Monthly Archives: August 2012

Business Growth Agenda a big stretch, says Barber

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The Government’s Business Growth Agenda progress report on Building Export Markets specifies the target of increasing New Zealand’s exports from 30 percent today to 40 percent of GDP by 2025. It’s a big stretch, says meat industry commentator Allan Barber.

The progress report states that primary sector exports have outpaced the rest of the export sector, growing by half in real terms since 2000 at an average productivity growth rate of 2.1 percent per annum. To achieve the target of 40 percent of GDP, agriculture will have to maintain its growth rate for the next 13 years, while the rest of the economy must lift its game considerably. Manufacturing and services have been increasing by one percent a year and need to lift this to five percent over the coming decade, or alternatively agriculture will be required to expand further to bridge the gap.

This is an enormous challenge, equivalent to creating 250 more knowledge-intensive businesses creating $100 million from exports a year. The report cites Navman as an example of the type of business required. How many more like this can we think of? Not many, so it is highly improbable that these new businesses will emerge from areas totally unconnected with agriculture.

Primary sector exports will therefore have to increase by quite a bit more than the average of the past decade, if the target as a whole is to be reached.

Using a different report and set of figures the Riddet Institute in its recent Call to Arms report challenged the primary sector to treble its exports to $60 billion by 2025, equivalent to New Zealand’s total exports of goods and services today. However exports of $20 billion are only one third of the total. These figures emanate from the Government’s Economic Growth Agenda.

We can quibble with the different measurements and totals used to arrive at the conclusions (GDP, total exports, growth rates), but the fact remains, it’s one hell of a big stretch to see how to reach the target. The goal of the Boot Camp taking place at Stanford University this week is to see whether like-minded companies can develop the strategies required to bring agriculture up the value chain, enabling the sort of increase envisaged.

The question is whether the Government’s progress report on the activities of the Business Growth Agenda will contribute to the big goal and, if so, how significantly. It is a big ask, because it demands growth of between 5.5 percent and 7.5 percent, depending on the economic growth path, compared with Treasury’s forecast for the next three years of 1.8 percent.

The report says with a degree of understatement that “to achieve our target will require a concerted effort to develop more internationally competitive businesses in both the commodity and high-value technology-based sectors.” This may be official speak for ‘we know we haven’t got a hope, but we have to start somewhere.’

The key planks of the export growth development strategy are: Delivering a Compelling New Zealand Story; Improving Access to International Markets; Increasing Value from Tourism; Making it Easier to Trade from New Zealand; Growing International Education; Helping Businesses Internationalise; and Strengthening High-Value Manufacturing and Services Exports.

The progress report finishes with a summary of the strategies under each of these headings and Progress Indicators listing detailed actions underpinning the strategies. There is an enormous amount of work going on, notably in trade negotiations, removal of red tape for business, trade missions into key markets and tourism developments such as SmartGate at the airport.

But all work on developing a compelling New Zealand story is listed as a new project which indicates one of the major problems encountered in lifting our exports as a percentage of GDP. There is no agreed brand image under which all New Zealand’s exports and tourism experiences are promoted. The meat industry’s main brand has for a long time been New Zealand Lamb which has been very successful, but a major complaint has been the competition in export markets between exporters. Apart from North America, cooperation has been seriously lacking.

Part of the problem has been the complete lack of a generic New Zealand brand image. Development of this with a believable and compelling story to back it is an absolute priority, because brands take a long time or a lot of money to gain awareness, probably both.

This progress report is the first of six with the other five to come being Innovation, Skilled and Safe Workplaces, Infrastructure, Natural Resources and Capital Markets. Obviously these other areas will play an important role in achieving the export goal.

The Government deserves credit for coming up with a coherent strategy, but it will have to generate a tremendous response from the private sector if the goal is to come close to being realised. Another challenge is the high proportion of SMEs in New Zealand which must be inspired to pursue the new business opportunities capable of converting them into large businesses with the requisite scale.

This article has also appeared at interest.co.nz.

Building Export Markets, government releases progress report

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The Government has today unveiled its first Business Growth Agenda Progress report on actions to boost New Zealand exports. It is a timely appearance as the Primary Sector Boot Camp reaches its halfway point in the US.

