Technology, more public R&D spend, 'enabling' policies needed to lift agricultural productivity: Rabobank

Tuesday 30th June 2015

New Zealand needs to reverse a decline in public research and development spending, foster “enabling” policies and provide access to technology to boost productivity in the food and agribusiness sector, says a new Rabobank report.

The agribanking specialist said it was crucial that slowing agricultural productivity growth be reignited to drive both farmer profitability and global competitiveness. While New Zealand’s agricultural productivity growth is still ahead of the world average of 1.7 percent per annum, it has markedly slowed in recent years from 3.2 percent annually in 1991-2000 to 2.3 percent in the decade of 2002 to 2011.

“This trend has typified productivity growth in many other high income nations, while low to middle income nations have accelerated,” said report co-author Georgia Twomey.

One exception has been the Netherlands, which has improved its agricultural productivity growth levels by focusing on innovation and value-add.

“The Netherlands is now, despite its resource challenges, the second largest exporter of agricultural products in the world,” she said.

The report says rising production costs in recent years has put pressure on the competitive position of New Zealand agriculture in world markets. Reversing a slowdown in productivity growth was a “particularly pressing issue” given the challenges the sector faces with strengthening environmental regulation.

Previously, productivity growth was driven by open market reforms in the 1980s and then from changing land use, particularly conversions from sheep and beef farming into dairy production. Significant expansion of irrigated land, which has doubled every 12 years since 1970, has also contributed to land use change and increased productivity, said Twomey.

Future expansion, particularly in dairy, is now challenged by the impact of land use on water quality due to higher nutrient levels, which will affect competition for land and productivity, the report said.

Digital agriculture in the form of precision farming, big data, sensor technology and drones presents uncharted potential for productivity gains and improved management practises, the report said.

Its New Zealand case study is of Neil and Pip Gardyne, who operate a mixed farming operation in the South Island and are now in the top 2 percent of the nation's farms.

A combination of improved genetics and pasture management has lifted their meat production per hectare by 157 percent since 1999, while GPS has also allowed for nutrient mapping of pastures and the application of fertiliser where it’s most required.

Neil and his 14 year old son Mark have identified 40 applications for drone technology in the past year, including providing eyes in the sky to reduce stock loss and improve management efficiency. They estimate annual cost savings of around $30,000 in the running of various machinery and time spent operating. In addition, they achieved a 14 percent reduction in stock losses and a 50 percent reduction in deaths of cast sheep in the first year of using the drones.

The report says the Gardynes are now looking at how to facilitate greater accuracy of dry matter/hectare measurement and analysing daily grass growth is the next goal – information which could help increase lamb production and add an estimated $300 per hectare to their bottom line.

BusinessDesk.co.nz

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