Thursday, December 7, 2023

Agritech boosting global grunt

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More horsepower behind New Zealand’s agritech sector is the biggest hope for industry players following the launch of a transformation plan by Agriculture Minister Damien O’Connor and Economic Development Minister Phil Twyford.
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The plan is the first of several intended to boost investment and resilience of key sectors identified for their contributions and potential in the economy. 

Other sectors include construction, food and beverages and forestry.

The agritech plan represents a rare alignment of six government departments and has been acknowledged for offering a clear path to grow the $1.5 billion sector. Destined for release in April, Covid-19 delayed the launch and forced a review of the strategy.

“Covid-19 reinforced the need to lift productivity and support industries where NZ has a competitive advantage and support,” Twyford said.

The plan identifies three high-impact projects to be actioned quickly. 

They are the establishment of a horticultural robotics institute, leveraging off the skills and talent at Waikato University and Robotics-Plus in Tauranga, the Farm 2050 initiative to identify and support disruptive technology capable of dealing with nutrient issues in agriculture and the creation of a specialist agritech venture capital fund.

Twyford noted the theme of picking winners through plans has not be de rigueur since the 1980s.

“But in the decades that have followed the world’s top-performing economic successes in increased productivity tell us we need to rethink this old orthodoxy,” he said. 

Israel has an agritech sector valued at almost 10 times NZ’s, after receiving focused government support.

The Government working hand in glove with the commercial and science communities will ensure greater success, subject to high-quality engagement, he said.

O’Connor said the plan links strongly to Te Taiao, aimed at increasing the primary sector’s value over volume with a lower and more sustainable footprint.

Agritech NZ executive director Peter Wren-Hilton said the NZ market for some of the agritech developed recently is simply too small to make it commercially viable so getting it to a wider world is critical for commercial success. 

One example he cited was an asparagus picker developed by Waikato University that has only four or five potential customers here but significant numbers of large-scale ones in United States.

“But the world is also watching NZ right now and not just in how we have managed covid-19. 

“The likes of United Kingdom and Singapore are looking at this NZ model for agritech and how we have got together to create a plan and want to develop their own collaborations.”

It is critical an industry reference group is alongside each of the three main projects to ensure delivery, he said.

Rezare Systems managing director Andrew Cooke praised the plan’s intent but cautioned it also requires a better understanding of agritech adoption in NZ by farmers.

“It is not always about monetary value and if the reasons farmers adopt agritech can be better understood then it needs to be well communicated to agritech companies.”

Farm data sharing is also important and having data standards might bring only relatively small savings across the industry but it offers huge gains for the agritech sector being able to access it more easily.

“It is important to be able to speed up that gap between concept and launch. The days of an inventor working away in their shed before presenting a product that requires funding are over – time frames are much tighter and often a pitch for funds will only be with a basic prototype, with earlier funding moving it through to final launch quicker.”

Despite millions being invested in agritech by large overseas companies globally, the value of NZ’s agri-tech exports has tended to hover between $1.1 billion and $1.2b over the past five years. 

A focus on pasture production, domestic use and a disconnect between research and development and marketing commercial technology were identified as shortcomings.

Capital shortage has also been an issue and the proposed fund will be spun off separate to the $300 million venture capital fund established in last year’s Budget. 

It is hoped with interest from private parties the fund can address the gap in early stage funding NZ agri-tech companies face.

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