Launched by Finance Minister Bill English and Economic Development Minister Steven Joyce, the Building Export Markets report from the Ministry of Business, Innovation and Employment (MBIE) confirms the Government’s target to increase the contribution of exports to the economy from 30 percent to 40 percent of GDP by 2025.

English says this a challenging target and achieving it will require a concerted effort by New Zealand over many years. It will also require the continued development of new and expanding export markets.

“It is only through exporting that New Zealand, with a small domestic market, can deliver the growth and productivity required to enhance the wealth of our country and create more and higher paying jobs,” he says.

“Committing to this ambitious goal means the Government will stay focused on supporting firms to grow their exports.”

Steven Joyce says the report highlights the significant shift in economic power from the West to the East that is expected to happen over the next 20 years.

Building Export Markets is the first of six progress reports on the government’s Business Growth Agenda. Others will address innovation,skills, capital markets, infrastructure and resources. The reports lay out the work programme government agencies are implementing. Each has an informal portfolio group of ministers specifically grouped around the work streams, to drive the Business Growth Agenda forward and focus on what matters to business and companies.

Government intends to see three additional cross-cutting themes to be reflected across the Business Growth Agenda workstreams. These are: Maori Economic Development, Greening Growth; and Regulation. Better telling the ‘New Zealand Story’ is another Government priority and work is already underway with key stakeholders on “developing a compelling and consistent narrative about our country’s special qualities that work for a range of exporters and sectors,” according to the Ministers.

Actions contained in the Building Exports report include improving access to international markets, making it easier to trade from new Zealand, helping businesses internationalise, increasing value from tourism and high-tech manufacturing, growing international education and strengthening high-value manufacturing (including food and beverage manufacturing) and services exports.

“This first report is important, as it lays out the challenge for achieving growth – which is about being much more closely linked into the rest of the world and taking advantage of our opportunities,” says Joyce.

“While the world is going through tough times, the growth in Asian incomes will occur over the next 20 year. So there will be job growth, New Zealand’s challenge is to ensure it occurs in New Zealand, not in Australia, or somewhere else.”

The report shows that beef, lamb and wool accounted for 13 percent of New Zealand’s total $47.7 billion goods exports in 2011.

The Building Export Markets report is available here.

Carter in US for boot camp

Because of its size and importance, New Zealand’s primary sector, which currently accounts for 55 percent of exports is “critical” to achieving the government’s desired growth, the report says, so the outcome of this week’s Primary Sector Boot Camp at Stanford University will also be critical.

Minister of Primary Industries, David Carter, is part of the nine-strong Export Markets ministerial group, which also includes Prime Minister John Key, Steven Joyce, Murray McCully and Tim Groser.  Carter is travelling in the United States this week to attend the Boot Camp and also to talk with US agriculture sector political leaders and officials.

“This is an excellent opportunity for the leaders of some of our most forward-thinking primary sector companies to collaborate on formulating a plan to leverage New Zealand’s competitive advantage globally,” Carter said before he left.

“It’s not often that we can get a powerful group like this representing over 80 percent of New Zealand primary sector exports around the table, and I am confident of a positive outcome.”

About 20 leaders from New Zealand’s dairy, meat, seafood, wine and horticulture industries are among those attending the week-long camp alongside top government representatives from MPI and NZ Trade and Enterprise. The group will be hearing from first class speakers to inspire and motivate their thinking. The event has been supported with a $100,000 grant from AGMARDT.

Among the range of agricultural organisations the Minister is meeting with separately to discuss common New Zealand–US primary industry interests are the Tri-Lamb Group and US Cattlemen’s Association.

“These meetings further strengthen the New Zealand-US bilateral relationship and give our two countries the opportunity to canvass a range of issues in the primary industries policy area.  It is an opportunity to highlight the excellent collaborative work we already have with the US though the Global Research Alliance on agricultural greenhouse gases,” says the Minister.

“I particularly look forward to discussions on the mutual benefits that will be realised through the Trans-Pacific Partnership free trade agreement currently under negotiation.

