccarsbeinglaunched.

Anappetite forresilience

Climateextremes makeNZ’ssupply chainshighly vulnerable —it’stime torethinkhowwe growandshipfood writes

AlanRenwick

Supermarketcustomersin

NewZealandarenoticing gapsinthegroceryaislesthat havenothingtodowiththe globalpandemicorUkrainewar.

It’scleardomesticfoodsupply chainshavebeenincreasinglychallengedbynaturaldisastersandthe ongoingimpactofclimatechange.

Countdownrecentlywarnedcustomersthatcertainfoodswouldbe inshortsupplyduetofloodingonthe EastCoast.Timeandagain,wehave seensuchshortagesandsignificant increasesinthepriceofcertainfoods, particularlyfreshproduce.

Thequestioniswhetherwehave justbeenunlucky,orarethesedisruptions aresultofdeeperissuesin theNewZealandfoodsystem?Are wemorevulnerablethanother countries,andifso,whatdoesthis meanforourfoodsecurity?

Overthedecades,NewZealand hascentraliseditsfoodsystemand increasedtheriskthat asingleregionaleventcouldreverberate nationally.Butit’snottoolateto diversifyandincreaseresilience acrossourfoodsupplysystem.

Efficiencyoverresiliency

Modernfoodsupplychainshave largelybeenoptimisedforeconomic efficiencyratherthanresilienceto supply-sideshocks.

Theagriculturalsectorhasseena processofincreasingscaleandspecialisedproduction —primarilytoincreaseprofitability.In part,thishas beendrivenbylandsuitability.

Theoutcomeis arelativelysmall numberoflarge-scaleprocessingfactoriesandtheconcentrationofenterprisesinspecificregions.

Forexample,around32percent ofNewZealand’shorticulturalproductscomefromBayofPlentyand Hawke’sBay.Attheretailendofthe chain,large,centraliseddistribution centresand“justintime”delivery systemskeepcostslowforthetwo dominantsupermarketchains,which accountforbetween80percentand 90percentofthefoodweconsume. Foodisbroughttojust ahandfulof distributioncentresbeforebeing dispersedacrosstheirnetworksof stores.

Butdisruptionsinoneregioncan affecttheentirecountry.IntheaftermathoftheChristchurchearthquake, thedistributioncentresservingthe entireSouthIslandweredamaged. Supermarketswereforcedtoship suppliesfromtheirNorthIslandhubs.

ArecentstudyfromtheTimaru DistrictCouncilfoundwhileSouth Canterburydescribesitselfasthe foodbowlofNewZealand,95percent ofthecommercially-boughtfoodin thedistrictcomesfromoutsidethe region.

Over-dependenceonroads

Thecurrentsupplychainmodelis totallyreliantontheuninterrupted movementofproductsacrossthe countrythroughourtransportnetwork —intheory,comprisedofroad, rail,seaandairlinks.Inpractice,just under93percentoffreightgoesby onemode —road.Thiscompareswith 72percentinGermany.

Topographycoupledwithlow populationdensitiesmeanmany regionsareservedbyonlyoneor,at most,twomainroadssuitablefor freighttrucks.Wearenearlytotally reliantonroadsbutourroadnetworksareparticularlyvulnerableto climaticeventsandothernatural disasters.

Ourfooddistributionsystem seemstobebettersetuptoget exportsoutorimportsinthrough portsandairportsthantomovefood aroundNewZealand.Thevastmajorityofouragriculturalproductsare exportedratherthanconsumedin NewZealand.

Resilienceinuncertaintimes

Alltheevidencesuggestsclimate changeisgoingtoincreasethe challengesinourfoodsystem,with morefrequentandintenseweather events.Projectedsea-levelrisewill alsoputmorestrainonouralready vulnerablefoodsystematthefarm andprocessinglevels,aswellasour abilitytomoveitaroundthecountry.

AlanRenwick

AlanRenwickisProfessorof AgriculturalEconomicsatLincoln University.Hisworkfocuseson agriculturalandtradepolicy analysis,innovationinagrifood systemsandanalysisofagrifood valuechains,allareasof fundamentalimportancetothe functioningoftheagrifoodsector. Muchofhiscareerhasinvolved applyingeconomicanalysisto assesstheefficiency,effectiveness andequityoftheEUCommon AgriculturalPolicy(CAP),butmore recentlyhehasbeenfocusingon theeconomicsofexistingand novellandusesinNewZealandand technologyadoptionmore generally.

Regionalcouncilsareclearlyconcerned,andthereisincreasingdiscussionoftheconceptsoffoodresilienceandlocalfoodnetworks.

Butwhatdoes afoodsystemdesignedaroundresilienceratherthan optimisationlooklike?Doesitsimply meanlesschoiceandhigherprices? Orcanittackleotherchallenges,such asdietandhealth,environmental concernsandbroaderfoodsecurity?

Twopossible,compatiblepaths areevident.Thefirstrelatestolocal foodnetworksandinvolvesdiversificationoftheproductsproducedin eachregion,atboththefarmand processingandmanufacturinglevels.

Theideaofdistributedmanufacturing —basicallymini-factories dispersedthroughthecountry —has beendiscussedintheforestrysector inNewZealandbutcouldequallybe consideredforfood.

Someemergingtechnologiesthat reducedependenceonthelocalclimateforproduction,suchasvertical farming,couldbeimportantinlocal foodnetworks.Aquaponics(farming bothfishandplantstogether),oralgae productioninponds,couldalsodiversifylocalfoodresources.

