An ANZ Insight report Greener Pastures: The Global Soft Commodity Opportunity for Australia and New Zealand quantifies the size of the opportunity open to New Zealand and Australian agriculture as a result of the shift in global economic growth to Asia.
Key findings from the report are that rising incomes and changing diets in developing countries mean the world will demand at least 60 percent more agricultural output by 2050, compared with 2005-2007. New Zealand could stand to gain an additional $550 million, which could increase to $1.3 trillion with favourable conditions and targeted actions, the report says. However, intense competition from emerging players with countries like Brazil, Malaysia and Indonesia becoming major threats. It also determines that $340 million in additional capital is needed to drive production growth and support NZ farm turnover between now and 2050.
Capturing the opportunities offered to the potential “food bowl of Asia” will not happen of its own accord, says Graham Turley ANZ’s managing director commercial and agriculture. “Significant barriers exist that will have to be overcome at every step of the supply chain.”
Sourcing capital to find growth, attracting skilled labour, intensified focus on national agricultural R&D, improving supply chains and targeting key markets are among those barriers.
“The danger we face is that we are not alone in seeking to exploit the global soft commodity boom and countries, like Brazil with its highly successful soy industry, are leading the charge.”
“If we are serious about wanting to develop vibrant, globally dominant and highly profitable industries, we need all stakeholders in the industry to work together to bring about change.
“There are environmental issues and foreign and domestic investment comfort levels that New Zealanders also need to consider in making these choices. These are the choices facing policy makers as they strive to make New Zealand more economically successful,” says Turley.