Balancing environment, community and business, KPMG report

You wait for a bus and then three come along at once. The last in a trio of agribusiness reports released over the past week is Volume Four of KPMG’s Agribusiness Agenda 2013: Balancing the needs of the environment, communities and business.

The report delivers the message that the New Zealand industry must be increasingly vigilant about maintaining standards.

KPMG’s global head of agribusiness, Ian Proudfoot, says the sector can no longer tolerate its ‘weakest links’.

“The global reputation of New Zealand’s primary sector lives or dies on every participant doing the right thing each and every day.”

“In a connected world, it only takes one person to fail in fulfilling their duty to the environment, their animals or the community to put significant pressure on the whole sector’s license to operate.”

During the Roundtable discussions with industry leaders held in March and April this year, industry leaders recognised that the sector must demonstrate its credentials around sustainability, says Proudfoot.

“Failure to back the claims we make with substantive actions creates real risk to market access, and is unlikely to be acceptable to the wider population in New Zealand.

“This means that industry has to be prepared to stand up to those failing to meet their obligations, and take action to remove them from the industry if they are unwilling to make the necessary changes.”

Another key message was that true sustainability cannot be achieved by increasing the level of regulation and cost heaped onto the industry.

Ian Proudfoot says an inappropriately high level of regulation would leave the New Zealand primary sector ‘uneconomic and uninvestable’.

Global research by KPMG, quoted in the Agenda, indicates the effect of requiring the food production sector to fully pay its direct and indirect environmental costs – which would turn an operating profit of US$89b in 2010 into a US$110b loss.

“This would not be sustainable in a world needing to produce 70 percent more food over the next 30 years.”

“The challenge is setting regulation that incentivises the sector to reduce its environmental intensity and bear an appropriate share of cost, while not overburdening it.”

The leaders indicated that it is the views of Auckland latte drinkers – deemed to be New Zealand’s version of the ‘man on the Clapham Omnibus’ in terms of influencing Kiwi politicians – that will direct the future of the primary sector. This report takes a straw poll  of some to show which way the wind is blowing on a number of issues including water use, consents and legislation.

A number of meat industry leaders contributed to the preparation of the report, including Keith Cooper (Silver Fern Farms), Scott Champion (B+LNZ), Grant Cuff (Alliance), Tony Egan (Greenlea Premier Meats), Sir Graeme Harrison (ANZCO Foods), Tim Ritchie (Meat Industry Association), Owen Poole ((formerly Alliance) and Sir James Wallace (Wallace Corporation) among others.

The Agribusiness Agenda explores these issues – and more – in further depth. Read more 


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