Theideaof“circularity”couldhelp reducedependenceonexternalinputs.Foodwasteproducts,forex-

ample,couldbeturnedintoenergy aswellasfertiliser.

Fromsupplychainstosystems Alternatively,wecouldkeepthepotentialbenefitsofnationalscaleproduction,butinvesttoreducethe vulnerabilitiesinourtransportnetworks.Asrecentresearchhighlights, therecouldbemultiplebenefitsto reducingrelianceonroads.Wedon’t needtoreinventthewheel.Only6 percentoffreightistransportedby rail —thiscouldbeincreasedto diversifytransportoptions.

Theremayalsobeopportunities tomakemoreoutofcoastalshipping routes.Atthemoment,thislargely comprisesmovementofbulkproductssuchasfertiliserandcement.

Howeverwetackletheincreasing vulnerabilitiesinourfoodsupply chain,weneedtothinkofitas afood systemandnotsimply asupply chain.Thecomplexinteractionsin ourfoodsystemmeanchangestoone partarelikelytohavewidereconomic,environmental,socialandcultural impacts.

Tacklingourpotentialvulnerabilitytoclimatechangeneedstobe undertakeninthecontextof awider strategyfortheentirefoodsystem.

—Copyright:TheConversation

Emergingtechnologiessuchasverticalfarming,couldbeimportantinlocalfoodnetworks.

Photo/123rf

Finding asolutiontotheclimatecrisiswithinagricultureis not apuzzlewithoutanswers. It’sclearthatrelyingsolelyon treeplantingtooffsetemissionswon’t suffice.Instead, ashifttowards organicsandregenerativeagriculture holdsthekeytoreducingthesector’s impactontheenvironment —includingdiversifyingwhatweproduce fromthewhenua.

Foryears,successivegovernmentshaveprioritisedquantityover quality,treatingfarmsasmerefactories.Thisapproachhasleftour watercontaminated, ourlanddegraded,andourplanetwarming.

Farmershavebeenill-equippedto navigateclimateandmarketshifts, whileourcommunitieslacksecure andequitablefoodandfibresystems thatarevitalfortheirwell-being.

Agriculturalstabilityisintrinsically linkedto astableclimate.Afterthe carnageofcycloneGabrielle,the messageisclear:recurringdroughts andfloodsaredetrimentaltofarming, regardlessoflocation.

AreportbytheParliamentary CommissionerfortheEnvironment showedthattooffsetthemethane emissionsof asingledairycow,a whopping6000squaremetresof

pinetreeswouldberequired.

Similarly,theemissionsfroma cowraisedforbeefwoulddemand anadditional4000sq mofpineforest. Imagineanentirerugbyfieldcovered inpinetrees,allneededforjusttwo animals.

Kickingtheclimateballtotouch isjustnotanoption.

It’simperativethatthegovernmentturnsitsattentiontoalternative strategies.Supportingorganicsand moreregenerativemethodsforfarmingalongwithphasingoutsynthetic nitrogenfertilisersandimportedsup-

plementaryfeeds,suchaspalmkernelexpeller(PKE),arecriticalsteps.

PKEandnitrogenfertilisershave becomestaplesinintensivehighemissionsfarming,particularly withinthedairysector,nottomentiontheassociateddestructionof rainforestsliketheBorneojungle. Thisapproachworsensclimatepollutionat atimewhenweshouldbe reducingit.

It’s afarcryfromthesustainable, grass-fedproductsthatNewZealand farmersareknownfor.

Beyondsecuringfuturefoodpro-

duction,seizingtheenormousopportunitiespresentedbyNewZealand’s agriculturalsectorisparamount.Globalmarketsareincreasinglyfavouringlow-emissionsproducts, necessitating afundamentalshiftin ourfoodandfibreproductionpractices.

Organicandregenerativefarming practicesoffermyriadbenefits,includingimprovedwaterandsoilquality,sustainablefoodproductionthat respectsecosystemlimits,andprotectionagainstclimate vulnerabilities.

Theroadtosuccessliesinharnessingthesebenefitsandensuringthe gainsareequitablydistributed.Successhingesontransitioningtolowemissionsagriculturewhileconcurrentlysupportingthegrowthoffarmingcommunities.

Aschangedrivenbyclimateshifts andothertrendsisinevitable, ajust

transitionisessentialto guidethese communitiesthroughthetransformation.Thisinvolvesproactiveplanningincollaborationwithfarming businesses,unions,indigenous groups,andimpactedcommunities. Itmeansprovidingaccessibleeducationandtraining,offeringsupportfor transitioningworkers,andensuring equitabledistributionofhealthbenefits.Italsorequires acomprehensive understandingofhowclimatepoliciesimpactdifferentpopulation groups.

Somedairyfarmershavediscoveredthatreducinglivestocknumbers canactuallybemorefinancially rewarding,thankstobetterpricing andreducedcosts.Moreover,regenerativefarmingenhancesorganic contentinsoil,bolsteringresilience againstfrequentdroughtsin awarmingworld.

Tosupportfarmersinthistransition,alongside aphasedreductionof nitrogenfertilisers, aregenerative farmingfundwouldmake asignificantimpactinourfightagainstthe climatecrisis.Additionally,itwould createhighlyskilled,stablejobs withinruralcommunities,fostering flourishingsmalltowns.

