Agriculture is the backbone of New Zealand economy, with over 95 percent of agricultural production exported. The drive for research and innovation has long been a feature of the sector, with robust investments in education, animal health, farm equipment and management technology, seed production and plant genetics.
As one of the world’s most efficient agricultural economies, with respected pastoral farming expertise and high quality food production systems, New Zealand is well-positioned to work with other countries facing challenges as the world population heads towards an estimated nine billion in 2050.
New Zealand’s agricultural innovation dates back to the first refrigerated meat shipment in 1882. The invention of the electric fence in the 1930s, was another early landmark in pasture management. In 2013, dairy science’s first genomically-selected bulls were produced.
New Zealand consultancies like Sourceworld, for example, help farms maximise crop yields and increase profitability, drawing on New Zealand farm management techniques and technology, and partner with local agritechnology companies to do so – in locations as diverse as Brazil and Eastern Turkey.
New Zealand’s dairy industry is its biggest export earner, and generated NZ$17 billion in the year to December 2014, and accounted for 34 percent of total primary industries exports and 28 percent of New Zealand's exports. Its largest market is China, followed by the United States and the United Arab Emirates. Milk powder, butter and cheese is in particularly strong demand.
Reasons New Zealand agribusiness is different
1. Pastoral farming
Pastoral farming (dairy, sheep, beef, wool) comprises 69% – more than two-thirds - of New Zealand’s gross agricultural revenue.
Most dairy and cattle farming in New Zealand is pastoral making farmers less dependent on grain feeding and the energy-intensive housing of animals during winter months. The intelligent use of natural resources, along with the rapid adoption of new methods and technologies give New Zealand a competitive advantage in grazing animals.
2. No government subsidies
Rather than providing subsidies for individual farms, the New Zealand government looks to provide a framework which enables sustainable economic growth.
Farmers in New Zealand are improving productivity for the long term, making management decisions based on the responsible and efficient delivery of high-quality products to market.
From 1984 to 2007, the agriculture sector’s total productivity increased by an annual compound growth rate of 3.3 percent. Although New Zealand has cut its sheep flock by more than 50 percent to 30.8 million since 1984, it still produces similar volumes of sheep meat through the use of best practice integrated systems from seeds, pasture, genetics, animal health and farm management to food processing.
Although it does not subsidise farmers, New Zealand publicly funds certain areas of research and development with a view to improving agricultural productivity and profitability. New Zealand has two government-funded research organisations, AgResearch and Plant and Food and also partners with industry through the Ministry for Primary Industries administered Primary Growth Partnership.
3. Technological innovation
As an island nation, New Zealand has developed an innovative and hands-on approach to agribusiness problems.
New Zealand is committed to growing its agricultural innovation and expertise, and publicly funds some research and development. The government invests around $30 million annually into research and development focused on improving agricultural productivity and profitability.
On farm technology development is grounded in “a typical farmer's approach to solving farm problems,” according to the Gallagher Group, the company behind the electric fence invention and a global leader in live animal weighing and electronic animal identification.
Continued efforts to lift the quality, productivity and performance on farms has led New Zealand companies to innovate in milking machines, irrigation and animal genetics and other areas. Improvements are introduced, tested and trialed onshore then adapted for use globally.
New Zealand company, Tru-Test which invented the milk meter and is now the world's largest supplier of ICAR (International Committee for Animal Recording) - approved milk meters for herd improvement and livestock scales, and continues introduce new innovative technologies to market
Farms in New Zealand use high-technology systems to support animal handling, pasture management , budgeting and overall productivity gains. Local use fuels continual investment by local agri-technology companies in research and development. For over 20 years, Zee Tags has produced technologies such as livestock identification tags and applicator devices, sold to farmers located in more than 40 countries.
With a heritage of 100 years, Livestock Improvement Company (LIC) out of New Zealand was one of the first in the world to offer genomic selection technology for use in identifying elite sires as yearlings – enabling early identification of the best animals for breeding.
4. Value chain efficiency
New Zealand agritechnology solutions, such as herd improvement, software, pasture mapping and management are being integrated into on-farm practices, maximising increases in productivity and profitability.
New Zealand’s agritech sector is a NZ$3 billion industry, generating export sales in excess of $700 million annually.
Increasingly, there are new collaborations up and down the agricultural value chain - from seeds and grains, to animal genetics, quality control and on to farm assurance systems, farm equipment and technology.
New Zealand is a pioneer in on farm efficiency, which underpins the huge growth in dairy production in New Zealand in recent years. New Zealand dairy companies control one third of international dairy trade, and New Zealand remains the largest exporter of dairy products.