Supply Chain & Innovation

The Issue

The New Zealand agricultural system focuses heavily on a global export market. We have positioned ourselves as a significant player in the export of dairy products, meat, forestry products, fresh produce, and wine and have established strong global relationships and trade deals.These relationships must be maintained and developed. However, in this time of increasing global instability we must also consider local food security and supply chain resilience. Raw resources are running out, and in many places our infrastructure (for example, ports) are in the process of decay and face accelerating threats from climate change and social disruptions. The global economy is shifting and we have to adapt to ensure New Zealand restructures its own market and material flows.

This is a global issue that has local relevance. New Zealand's agricultural products account for nearly 80% of our exports24. Kiwis are proud of this and proud of our farmers who significantly bolster our economy and sell great products to the world. However, there are several signs that our “farm to gate” commodity approach to agriculture has let down farmers and our environment. For example, although New Zealand was largely built on the back of strong wool, today this commodity is mostly burnt or buried by farmers, costing more to shear than it is worth. The global shift to synthetics in carpet and fabric is costing New Zealand sheep farmers and the environment dearly. Putting a price on petroleum fibre sales in New Zealand and building wool processing infrastructure in New Zealand are both ways to fix this.

Our current supply chains are often long, convoluted and fractured, with farmers getting the smallest part of the margin. We must embrace innovative solutions for our economy when it comes to supply and trade within agriculture. Our focus on international markets does assist with global food security and adds value to the New Zealand economy. However, it does not contribute significantly to local food security and can lead to high domestic food prices, making it difficult for some kiwi to put healthy food on their plates. We need to have a conversation on the role New Zealand plays in global food security.

 

The Vision

Key Recommendations

Our initial key recommendations for how to reach this vision for the industry’s supply chains and innovation are:

  • Wool import tariffs are removed globally.

  • Petroleum fibre sales in New Zealand are taxed.

  • Bring wool processing infrastructure to New Zealand.

  • Government investment and public incentives should be given for circular economy solutions.

  • In the case of New Zealand revisiting the GE discussion, the conversation must be informed by the latest science.