Date posted: 22/05/2020 5 min read

Working together: Turning challenges into opportunities for NZ’s primary sector

National President of Federated Farmers of NZ, Katie Milne, and Global Head of Agribusiness for KPMG, Ian Proudfoot CA, share how organisations and farmers can overcome the greatest challenges facing NZ’s primary sector.

In Brief

  • While COVID-19 is an acute challenge in 2020, climate change is a defining issue of our time, and without action it will continue to have negative and costly consequences for future generations
  • For sustainable farming to work, agriculture needs to produce more food without causing environmental harm
  • It is important for farmers to work with the government to create a sustainable future

The primary sector remains a major driver of New Zealand's economy, however environmental and social issues such as drought, bushfires, the COVID-19 pandemic, climate change and food insecurity are all cause for growing concern in this space.

We speak to Katie Milne, National President of Federated Farmers of New Zealand, and Ian Proudfoot CA, Global Head of Agribusiness for KPMG, to examine the challenges facing the primary sector, and how rapid change is creating opportunities for both innovation and disruption.

The impact of climate change

Climate change is a defining issue of our time, and without action today, these impacts will have many negative and costly consequences for future generations.

According to Proudfoot, the primary sector's role in New Zealand's economy is a vital one.

"While COVID-19 is rapidly changing the world as we know it, the primary sector remains the most fundamental sector of our economy. It utilises more of our land and water than any other parts, and is inherent to who we are, our culture and our society," he says.

Shifting weather patterns, increasing temperatures and reduced rainfalls threatened food production1 around the world long before the COVID-19 crisis arose.

In his role at KPMG, Proudfoot helps his clients find the right information on trends and changes in the primary sector so that they can make well-informed decisions. Proudfoot says that in our rapidly changing world, it is critical that we value a diversity of opinion and take action to prepare for the future of the sector.

"Climate change is happening, and it's the biggest issue facing our society today. Future generations will not only judge how we recovered from the COVID-19 pandemic, but how we addressed the systemic problem of climate change," Proudfoot says.

"We have seen a real shift in leaders and organisations moving from saying, 'Yep, we're concerned about climate change,' to 'We need to take action as we can no longer afford to wait on this'. As a country, we must respond and address the impact of climate change. We don't have 10 years. We need to move quickly and open our eyes to what is happening around us."

Sustainability is key

In 1984, New Zealand’s government made the economic decision to improve the sector by eliminating agricultural subsidies and investing into R&D2.

With the primary sector being the backbone and primary track to economic recovery for New Zealand post COVID-19, Proudfoot says it is important for the primary sector to practice forward-thinking in the face of disruption and plan for the future.

"When you recognise that the right to farm is a licence granted by the community based on how you act, it is critical to incorporate sustainability into your processes. The agricultural industry is entering a period of dramatic change, so it is increasingly important to make informed decisions with the right information," Proudfoot says.

For sustainable farming to be effective, agriculture needs to produce more food without causing environmental harm. Milne says that unsubsidised farming practices have forced farmers to innovate, and devise new and more efficient methods that are focused on sustainability.

"It's been a win-win situation, and has driven us to become more efficient in terms of our practices because we are not relying on government subsidies. It has helped us create a better, and more sustainable lifestyle for our families," Milne says.

"Technology and innovation has helped us fill the resource gaps of labour shortages, and has been used as a way forward in farming. It has enabled us to produce great results that have the least impact on the environment."

Greater investment in water storage is also vital as a response to climate change and for production diversification and resilience.

"Water shortages not only result in significant production loss, it also tends to lock us into what we've always farmed, and the way we've farmed. Water storage gives farmers – and indeed entire rural communities – more options going forward," Milne says.

"With good supplies of water, even smaller lifestyle block owners can feel emboldened to put in fruit trees or try some different crops. Larger farms that have held onto big areas of land just to try to ensure adequate feed supply in dry periods can feel confident about selling off 10 or 20ha, helping to fund that water storage but also freeing up land for new enterprises in horticulture, viticulture and so on."

"Sustainability – economic and environmental – is thus boosted across the board."

"Climate change is happening, and it's the biggest issue facing our society today. Future generations will not only judge how we recovered from the COVID-19 pandemic, but how we addressed the systemic problem of climate change."
Ian Proudfoot CA, Global Head of Agribusiness for KPMG.

Supporting farmers facing primary sector challenges

Across any sector or organisation, having a place at the table to be part of the solution is integral for the long-term success of addressing challenges.

As an advocate for New Zealand's farmers, Milne is passionate about helping farmers inform the government on the issues they are facing.

"It is important that our farmers are working with the government to devise policies and viable solutions that improve economic outcomes. Well thought-through and practical policies deliver the wellbeing and confidence that is needed to farm well," Milne says.

"When international and national policies around food security, farming and agriculture are being debated, our farmers – the people who will actually implement any changes – need to be heard."

"It's a great time for the entire sector – and government – to ramp up work on a real 'New Zealand Farming Story', one that packs punch and is meaningful as we take our produce to the global marketplace."

As an organisation who seeks to create change within the sector for their clientele, Proudfoot's team at KPMG have been part of a government/industry partnership called Te Hono for almost a decade.

With the goals of collaboration, alignment and transformation, KPMG's work with Te Hono has been instrumental in supporting the whole primary sector to create a New Zealand for future generations3.

"KPMG has been a foundation supporter of Te Hono, an organisation that exists in New Zealand to bring together government and industries," Proudfoot says.

"With a vision to bring everybody together to head in the same direction, our team has been able to build relationships to drive the success of New Zealand's primary industry."

Looking to the future, Proudfoot encourages all New Zealanders to understand how their actions today influence the future being created for future generations. He says that our ability to enact change is stronger in our current world and by supporting the sector, New Zealand can adapt to change and prepare for a sustainable future.

"We're on the cusp of something amazing. The world has awoken to the importance of food and the role that food plays in our culture, community and society, and also the role the primary sector plays in maintaining our health and wellbeing as human beings," Proudfoot says.

Sources:
1. https://www.un.org/en/sections/issues-depth/climate-change/
2. https://theeconreview.com/2017/02/22/new-zealand-the-model-for-farms-of-the-future/
3. https://www.tehono.co.nz/

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