“The TPP is important to New Zealand’s trade future and this visit will provide the opportunity to take political level readings on its progress.”

Knives are sharpened for tri-nations butchery competition

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Nominations are open and soon a trial will take place for the 2013 Wedderburn Sharp Blacks. The trial will see the current team put through their paces against a team of challengers, all vying for one of the coveted five spots in the team.

For the past two years, the Wedderburn Sharp Blacks have taken on Australia in a test match, taking a side of beef and a lamb in a two-hour timeframe and turning it into a butchery display. In 2013, the test match will become a tri-nations, with Britain sending a team to compete.

Kim Doran from Retail Meat New Zealand, the competition organiser, says the contest is becoming a real highlight on the industry calendar.

“The rivalry developing in these test matches is intense. It’s all good-natured and there’s a great camaraderie developing between us and the Australians outside the match which can only be good for the industry.

“Adding the British team to the mix is an exciting prospect and is only going to add to the experience,” says Doran.

The 2013 Tri-Nations will take place on 9 March in Wanaka. Nominations for the 2013 Wedderburn Sharp Blacks close on 31 August.

Input sought on animal welfare proposals

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Meat exporters, processors and producers have an opportunity to give their input, alongside other interested parties, to the Government’s proposed changes to New Zealand’s animal welfare system.

Primary Industries Minister David Carter says the proposals set a strategic direction for animal welfare and improve the way the current Animal Welfare Act 1999 operates.

“Animal welfare matters. It matters because how we treat animals says something important about us as a society. It also matters for New Zealand’s reputation because our trading partners and international consumers rightly expect us to maintain high standards of animal welfare.”

The proposed national strategy, the first of its kind, will canvass the views of stakeholders with animal welfare interests, identify the strengths and weaknesses of the current system and set a vision for New Zealand’s animal welfare system into the future, the Minister says.

“The proposed changes to the Animal Welfare Act will clarify the way it operates and make it easier to enforce.”

Radical change is not proposed, as the suggested values, outcomes and approaches are already implicit in the system, neither is it seeking to lift standards, the Ministry for Primary Industries’ discussion paper says. A key proposal is that codes of welfare, which currently set the standards for animal welfare, are replaced with a combination of regulations and guidelines. Regulations will be directly enforceable in law. Guidelines will provide information and advice but will have no legal effect.

Delivering the strategy will require action from the meat industry in terms of implementing industry schemes to improve welfare; recognising and building stockmanship skills, educating members about best practice and meeting standards, measuring animal welfare performance and engaging with the public and consumers. It also encourages continuing collaboration in setting standards, co-investing in research, contingency planning and the existing joint Government/industry initiative to improve animal welfare compliance.Many of these actions are already in place.

The closing date for submissions is 28 September 2012. Read more about how to make a submission and to read the discussion paper.

Cooper ‘walking the talk’

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Cooper ‘walking the talk’

The purchase of a 245 hectare sheep and beef finishing farm last year means that Siver Fern Farms’ chief executive is now ‘walking the talk’, according to an article in the Otago Daily Times. As a farm owner, the article says, Cooper better understands farmers’ problems and challenges and is using that knowledge to help shape the company to meet those needs. Read more …

Games legacy, global campaign against hunger starts

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British Prime Minister David Cameron with Michel Temer, Vice-President of Brazil, Football legend Pele (left) and Olympic double gold medallist Mo Farah (right) at the Olympic hunger summit in Downing Street, 12 August 2012. Photo: Foreign & Commonwealth Office (some rights reserved).

A more serious tone is emerging post-Games, with Britain’s Prime Minister David Cameron and Brazilian Vice-President Michael Temer taking the opportunity to put the spotlight on helping millions of children suffering from malnutrition in the the world’s poorest countries.

Olympic double gold medallist Mo Farah, Olympic great Haile Gebrselassie and football legend Pele, who have all campaigned to end the cycle of hunger and poverty by tackling their root causes, joined the leaders, along with others including non-governmental organisations and private sector, at Number 10 Downing Street last Sunday – the closing day of the Games – to highlight a push to tackle global hunger ahead of the next Olympics to be held in Rio de Janeiro in 2016.