● TeanauTuionoistheGreenParty’s agriculturespokesperson

Timetorelaxtheregulatoryburdenonfarmers

MarkCameron

Duringmythirdformyear, (YearNineintoday’sterms) myfavouritesubjectwas science.

Understandingthenaturalworld, cause-and-effect,allofthisintrigued me.As adairyfarmeritisfairtosay thesameprinciplesapply —market signals,weather,governmentlegislation.Allhaveripplingaffectsonwhat happenson-farm.

Irecentlyreturnedfrom atourof NewZealand’sheartland,alongside ActcolleaguesNicoleMcKeeand AndrewHoggard.Weheldpublic meetingsinremotepartsofNew Zealand,asfarsouthasOtautauand asfarNorthasTeKauwhata.We wantedtogotoplacesthatprobably don’tseepoliticiansthatoften,sowe couldhearwhatisaffectingthemand howthenextGovernmentcanplay itspartinhelping.

Therewas acommonthemeeverywherewewent.Peoplefeltdisconnectedfrompolicymakersmiles away,wonderedwhetherthebureaucratsinWellingtonreallyunderstood howmuchimpacttheyarehavingon

theviabilityoftheirbusiness.

Itallcomesdowntoredtapeand regulation.Everynewpieceofregulationtocomplywithequalsmore timeandmorecost,oftenforminimal changetotheresult.Thereneedsto be amicroscopeputonregulation comingoutofGovernment:whether itisreallynecessary,orifforcing farmerstocomplyisgoingtohave adetrimentaleffectonthecountry.

Farmingwillalways havechallenges —free marketswaxandwane withsupplyand

potentialmethanereductioninnovationssuchasBovaerhavebeen sittingonanEPAwaitinglistforyears. Sowhy,insteadoffixingtheseissues, hastheGovernmentspentyearslobbyingtoput ataxonthesector?

Actisproposingtoaddressthis with anewMinisterandMinistryof Regulation.Thesewouldensurenew andexistingregulationsmeettough newstandards,andputredtapeon thechoppingblock.

TheZeroCarbonActis aprime exampleof apieceofpolicythathad thepotentialtocausehugeissuesfor theagriculturesector,yetwaspassed withthesupportofeverypartyex-

ceptAct.Emissionsreductiontargets werearbitrary,offsettingtechnology waslimitedandwith afunctionalETS (whenwehadone)nomatterhow manyboondogglesandbanstheGovernmentimplemented,therewould benoimpactonglobalemissions.It wasbasicallyanexcuseformore centralplanning —andfarmerswere alwaysgoingtobe atargetforthis.

HeWakaEkaNoawasbornfrom thisandthevagariesthatcamewith itledtomuchoftheconcernin farmers’minds.Itiswidelyaccepted thatthemethodusedtorecordmethaneinflatesitsimpactgreatly,and

Act’spolicyisoneofpragmatic realism.Wewouldtieanyemissions pricetothatofourfivemaintrading partnerstoensurethereis alevel playingfieldforgrowersandproducerscompetingoverseas.NewZealandwillnotprosperifweareforced tomakesignificantlydeeperemissionscutsthanourtradingpartners. Wewillsimplyimpoverishourselves andpusheconomicactivitytoother countries.

Asthesizeofthenationaldebt explodesandpressurebuildson infrastructure,health,housingand education, astifledprimarysectoris thatthelastthingweneed.Thenext Governmentmustrelaxtheregulatoryburdenandallowfarmerstodo whattheydobest.

● MarkCameronisAct’s spokespersonforforestry,regional economicdevelopment,fisheriesand primaryindustriesbiosecurity.

These reports arepremier,business-to-business publicationsprovidingcriticalsector insightsalongside robustinformed contentand commentaryaboutissues thatmatter to NZbusinesses. The reports canvastheviews of CabinetMinisters,business leaders,and business organisationchiefs.

Thissitsalongside expert commentaryfromrespectedthought-leadersthroughinterviews andin-deptharticleswritten by theHeraldBusiness Reports team.

India andNZ: Thenextinnings

Plentyofinkhasrecently beendevotedtotheIndia/ NewZealandtraderelationship.Autumnsaw averitable waveofcomment,andthathasbeen accompaniedby alotofpositive activity. AmajorreportbytheIndia NewZealandBusinessCouncil (INZBC)inApriladvocatedgreater commitmentandfocus,andthishas been acatalysttoexplorenewways ofapproachingtheworld’smostdynamicandpopulousmarket.

A40-persontradedelegationleavingNewZealandforDelhiinlate Augustisonepositiveoutcome.This isbeingplannedandledbyfive businessorganisations,withstrong supportfromtheNewZealandHigh CommissioninDelhiandNZTrade &EnterpriseinMumbai.Government plays avitalroleinopeningdoorsin Indiaand atrue“NewZealandInc” approachwillbeessentialtoboosting bilateraltradeandinvestment.

Althoughthevalueoftwo-way trade,at alittleover$2billion,is currentlymodest,severalrecent visitsI’vemadetoIndiaconvinceme thisis arelationshipofgreatstrategic importanceforNewZealand.The magnificentBengaltigerisIndia’s nationalanimalanditsgrace,agility, strengthandenormouspowerprovideanappropriatemetaphorin 2023.Nolargemarketcanmatch Indiaforspeedanddynamismand arateofeconomicgrowththatwill exceed 6percentthisyear,despite asluggishglobaleconomy.Itsyoung, talentedandIT-savvydiasporais potentially agiftto acountrylikeNew Zealandwith adireneedforskills. Indiahasbecomeaneconomicpartnerwecannotaffordtooverlook.

