There are so many priority issues facing the food and fibre sector today that it is no surprise the first comment at our first roundtable was, “Now, where do we start?” This year we also found that no single theme or trend stood out amongst the many sector leader conversations we had in preparing the 2022 KPMG Agribusiness Agenda.
KPMG Global Head of Agribusiness, Ian Proudfoot, says that the juxtaposition of circumstances is the narrative underpinning this first chapter of the 2022 Agenda.
For some leaders, things have never been better; others face an existential crisis, while many have aspects of their operations that are humming and other parts that are on (or are close to) life support.
This year’s Agenda tells us a story of an industry that is muddled; both opportunity-packed and risk burdened by high highs and almost as low lows. But it also tells us of an industry where each leader is busy fighting through the fatigue we wrote about in our 2021 Agenda to show the resolve and resilience necessary to identify and catch opportunities flying at them from various directions.
Subsequent to our conversations, The Ministry for Primary Industries “Situation and Outlook for Primary Industries (SOPI) Report” released last week, forecasts export revenue will climb nine per cent by June 30, 2022. Meanwhile, the long-awaited He Waka Eke Noa plan was also released, with recommendations requiring farmers to report emissions numbers, plan for greenhouse gas management, and pay for methane and long-lived gas emissions. These two reports perfectly highlight the complex yet opportunity-packed environment in which the sector currently operates.
The sector is doing a remarkable job to keep trading, keep growing and keep delivering record returns to the New Zealand economy when such returns are so desperately needed. However, the assortment of issues organisations and leaders must balance to create and capture value is increasing. For some in the sector, tension and frustration are boiling over, but the focus must be on what is controllable to catch the many opportunities inherent in the crises and challenges we face.
Deciding to focus on the factors within our control is one call we can make. Given the returns being generated across many parts of the sector, it should not be a difficult decision – because for once the cash is available to invest in the future. So where do we start? The priority should be to focus on the factors that are currently within our control, many of which are explored in this year’s Agenda:
Taking control of reconnecting with the world:
Accelerating towards the future of work:
Current labour shortages will change the way the sector works forever. The industry will face continuing competition for talent, resulting in the economics for automation of repetitive roles becoming more compelling, long-term certainty around seasonal labour programmes being critical, and the investment in future talent pipeline into schools and universities more urgent than ever.
Capturing the unique opportunity in decarbonisation:
Unlike other sectors of the economy, which at best can aspire to net zero, the food and fibre sector has the potential to be climate positive. This requires urgent focus on practical steps to accelerate along the decarbonisation pathway, including pricing incentives to encourage these steps to be taken faster
We have demonstrated our ability to collaborate effectively in a crisis during the last two years. It’s time to bring that same mindset to solving the problems communities and consumers will face in the future. A crucial part of this is partnering with Māori more profoundly, bringing openness to different ways of doing things than the way they have always been done.
Bold steps now to benefit future generations:
Steps are needed to ensure the sector thrives into the future. These include initiating a national discussion around the use of biotechnology, exploring the opportunities inherent in our oceans, investing in water infrastructure, creating an industry data exchange platform, and building a globally relevant bioproducts sector.
A food system that works for all New Zealanders:
We have two food systems in New Zealand; a world-class export system and a domestic system that has demonstrated its frailties over the last two years.
We need different business models to lift the resilience of domestic food producers. A failure to provide accessible, quality, nutritious food to all New Zealanders will ultimately impact our ability to continue to generate the export returns we enjoy today.
With the world changing so rapidly, we have taken this opportunity to update the priority statements in the survey to ensure they remain relevant to the world we live in today.
The overall average priority score fell just under 1% to 7.07 out of 10.
World-class Biosecurity has again taken the overall #1 spot with no change in the top 3 priorities from 2021, with signing high-quality trade agreements and delivering broadband equality to all, again taking #2 and #3 respectively.
The most significant increase in a priority, 9.86%, was recorded for restricting foreign land and agribusiness ownership, despite which, it remains the lowest-ranked priority. The biggest fall was recorded by digital investment to drive improved internal and external outcomes. The priority which recorded the same score in 2021 and 2022 was accelerating initiatives to transition to a net-zero future (ranked #7 this year compared to #6 last year).
The survey included five new priority statements this year. The highest-ranked of these , with an overall rank of #12 (and making the Top 10 of three of our demographic cohorts), is related to seeking out and developing partnerships with organisations that bring a diversity of thought, knowledge and action to the food and fibre sector.