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Agri-tech sector to pioneer govt industry transformation strategy

Tuesday 2nd July 2019

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Agricultural technology should be one of New Zealand's leading sources of high-value jobs, exports and improved farming practice, but has failed to grow much in the last decade, prompting the government to make it the focus of the first of four new industry sector transformation plans.

In what was probably his last public act as Economic Development Minister before handing the portfolio to Phil Twyford after last week's Cabinet reshuffle, Parker released both a general guide to the industry transformation plan concept and a draft ITP for the agri-tech sector this morning.

The other sectors targeted for such plans are food and beverages, digital technology, and forestry and wood processing.

"Agri-tech exports are estimated at around $1.5 billion annually," the Ministry of Business, Innovation and Employment says in an overview of the ITP strategy. "However, exports have been flat for a decade and the uptake of this technology across the primary sector and related manufacturing sectors has been low."

The reports released today note that the export figures measure only exports of agri-tech goods rather than including services exports.

"The sector lacks a coordinated supporting ecosystem and has weak international linkages", which was "inhibiting New Zealand's ability to maximise significant export opportunities."

Accordingly, a draft agri-tech sector would seek to enable more sustainable production, increase exports, and drive innovation and uptake of agri-tech "across the primary sector and related manufacturing sectors".

While New Zealand was a trusted source of high-quality food for international consumption, the agri-tech sector suffers from a variety of factors that have tended to hamper its growth, according to the draft plan authored by David Downs, a general manager at New Zealand Trade and Enterprise who has been leading a cross-agency agri-tech taskforce since February.

These include the fact that not many other countries' primary sectors are based on pastoral farming, making much of New Zealand's agri-tech innovation irrelevant or difficult to adapt in export markets. New Zealand farmers were also slow to adopt new agri-tech systems and while research and development funding for the primary industries was substantial, the totals being devoted to agri-tech were relatively small.

This resulted in "a lessened amount of IP (intellectual property) ready for commercialisation".

The "lack of a signal from government through policy and other mechanisms about the importance of the sector to New Zealand" was also a factor. The industry had only recently formed an industry representative group and existing research activity was more fragmented than it might be.

Complacency was also an issue.

"There appears to be a common perception among the wider New Zealand population that we are already a world leader in agri-tech. This is an assumption that is not borne out by the evidence," the report says, citing Ireland, Israel, Singapore and the Netherlands as global leaders in the sector, in part because all had faced resource constraints or crises that had motivated action.

The draft plan proposes a vision for an agri-tech sector that is "globally competitive, vibrant" and "producing capable, ingenious value-adding companies that are good for the world, solve New Zealand and the world's sustainable problems (environmental, social, economic and cultural)".

The use of companies as a unit of measurement was vital. "The economy will grow as the result of growing individual and groups of companies," the report says. "The interventions and actions need to ultimately have impact for companies."

Pursuing value-adding technologies was also an important element of the country's response to rising protectionism, which could impair markets for commodities, but which high-value food and agri-tech processes could circumvent because of their foundation in value rather than volume.

Additional research on export market opportunities and potentially "looking again at the science system" to check its alignment to sector needs were also likely.

Parker said the plan would now be subject to consultation with a view to implementation in 2020.

(BusinessDesk)



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