Covid-19 continues to throw up challenges for New Zealand’s businesses, but the pandemic is not the agriculture sector’s only concern.
Climate change, government regulation, skills shortages and the mental wellbeing of staff are all important issues which require constant managing, leaders in the industry say.
Sheep milk producer Spring Sheep Milk
Spring Sheep Milk chief executive Nick Hammond says a key consideration for the New Zealand agricultural sector is how it responds to increasing environmental regulation.
Regulation is putting pressure on farmers and will probably intensify in the coming years, he says.
Farmers are willing to adopt models with a lower environmental impact if presented with the systems.
Spring Sheep Milk is classified as an essential business and has had limited disruption from the recent outbreak. It is prioritising staff health and wellbeing, with a focus on both physical and mental health, he says.
It found the Ministry for Primary Industries to be highly supportive throughout the most recent lockdown. The ministry contacted the company at the start of lockdown and created a forum where it could get regular updates and share any challenges post each announcement, he says.
“This enabled us to be responsive to any upcoming changes and transparent with our teams.”
A clear recovery plan will be valuable to the industry and will be particularly important as the country reaches high vaccination rates and begins to re-engage with the world, he says.
Honey business Comvita
Comvita chief executive David Banfield says the economic outlook for the agriculture sector is positive.
But the sector needs to focus on reducing its carbon and water footprint and stop using herbicides and pesticides.
“Progressive policy in these areas will allow the industry to improve standards and future-proof returns,” Banfield says.
An immediate threat for Comvita is not being able to connect in person with its global teams or attract skilled labour to New Zealand to meet market demands.
“I also fear for the mental health of our teams as they try to manage their way through these periods both personally and professionally.”
It was increasing communication across with staff and encouraging people to share their feelings. It also sends out care packs to the team on a monthly basis and offers confidential external support, he says.
Comvita has started an apprentice programme in its apiaries to help develop homegrown talent, and is investing in its existing workforce.
“One of the core competencies we require in certain roles however, is an appreciation of and practical experience working internationally which is naturally difficult at this time.”
New Zealand’s response to the Delta outbreak has been robust and immediate which is positive, he says.
However, it felt inevitable that Delta would arrive, and the country was not ready, with low vaccination rates and reduced scanning in, he says.
Comvita was prepared for a lockdown so from an operational level, the impact was minimal.
Exports are crucial to New Zealand’s long-term economic health, but borders need to be open to trade effectively, he says.
“We need a timetable to reopen and clearly communicate to all that vaccination is the only long-term solution.
“If individuals choose not to vaccinate that is their choice, however they should not be able to travel internationally, nor occupy certain roles.”
He does not believe that elimination is a long-term solution for New Zealand.
“New Zealand positioned itself incredibly well through the crisis, now it’s crucial that we win next phase to open up to the world and show how agile and adaptive we are.”
He says the narrative around New Zealand’s Covid-19 response needs to start focusing on how prepared the country is for reopening.
There also needs to be more clarity on what impact Covid-19-related decisions are having on indicators such as domestic violence, suicide and poverty statistics, he says.
Kiwifruit company Zespri
Zespri chief executive Dan Mathieson says demand for its kiwifruit is high but the cost and challenges of meeting that demand are growing significantly.
“Many of the challenges have accelerated from the pandemic, but we can emerge stronger over the medium term if we choose to respond in the right way,” Mathieson says.
There is increased demand for healthier, more sustainable food and products with high levels of vitamin C, he says.
“That’s positive for smaller categories like berries, avocados and kiwifruit which represent new age fruits with strong health properties and which are seen as high value foods.”
The most significant challenge facing Zespri is a labour shortage.
The kiwifruit industry is expected to face a shortage of around 6500 people next season, he says. Zespri is also expecting a larger crop given more orchards are coming into production.
The shortage is the result of a lack of backpackers in New Zealand who, alongside recognised seasonal employer (RSE) workers, make up about 40 per cent of its seasonal workforce.
Zespri is working to attract more people into the industry, and to invest in automation to make the supply chain more efficient.
It appreciated the Government’s engagement on the challenges associated with securing labour, he says.
“While quarantine-free travel for RSE workers is a positive step, the worker shortage will remain a real challenge.”
There are also the challenges with disruptions to global shipping channels, added freight costs and costs associated with increasing compliance and regulatory and market access requirements.
The pandemic has also brought into focus farming and grower practices and the primary industries’ response to climate change, he says.
“That desire for more sustainable practices will remain a long-term consumer focus, and it will be important New Zealand’s primary industries continue to illustrate their commitment towards this so they can hold their social licence to operate.”
Zespri takes the response to Covid-19 “incredibly seriously”, he says.
“We’ll continue to follow the Government’s requirements and enhanced hygiene practices under all alert levels to help protect the wider industry and the communities in which we operate, and to encourage our people to get vaccinated.”
It supported a clear outline for how and when New Zealand will begin reconnecting to the world and border restrictions will be eased.
As an industry it is considering a range of operational changes in 2022 including more flexible work conditions, investing in automation and looking at how current processes can be refined to help flatten the seasonal demand for people and higher wages.
ASB general manager rural Ben Speedy:
ASB general manager rural Ben Speedy says climate change is one of the most critical issues facing the economy and communities.
“When speaking to customers it’s clear the appetite is there; the drive to be on the right side of history is in Kiwis’ DNA,” Speedy says.
It can be seen in demand for the bank’s environmental loans, which are low-interest and targeted to help fund on-farm environmental improvements, he says.
Besides legislative changes affecting the rural sector, there is also a changing tide of customer expectations when it comes to both environmental and financial sustainability, he says.
“Being green can offer challenges, but it’s also a key opportunity for our primary sector.”
Other challenges in the industry include labour shortages, succession planning and rising input costs.
“The labour crisis continues to be a significant issue, so anything that will help mitigate this would be welcome.”
While the pending availability of RSE workers will be helpful for the horticulture sector, pastoral farmers’ confidence to grow continues to be tempered by availability of labour and limited automation options, he says.
“As a result, many farmers are scaling operations back, and while this is potentially positive in the short term, it will have a negative impact on the economic prosperity of New Zealand in the longer term.”
Rising input costs were limiting available cashflow for reinvestment back into businesses which was required to meet increased standards to farm in New Zealand.
Supply chain constraints were also increasing input costs and disrupting the ability to get product to market.
The lack of international travel will have a negative impact on New Zealand’s ability to build its brand in international markets and command a premium for products, especially as the agriculture industry moves away from commodities and into higher value products, he says.
Some practical ways the Government can better support New Zealand’s agriculture sector include supporting the development of new industries which enable farmers to repurpose land use, for example, to plant-based proteins, he says.
Also, supporting investment in automation equipment would help, so farmers don’t carry the cost of expensive early-stage automation beyond the life of the asset.
Read More:Covid-19 one of many challenges, business leaders say