Indiacontains28statesandeight unionterritoriesandindividually mostofthemaremorepopulousthan NewZealand.Thecapital,Delhi,is over2000yearsold,reflectingIndia’s ancient,complexandrichhistory. ThereissomuchforNewZealand exportersandinvestorstolearnbeforetheycanfullyunderstandhow tobesttargettheirefforts.

Whatisexcitingaboutrecentbusinessinitiativesisthesettingofsights on astrategicapproachtobuilding trustanddeeperunderstandingof theopportunities,ratherthan apurelytransactional“one-off”approach tomaking asale.Salesarealways possiblein amarketlikeIndia;establishing asustainablelongtermbusinessisanotherthingentirely.

Theultimateobjectiveofthefive organisationsleadingthedelegation istoreturnthetradeandinvestment relationshiptogrowth.Australia’srecent“earlyharvest”FreeTrade Agreement(FTA)haspiquedenvyon thissideoftheTasman,evenifit excludedkeyproductsofinterestto us.WehavebeendowntheFTApath withIndiaandwhilewewillalways remaininterestedina comprehensiveagreement,therestillismuchwe canachieveintheabsenceofanFTA.

Thereisalsomuchthatisinstruc-

As atrademissionpreparestodepartforDelhi, StephenJacobi considersthe prospectsforgrowingtwo-waytradeandinvestmentbetweenIndiaandNew Zealand

tiveabouttheAustralianapproach. Ithassuccessfullyidentifiedwhat Australiacanbringtothesectors Indiahasidentifiedasitstoppriorities.Therehavebeenconstantministerialvisitsover anumberofyears propelledbyanawarenessthatgovernment,culturalandacademiclinks canallsupportthetradeandinvestmentrelationship.Thisprovidesus withhelpfulcues.Therearealso transtasmanlinksthatourbusiness organisationsarestartingtoleverage.

India’sglobaldiasporaisthelargest intheworld.AlthoughAustraliahas asignificantethnicIndianpopulation, NewZealand’sisproportionally larger. Afull 5percentofNewZealandersclaimIndianheritageandare doingmuchtoenrichoureconomic, culturalandsportingfabric.

Theyalsorepresenta strategic asset,areplayinganimportantpart aswelooktostrengthenbilateral businessexchangesandwillbewell representedonthemission.

India’sMinisterof ExternalAffairsDr. Subrahmanyam Jaishankar(above, on avisittoNZlast year)lauded bilateralcricketing tieswithNew Zealand,saying Indiawillalwaysbe indebtedtoexcoachJohnWright andStephen Fleming(pictured) fortheircontributionstothe game’sdevelopmentinhiscountry.

Photos/DeanPurcell,File

Despitethecurrentlowlevelof trade,NewZealandhasmuchtooffer. Wehaveworld-leadingresources,expertiseandtechnologytosharein severalsectors.Wehavetechnology andmanufacturingcompaniespreparedtotake along-termstrategic approachtotheIndianmarket,which havebuiltsuccessfulbusinesses there.Companiesthatcouldexpand co-operationwithIndiaincludethose intheagriculture,agritech,education, fintech,forestry,horticultureandrenewableenergysectors.

Becominganefficientfoodproducer,achievingmoreintensiveland use,educating apopulationwhere halfofthepeopleareundertheage of25,andreachingworldleadership ingreenenergyareallstrategic prioritiesfortheIndiangovernment. NewZealandcompaniesthatclearly explainwhattheycanofferandare willingtoadapttheirgoodsandservicestomatchtheneedsofIndian customersmaydiscoverexcitingopportunities.

Beingpreparedtolearnallwecan, buildinglong-termpartnershipsand stayingthecoursewillallbeimportant. NewZealandbusinessesare travellingtoIndiatoexplorepartnershipsforthelongterm.

We’vebeenwatchingeachother andplayingcricketfordecades:now it’stimeforexportersandinvestors tohelpleadthenextgrowthphase.

● StephenJacobiistheExecutive DirectoroftheNewZealand InternationalBusinessForum(NZIBF). Otherorganisationssupportingthe IndianBusinessMissioninclude:the NZMinistryofForeignAffairsand Trade;theIndiaNewZealandBusiness Council,ExportNZandtheAuckland BusinessChamber.

ReporthighlightsNZ’s missedopportunities

NewZealandhasbeenasleepatthe economicwheelinrecognisingthe “vital”importanceof astrong relationshipwithIndia,soontobethe world’sthird-largesteconomy, suggests arecentreport.

Thereport India &NewZealand: arelationshipreadyforitsnextphase bytheIndia-NewZealandBusiness CouncilsuggestsAustraliahasleftus initsdustindevelopingandcashing inontradeopportunitieswithwhat isconsideredtobetheworld’sfastestgrowingeconomy.

Urginggovernment,business, academic,culturalandsporting leadersto“getserious”aboutIndia, thereportidentifiedmanyshortfalls inourstrategicapproachtoIndia,

rangingfrom40yearsofdiplomatic engagementneglect,lowculturaland commercialvisibilityontheIndian sub-continent,toconsideringa countrywith28statesandeightunion territoriesasonebigmarket.

Thereportsays15yearsoftrying tonegotiate aconventionaltrade agreementwithIndiahas“delivered nothing”,notingIndia“isdifferent, accordinglyitrequires adifferent approach”.