Long term exposure to a poor and inadequate diet and repeated infections have left 170 million children in the world suffering from stunting – a condition which stops children from fulfilling  their potential because their bodies do not grow and develop properly. The United Nation’s World Health Assembly recently agreed a new global target of a 40 percent reduction in the number of stunted children by 2025.

The ‘hunger summit’ has been inspired by a declaration by the G8 at its last summit in the US in May, where President Barack Obama announced the creation of a new alliance on food security with African leaders and the private sector as part of an effort to lift 50 million people out of poverty over the next decade. Alongside three initiatives announced by the UK at the London summit. other initiatives are underway by India, the EU, the World Food Programme and the Children’s Investment Fund Foundation to make an impact on global levels of undernutrition, according to Downing Street. The UK will take up G8 chairmanship from next year.

An article in The Guardian newspaper says that the initiative has received ‘cautious welcome’. Campaigners argue that while control rests with the larger companies, it takes away the power of small farmers to feed their people.

The article quotes the Gates’ Foundation head of agriculture, Sam Dryden, who attended the summit, acknowledging the pressure of large corporations – as well as agricultural subsidies in the West – in squeezing out smallholder farmers in Africa.

“Agriculture is a local experience, eating is a local experience,” he is quoted as saying. “It is important that African countries develop their own systems and that smallholder farmers grow the crops they want to grow.”

 

 

Congratulations Iron Maidens

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London’s 2012 Olympic Games is over and three of Beef + Lamb NZ Inc’s Iron Maidens are heading home from the 30th Olympiade laden with their medals. Congratulations to BMX cyclist Sarah Walker for her silver medal earned late last week. This added to the bronze medals earned by Rebecca Scown and Juliette Haigh for their earlier success in the women’s pairs (rowing). All of the athletes did a fabulous job and did the country – not forgetting the New Zealand beef and lamb industry – proud.

Market will cope with extra lambs

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The market should be able to cope with the expected one million more lambs this season, suggests meat industry commentator Allan Barber.

Responding to recently released figures from B+LNZ Ltd’s Economic Service Barber points out that last year’s 4.4 percent reduction led sheep numbers to an all time low and that this season saw a bounceback of 2.6 percent, largely from an increase in ewe hoggets.

“Providing adverse weather doesn’t cause larger than anticipated lamb losses, there is every reason to expect one million more lambs on the ground this season,” he suggests, adding that this will prompt the question as to whether the markets can absorb the extra lambs, given the flat state of most overseas economies and the significant amount of inventory clogging up the pipeline.

“Past experience suggests that the pipeline will free up, so buyers will hopefully start to place orders again in the not too distant future. In addition, the growth last season meant that farmers held back stock and continued to put weight on. At the same time, meat exporters failed to give the right market signals soon enough, because they had to keep prices high to secure throughput,” explains Barber.

“Assuming the law of climatic averages reasserts itself, the coming season will return to more normal conditions. Therefore, the conflicting messages of procurement and market price will not be so far out of kilter again and supply and demand will be more complementary.

“If not, we will have to pray for an outbreak of rational behaviour from producers and processors!”

Barber notes that the changing nature of land use in New Zealand can be seen from the fact that the North Island is now home to more sheep than the South Island for the first time in living memory. At the same time, the South Island, assisted by irrigation, now has 35 percent of the country’s dairy cows, “a proportion which was inconceivable 15 years ago,” he says.

 

New videos for New Zealand venison

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A new series of videos, produced for Deer Industry New Zealand, is showing British consumers how to cook New Zealand venison.Young and talented British celebrity chef Sophie Wright, a former NZ-UK Link Foundation Culinary Challenge award winner, demonstrates below how to make Venison Wellington.

Other recipes from Sophie, including Venison Ragout, Venison Pie and how to cook venison steaks perfectly, are included in the series produced by British media production company Breeze and Freeze for Deer Industry New Zealand.

All have been added to Deer Industry New Zealand’s You Tube Channel DINZVMSM, which features culinary and butchery demonstrations of New Zealand venison by executive chef Graham Brown and Michael Coughlin, amongst others.