Svein Holsether, the CEO of Yara International, the USD12Bn nutrient company with 17,000 staff in 60 countries, said since the Russian invasion of Ukraine, “For me, it’s not whether we are moving into a global food crisis, but how large the crisis will be”.
David Beasley, head of the World Food Programme, has warned the conflict in Ukraine could send global food prices soaring, with especially catastrophic impact on the world’s poorest.
During a recent call with Brendan O’Connell and I, Padraig Hennessy, Chair of Agtech Ireland said in his conversations with the Irish government, there is talk of food and fuel rationing not heard of since WWII.
With these ‘tectonic plate’ shifts in geopolitical forces, how is this going to affect the New Zealand primary sector and the agritech sector that serves it?
AgriTechNZ and its members focus largely at the beginning of the food chain – the literal food chain – where farmers and growers use agricultural technologies to increase yields, save labour, improve efficiency, reduce pollution, save fuel, preserve foodstuffs, all to improve sustainable profitable productivity.
At the other end of the food chain, Eat New Zealand works to encourage Kiwis to enjoy more of the quality food available in our country. The CEO of Eat New Zealand, Angela Clifford, makes the observation that growers of millers’ grain get paid no more for grain for human consumption than for animal consumption.
With whatever degree of abstraction one looks at it – close up at a single horticulture farmer growing fresh produce for a local restaurant or a major processor buying from thousands of farms – we are in for a massive degree of disruption. Observers have rightly noted that the European Union has made more progress in 10 days than in the previous 10 years in certain aspects in response to the war in Ukraine.
So what can we do in the agritech sector in New Zealand to embrace these changes and move rapidly to build a better primary sector?
1. Greater focus on the companies in New Zealand that have the resources, balance sheets, product experience and most importantly, their existing successful customer bases, to expand offshore. Of course we need startups, but the engine of economic growth in our agritech sector will come at pace and scale from our established mid-cap Agritech companies.
2. Greater alignment between central and regional Governments with industry. We have already achieved many successes through the Agritech Industry Transformation Plan (ITP) over the last couple of years, but let’s see how we can double the output in half the time to keep pace with the accelerated rate of change.
3. Support farmers with their digital adoption. AgriTechNZ has recently completed the research phase of a substantial project to understand New Zealand farmers’ adoption and value extraction of technology. The next phase is the analysis, publication and implementation of the insights gained from this project.
4. Keep a global perspective. The physical coastline of Aotearoa New Zealand is irrelevant in a digital world, so focusing inward on domestic technologies without due appreciation of global trends is risky. Think how the local taxi industry has been disrupted by technology from San Francisco!
With these and other drivers in mind, our agritech sector can succeed – but how agile we are will correlate with how successful we are?