CouncilchairmanEarlRattraytold the Herald “youcannotcopyand paste”tradeagreementstypicalof thosewithEurope,theUKandNorth AsiaforIndia,theworld’sfifthbiggest economy.

“Indiaisaneconomicuniverseof

itsown.IndiaisnotChina,”saidthe formerFonterradirectorwhohas dairyfarminginterestsinIndia.

Whileencouragedby“anuptick” inministerialvisitstoIndia,Rattray saiditwasnearly adecadesincea NewZealandprimeministerhad visited,andtherehadbeenonlyfour formalprimeministerialvisitsin40 years.

NewZealand’sdiplomaticengagementandoutpostsinIndia —“vital” toadvance arelationship —was under-resourcedandunder-funded, comparedtoAustralia,whichhada specifically-tailoredfreetradeagreementwithIndia,achieved“ontopof alreadyveryhealthylateraltrade. Thereportsaidrestartingtalksfor

acomprehensiveNZ-IndiaFTAwas “unlikelytobesuccessfulatthistime”.

ThereporturgedtheGovernment todevelop along-termstrategyand implementandsupport apublic/ privatepartnershipleadershipmodel.

ItsaidNZ-Indiatradefigureshad declinedsince2015.Totalservices andmerchandiseexportstoIndiain 2020wereworth$1.7billion.MerchandiseexportstoIndiaearned$430m in2022,dominatedbywood products,metalsandwool,with contributionsfromhigh-valuedairy ingredientssuchaswheyproteinsand lactose,kiwifruit,applesandpears, sheepmeatandmeatby-products.

Dairyexportshavebeenheldup asroadblocksto asuccessfulNZ-India

FTA —Indiais abigdairyproducer —butthecouncilsaidthefailurewas moretodowithNewZealandtrying tofititshigh-qualityFTAmodeltoa uniqueIndianenvironment.The reportcitedbigopportunitiesinnoncommoditytradeincludingaviation, tourismandtravel,healthcareand technology.

India’smaintradingpartnerswere theUSandChina,withAustraliaits 10thlargestwithmorethanUS$25b inbilateraltrade.Multipleforecasts saidIndia,thoughttohavepassed China’spopulation,wouldbethe world’sthird-largesteconomywithin fiveyears,providinghighGDPgrowth thatwouldoutstripChina’s.

—AndreaFox

NZstill‘in agoodspace’withUS

ThefacadethatfrontsCapitol HillinWashingtonDCis cosmeticallyrestoredafter the(dependingonone’smediacommentatorofchoice) —“insurrection”;“articulationoffreespeech”; “wannabecoup;”“legitimateprotest” ofJanuary6,2021.

Therearemanybollardsandbarrierstonavigatetogetintothebuilding.ButNewZealandersarepretty goodatworkingtheirwayaround impedimentstogainaccesstoplaces ofimportoureconomicwelfare.

Thatwascertainlythecasefora smalldelegationoftradeandbusinessadvocatesrecently. Iwasthere.

Ontheinsideofthebuilding,there arefracturesthatwilltakemuch longertofix.Overtpartisanshiprages like amediafuelledpandemic throughouttheinstitution.

Whilenormalbusinessandeffectivecollaborationrunsitscourse,as hasalwaysbeenthecase,thereisa senseithasbeendrivenunderground andmusthideinplainsight.

Why?Nogoodwillcomeofan electedrepresentativebeingseento stretch ahandacrosstheaisle.

Apparently,thatis asignofweaknesswhereonceitwasseenasan articulationofstrengthandmaturity.

WhentalkingabouttradeandCongressionaldynamics,onepolitician describedobservingsomeofhis moreTwitteringcolleaguesinthe seatsoppositeaslike“watchinga fistfulofferretsfightingin aphone box.”Hewastryingtoprovidesome lightrelief,buthewasnotjoking. Thereweredistinctelementsofresignationandfrustrationinhisvoice.

Unfortunately,theemergenceof tradeasoneofthemostdivisive issuesinmainstreamUSpoliticshas presentedongoingchallengestoNew Zealand’sexcellentteamsofadvocatesandnegotiators.Thosewho seektosupportrules-basedsystems andtosecureaccessforourgoods andservicesthroughtradeagreements.

ThereisnodoubtthatUSpolitics hasbecomemoretribal,inwards lookingandsoundbitedriven.Itisa challengeforthosewhoconsistently gointobatforus.

Thecommonperspectiveisthat, ontrade,therearethreerulesinplay inWashingtonDCatpresent.

Trade is now oneofthe most divisiveissuesinmainstreamUS politicswrites PennyTucker

lettersadded)whenitcouldhave beendone.Hehad awindowtoact butdemurredandthewindowbangedshutwith avengeancewhen TrumparrivedintheWhiteHouse.

Comprehensivebilateralfreetrade agreementsinvolvetrade-offsthat areunlikelytoemergeunscathed fromanycurrentCongressionaldebate.OilState?FarmingState?Poor State?Worriedaboutimmigration State?SwingStatesorStateofdisrepair.Itwouldbeanunusualfreetrade agreementthatcouldnavigatethat mazeofdomesticpush-pointsatany timeintheforeseeablefuture.

Thereis apervasiveapprehension thatfocusingonexternallinkages whichhavesupporteddevelopment, geopoliticalchange,thesolidifyingof allegiancesandincredibleconsumer choice,areinsomewaysantithetical toelectoralsuccess.So,littleissaid atall.

