Innovation in times of change
New Zealand's rural and agribusiness sector has been the backbone of the country's economy for decades.
Despite the sector's importance, it continues to face numerous challenges, including changing weather patterns, fluctuating commodity prices, and the ever-present debate around reducing emissions. However, there are reasons for optimism, particularly given the sector's ability to adapt and innovate in the face of adversity.
Agriculture has always been a significant contributor to global emissions. At the recent Rural Leader’s Agribusiness Summit held in Christchurch, keynote speaker Devry Boughner Vorwerk cited that it had been determined as contributing 40 to 50 per cent of all climate impacts. This has led to increasing pressure on the agribusiness industry to reduce its emissions and adopt more sustainable practices. New Zealand faces unique challenges in this regard, as it seeks to position itself as a global leader in the fight against climate change.
One of the biggest difficulties currently facing the agribusiness industry is the need to reduce emissions while maintaining profitability. Many farmers feel the costs of transitioning to more sustainable practices are simply too high, particularly given the low margins that are typical in the industry. However, there are opportunities to mitigate these challenges with the use of technology and innovation.
One example of this is precision agriculture, which uses data and technology to optimise crop yields and reduce inputs such as water, fertilizer, and pesticides. This not only helps to reduce emissions but also improves the bottom line for farmers by reducing costs and increasing yields. "We are starting to see this more and more in the market,” says Conrad Headland, Associate Director of Colliers Rural & Agribusiness in Bay of Plenty and Waikato.
“A current property on the market with Colliers is subject to a wide range of technologies as part of its state-of-the-art blueberry setup. The vendors have taken the time and effort and made a considerable investment to achieve a system that not only mitigates the labour-intensive process of blueberry farming, but also adds automation to increase yield and decrease fruit lost through pests and other factors such as root rot.” This automation can be controlled via a mobile phone, resulting in fast reaction times to deal with any potential issues as well as allowing more time for the vendor to deal with other business areas.
Ruth Hodges, Director Colliers Rural & Agribusiness in Otago and Southland, says that in addition to these technological solutions, there are also opportunities to capitalise on changing consumer preferences. “As more and more consumers prioritise sustainability in their purchasing decisions, there is a growing market for sustainably produced food products,” Hodges says. “This presents an opportunity for agribusinesses to differentiate themselves in the market by adopting more sustainable practices and communicating this to consumers. Speaking with purchasers regarding their wish list on agricultural properties, sustainability is becoming an increasingly important requirement.”
Colliers recently presented Glen Echo Station to the market, a truly impressive, large-scale station in Southland. The farm management team prided itself in making environmentally conscious decisions, in particular as appropriate to QEII covenants where the landowner voluntarily protects a special open space feature in perpetuity. This was extremely well-received by each interested party and became one of the major drawcards for Glen Echo Station.
The challenges facing the agribusiness industry are significant and not limited to New Zealand, but there are also opportunities to embrace change and capitalise on shifting consumer preferences. By adopting more sustainable practices, investing in technology and innovation, and providing farmers with the right support and transitional mechanisms, it is possible to build a more sustainable and resilient agribusiness industry that can continue to compete in the global market. With the right mindset and approach, New Zealand has the potential to be a global leader in sustainable agriculture and to set an example for other countries to follow.