It is eight years since the Primary Growth Partnership programme was announced by the then recently elected National Government. At the end of 2016 there were 20 projects under way and just two completed, but 30 June sees the completion of FarmIQ, the largest of the red meat sector programmes. This seems to be an appropriate point to evaluate the success of PGP, in particular the six meat and two wool programmes which have been allocated total Crown and industry funding of $342 million.
The key point about PGP is its funding structure, with the taxpayer and industry putting up approximately half each, thus ensuring industry commitment to a better than even chance of a successful outcome. Nevertheless, as a general principle, the larger the amount of money invested, the greater the difficulty of measurement and the wider the potential for missing the target.
The two largest programmes across PGP are FarmIQ with a combined budgeted investment of $124 million and Transforming the Dairy Value Chain’s worth $161 million. The remaining meat and wool programme reaches a grand total of $241.6 million including the Red Meat Profit Partnership ($64 million investment), FoodPlus ($58.2 million), Sheep Industry Transformation ($33.2 million), Omega Lamb ($25 million), Marbled Grassfed Beef ($23 million), Wool Unleashed ($23 million) and Passion 2 Profit ($15.4 million). Collectively, the red meat and wool programmes aim to achieve $3.1 billion of annual benefits by 2025, while the Dairy Value Chain programme targets annual benefits of $2.7 billion by 2020. If all this is achieved, the meat and wool projects will deliver a 7.7 percent ROI and the dairy programme 16.8 percent.
A review of the programme updates and stock takes provides a good summary of how the individual programmes are progressing, but, as always with calculations of benefits achieved, it is virtually impossible to judge how accurate the projections will be. But. undoubtedly. one outcome will be an agricultural sector much better off than would have been the case without the investment, although farmers may not yet be able to see how these programmes have directly benefited them. Inevitabl, it will be several years after the PGP has wound up before attribution of benefits is possible, while other factors will have intervened to fudge the results. More important, not all farmers will be affected equally, whether because of differing regional effects and farm size or, more likely, inconsistent uptake across the sector.
FarmIQ began in 2010, so it is timely to review how much has been spent and what progress has been achieved to date, although the forecast benefits of $1.1 billion aren’t scheduled to kick in fully until 2025. The programme’s stated objective was to establish a demand driven integrated red meat value chain from pasture to plate which, seven years on, doesn’t appear much closer to fruition, although there are some promising signs.
Collier Isaacs has run FarmIQ since shortly after its inception and he told me the individual projects have either been incorporated into business as usual or will be reviewed for continuation within the commercial partners’ business operations. FarmIQ Systems has been established as a separate company and has successfully introduced to measure animal performance, the Genetics project has developed two specific breeding chips which are available to all farmers who wish to introduce those genetics into their flocks, the on farm productivity programme has concluded with more than 1300 farmers taking up the recording and reporting systems, while the processing project finished 18 months ago after the successful introduction of Eating Quality Beef by Silver Fern Farms .
Isaacs had hoped for faster uptake of FarmIQ’s productivity measurement systems, but remains optimistic this is more of a possibility, now the whole exercise is in his words becoming “more of a team sport.”
Silver Fern Farms (SFF) general manager sales, Grant Howie, is really enthusiastic about the success of the company’s branded product programme; this has begun to realise its global potential following extensive consumer research and a careful introductory period, involving the establishment of the entire value chain system from farm to plant to market. As he says, everything takes longer in the meat industry, and getting farmers to supply livestock to meet Beef EQ specifications has been no exception. Between 1 July and 31 October SFF will offer 40c/kg for EQ compliant cattle, critical to ensuring sufficient product for the high wealth markets, Germany, China and US being the key destinations. Measurement of lamb eating quality is making slower progress, but Alliance-led Omega Lamb is also working towards this objective.
The RMPP is aimed squarely at the on farm end of the chain and, although starting two years later, has already achieved notable success including getting industry buy-in to the NZ Farm Assurance Programme, initiating an electronic Animal Status Declaration (eASD) trial, and improving farmer uptake of new technology.
The benefits from PGP will undoubtedly be increased by the mutually reinforcing interaction between compatible programmes such as FarmIQ and RMPP, while further success will accrue from the other programmes, both meat and wool. My gut feel tells me the full benefits will take much longer than the next eight years to occur, but longer-term there will be some huge improvements in agricultural sector fortunes.