ThenegotiationsonanIndo-PacificEconomic Framework(IPEF)areimportant.Itwrapsin countriesaroundtheIndo-Pacificanddealswith importantissuesfundamentaltotradesuchas supplychainsecurity,sustainabilityconsiderations, and,potentially,issuestodowithemerging technologiesthatneedtobeaddressed.Securityof investments,anti-orruptionconsiderationsand capacitybuildingareallpartoftheconversation. Importantly,itis atheatreofrelationship maintenancethatmustbesupported.

Rulenumberone:itmustbemade ormanufacturedintheUS.Rule numbertwo:itshould,maybe,have asustainabilitycomponentintegrated(unlessthatcontravenesrule one).Rulenumberthree:thereshould beconsiderationofinternationalperspectives(unlessthatcontravenes rulesoneandtwo).

Itisfairtosaytraditionalpolicy pardigmshavebeenseverelyinterrupted.TheWorldTradeOrganisationislargelyviewedas amultilateral

misadventurewhichfailedtoliveup topromisesthatpeoplecanbarely rememberandcertainlydon’twant totalkabout.Fewpeoplelikemultilateralismanyway.Ithasdangerous elementsofactualcompromiseand co-operationthatarefarmoresuited toyesteryear.

Plurilateralismishardlyheldin betterregard.Obamamissedanopportunitytopassthesubstantive agreementthatistheTrans-Pacific Partnership(withorwithoutextra

BUSINESS REPORTS

Thesituationiscomplicatedby twoparticularlyrelevantissues whichloomlargeinthecornerofthe room.Thefirstisclimatechange. Fightsovercauseandconsequence willbeongoingbutwhenpeoplein Texasarebeingadmittedtohospital becauseofburnsontheirfeetfrom hotpavementsandragingwildfires competewithfloodsunseasonable snowformediaheadlines,thepolitics ofinsularitycan’tbesustained.

ThesecondisChina.Notonepersonin abroadrangingseriesof discussionswithmembersofCongress,officials,commentators,and diplomats,failedtomentionChina.A fullyfledged —nolongeremerging— rivalforglobaleconomicdominance, geopoliticalreachandinternational profile.It’sconflictingforpeopleto havetoacceptthat,inlookingmore inwards,someoneelsehasandis movingintothevacatedspaces.We heardthatChinamustbemanaged andthatpeopleintheIndo-Pacific shouldbewaryofengaging“too much.”NotwithstandingthesymbioticrelationshipbetweentheUS andChina,thelevelofuneasewas palpableeverywhere.

Thisispartlywhynegotiationson anIndo-PacificEconomicFramework(IPEF)areimportant.Itisn’ta tradeagreementperse.Butitwraps incountriesaroundtheIndo-Pacific anddealswithimportantissuesfun-

damentaltotradesuchassupply chainsecurity,sustainabilityconsiderationsthatgofarbeyondgreenwashingand,potentially,issuestodo withemergingtechnologiesthatneed tobeaddressed.Securityof investments,anti-corruptionconsiderationsandcapacitybuildingareall partoftheconversation.Importantly, itis atheatreofrelationshipmaintenancethatmustbesupported. Mightitbe afoundationfor amore substancetradeagreementwith actualreductionsintariffsandnontradebarriersinduecourse?Notsure. Butit’sthesolehorseinitscategory intheraceandevenanineptgambler wouldbacktheonlyanimalinthe startinggate.

So,wheredoesallthatleaveNew Zealand?Funnilyenough,we’reina prettygoodspacewithourthird biggesttradingpartner,long-timeally, and —forthemostpart —mate.

In an ideal world, we’d be able to address some of the red-tape, unnecessary costs or time and money wasting issues that incommode the biggest exporters who prop up our economy.

That’s still amajor goal for many.

But we’re an increasingly diverse economy. We’re aerospace. We’re technology. And films and gaming and coding. We’re sustainability innovators. Service providers —we’ve got legions of competitive, credible people We have the best airline in the world, flying more often and more directly to the States all the time.

We’re the makers of niche products and fast-moving-consumer-goods.

We’re tenacious innovators and Americans admire that.

Entrepreneurs are talking to venture capitalists. Venture capitalists are talking to investors. The US is our third biggest market. It’s healthy, its growing and it still had huge potential.

That’s why, underneath the noise, there is alevel of positivity,which is constructive

When aparticularly didactic Fox Newspersonalityisinterruptedbya charmingadvertisementforKim Crawfordwines,NewZealandis doingsomethingright.

● PennyTuckeris aformerdiplomat, freetradeadvocateandcurrent executivedirectoroftheNZUSCouncil.

Crunch timefor theCPTPP

WhenTradeMinisters representingthemembersoftheComprehensiveandProgressive AgreementforTrans-PacificPartnership(CPTPP)gatheredinAuckland lastmonthfortheirannualMinisterial Commission,theyhadbeforethema numberofthornyissues.

Thisincludedwelcomingthe UnitedKingdomasCPTPP’s12th member,commissioning abroadreviewoftheagreementanddiscussing howtomanagethelargenumberof aspiranteconomiesnowliningupto join.

China’sapplicationislikelytoraise questionsfor anumberofCPTPP members,particularlyat atimeof heightenedgeopoliticaltension.

Therecanbelittledoubtthatthe Chineseapplicationis aseriousone andnot,assomewouldhaveit,a manoeuvretothrow aspannerin CPTPP’sworks.Chinaisseekingnew marketsforexpandingproduction. Chinasaysitiscommittedtoongoing reformandopeningupofitseconomyandthisis awayofdemonstratingthiscommitment.

Evenso,difficultiesoverChina’s CPTPPaccessionareforeseenin areassuchasChinesestate-owned enterprises,subsidies,intellectual property,andotheraspectsofdigital governance,aswellaslabourand environmentalissues.

Chinacanbeexpectedtobea toughnegotiator.Itwillbeconscious toooftheflexibilitiesgiventoVietnaminsomeareas.

OneareawhereitcanofferadvantagestoCPTPPmemberswithwhich itdoesnotalreadyshareFTAsis marketaccess.CPTPPmembersmay beattractedtothisandtothebigger pictureofembeddingChina,asthe world’ssecond-largesteconomy, morefirmlyintotheirleadingframeworkoftraderulesintheregion.

ManagingTaiwan’sapplicationat

The CPTPPneedstoremain abig tentwithroomforallwhoare preparedto subscribetoitshigh standards,writes StephenJacobi

theheightofgeopoliticaltensionin theTaiwanStraitwillbe adelicate exercise.Taipeihaseveryrightto seekaccession:NewZealandforexamplehasenjoyedexcellentFTAs withbothChinaandTaiwan.

EcuadorandCostaRicaarenew-

comerstoAsia-Pacifictradediplomacy.Uruguay’sapplicationismore complexsinceitis amemberofthe SouthernCommonMarket,knownby itsSpanishabbreviationMercusour.

Ukraine’sinterestintroduces adifferenttypeofpoliticalcomplexity:

negotiating atradeagreement withan economyinthemiddleof awarwill beanythingbutstraightforward. WhethertheUSmightonedayseek tore-jointheearlierTPPorCPTPPor proposesomethingelseneednot havetakenupmuchtimeatthe

An ambitiousandhigh-qualityinstrument

Rightfromtheverybeginning,the CPTPP’svisionhasbeenaboutthe moreopeneconomiesinApec comingtogethertoset anew standardforeconomicintegrationin theregion.Accessionisavailableto anyeconomywillingandabletomeet CPTPP’shighstandards,includingin bothmarketaccessandforwardlookingtraderules.

CPTPPisparticularlyattractive from abusinessperspective, includingas ameanstoeliminate costlybarrierstotradeand investmentforgoodsandservices, bothatandbehindtheborder,to promoteregulatorycoherenceand easeofdoingbusiness,aswellasto addresssustainabilityandother stakeholderconcerns.

In aworldwheregoodtrade liberalisationishardtofind,CPTPP stillstandsasanambitiousandhighqualityinstrument.Howtheprocess ofitsexpansionanddeepeningis handledwilldeterminehowuseful theagreementremains.

Intheperiodsincetheoriginal Trans-PacificPartnershipAgreement (TPP)wasfirstinitiated,manyother plurilateralfreetradeagreements havebeenconcluded.

Today,theworldisturning increasinglyinwardasnotionsof

bestabouttheWorldTrade Organisationandmultilateraltrade rules.

Instead,theUSischampioningthe Indo-PacificEconomicFrameworkas anew,non-bindingmodelfor economicco-operation,butwithout offeringmarketaccess.

Businesspracticeshavealso continuedtoevolve.Thepandemic hasshortenedglobalvaluechains. Thedigitaleconomyhascontinued toadvance.

WhileCPTPPisnowinoperation forall11originalmembers,thishas been aslowprocess.

Economieshavebeenslowto implementallCPTPPrequirements.

AucklandCPTPPMinisterial —there islittleappetiteforthisinWashington inthemediumterm.

ThebestoutcomefromtheAucklandMinisterialwouldhavebeenan agreementtomoveforwardwiththe processesthatwerealreadyestablishedinCPTPP’sAccessionsProtocol.Thisrequirestheprocesstobe initiated“within areasonableperiod oftime”ofreceiptoftheapplication andforaccessionworkingpartiesto beestablishedincloseconsultation withtheaspirants.

Itisunderstandablethatthese thingstaketime,butthatisallthe morereasontobegintheprocessif onlytoprovideencouragementto thoseinthewaitingroom,andto attractotherslikeSouthKorea,Philippines,andThailand,whicharestill consideringwhethertojointheparty. Butjump-startingtheaccessionsprocessappearstohavebeentooaudacious astepinAucklandwhere Ministersprioritised awiderreview ofotheraspectsoftheagreement. Thereis ariskthat alengthyreview willaddmoredelay.Thatwillbe regrettableforbusinessesintheregionwhichintheaftermathofthe pandemicarelookingfornewgeneratorsofbusinessgrowth.

InAucklandthechallengewasto deliversomeclearsignalsonthe futuredirectionofCPTPP.

“strategicautonomy,”protectionism, anditssidekick“industrialpolicy” havetakenhold.

TheUnitedStateswhichabruptly leftTPPinJanuary2017,hasnot signed afreetradeagreementfor someyearsnowandislukewarmat

Thepandemichasfrustrated progresswithCPTPP’sbuilt-inwork programme.Theagreementisin needofupdatingandexpandingto maintainbothitsrelevanceandits cuttingedge.

Yetatthesametime,thelistofsix economieswantingtoaccedeto CPTPPhasneverbeenlonger.

CPTPPhasalwaysbeenabout abig idea —freertradeandinvestment underbettertraderulescanprovide impetustoeconomicintegration, sustainableglobalgrowth,anddevelopment.CPTPPneedstoremain abigtentwithroomforallwhoare preparedtosubscribetoitshigh standards.

● StephenJacobiisExecutiveDirector oftheNZInternationalBusiness Forum.Thisarticleisadaptedfroma longerpieceoriginallypublishedbythe HinrichFoundation,Singapore.

Chinais‘willingtoplaybytherulebook’

First,whydidChinaapplytojoin theCPTPP?

China’sapplicationtojointheCPTPP (ComprehensiveandProgressive TransPacificPartnership)is aserious one.PresidentXihasstatedonmany internationaloccasionsthatChina willactivelyworktowardjoiningthe CPTPP,fullydemonstratingChina’s firmpoliticalcommitment.

China’sapplicationtotheCPTPPis also adecisionmadebytheChinese governmentbasedonitsown developmentstrategy,not adecision ofconvenience.

TheCPTPPrepresentsthe“gold standard”ofregionaleconomicand traderules,anditshigh-standard rulesareconsistentwiththedirection ofChina’sfurtherreformandopening up.Whileexpandingitsopennessto theoutsideworld,Chinaisalso acceleratingthepaceofdomestic reform.CPTPPwillform acritical pieceinChina’shigh-levelfreetrade agreement(FTA)networkasthe countryexpandshigh-standard openingup.

I’mgladthatChina’sapplicationhas beenwelcomedandsupportedby manyNewZealandfriends.Some pointedoutthat“therecanbelittle doubtthattheChineseapplicationis aseriousoneandnot,assomewould haveit, amanoeuvretothrowa spannerinCPTPP’sworks”.Thisisa correctinterpretationthat Iwould liketoacknowledge.

Second,IsChinaabletomeetthe CPTPP’shighstandards?

ThereisscepticismthatChinacannot meetthehighstandardsoftheCPTPP. Thatisunwarranted.

Infact,theChinesegovernmenthas conductedseveralroundsofin-depth researchandevaluationofmorethan 2300articlesoftheCPTPP,andsorted

outthereformmeasuresandlaws andregulationsthatneedtobe modifiedforChina’saccessiontothe CPTPP.Thecountryisreadytoplay bytheCPTPPrulebook.

Before IcametoNewZealand, Iwas personallyinvolvedinthatevaluationworkinBeijing.Recently,the Chinesegovernmenthassubmitted anexchangedocumentforits accessiontotheCPTPPandonthat basiswillprovideitsanswerstothe CPTPPquestionnaire.

Inthemeantime,Chinahasbeen running astresstestandhasimplementedthefirsttrialofreformand

opening-upinCPTPP-relatedrules. InlateJune,Chinaissued asetof measureswhichwillbeintroduced on atrialbasisinsomeofthe country’s free trade pilot zones and theHainanFreeTradePort.The measuresencompass33items,such asensuringequaltreatmentforboth domesticandforeignfinancial institutions,prohibitingthe requirementoftransferringor acquiringsoftwaresourcecodeasa conditionfortheimportationandsale ofmass-marketsoftware,etc.Itis expectedthatthemeasureswillbe rolledoutinotherareasnationwide

inthefuture.Thisisstrongevidence, amongothers,thatChinaiscapable offulfillingitsobligationsunderthe CPTPP.

WhatarethebenefitsofChina’s accessiontotheCPTPP?

ItrustChina’saccessionwillbring benefitstoNewZealandandallthe otherCPTPPmembers.Astheworld’s secondlargesteconomy,China currentlyhas a400millionstrong middle-incomecommunity,whichis expectedtodoubleto800millionby 2035,bringingabout asuper-sized marketopenforthewholeworld.

ThePetersonInstituteforInternationalEconomicsestimatesthat ChinesemembershipintheCPTPP willquadrupletheglobalincome gains.

ForNewZealand,China’saccession totheCPTPPwillbuildonour bilateralFTA,addingnewmarket access.Withthecommitmenttothe CPTPPhigh-standardenvironmental rulesanddigitalrules,therewillbe opportunitiesforustoco-operatein greentechnologies,low-carbon productsanddigitalproducts. Itisworthmentioningthatwith Chinesemembership,theCPTPPwill become amorelucrativepactandbe moreattractivetoothereconomies, whichwillbringinmorebusinesses forNewZealand.

IntheJointStatementbetweenNew ZealandandChinaontheComprehensiveStrategicPartnership,New ZealandwelcomedChina’sapplicationtojointheCPTPP. Iwishto extendourappreciationtotheNew ZealandGovernment.

CPTPPis anewlyemergingtrade architectureintheAsia-Pacific region.China,likeNewZealand,a faithfulandexemplaryactorin regionalco-operation,isbothwilling andcapableofjoiningtheCPTPP. IsincerelyhopeNewZealandwill supportandfacilitateChina’s accessiontotheCPTPPinthisyear’s chairmanshipand IhopeChinawill receivesupportfromfriendsofall sectors. Ilookforwardtothe establishmentofanAccession WorkingGroupforChinaatanearly stage,topromoteintegrateddevelopmentoftheregionandelevateour win-winco-operationto anewheight.

Theworldisturning increasinglyinwardas notionsof‘strategic autonomy’, protectionism,andits sidekick‘industrial policy’havetakenhold

WE TAKE BIOSECURITY SERIOUSLY, BECAUSEA COUNTRYTHIS BEAUTIFUL ISWORTH PROTECTING