By Alison Stewart, Dr Stewart is CEO of the Foundation for Arable Research.
New Zealand arable growers face many similar challenges to other ag sectors – burgeoning interest rates, increasing input costs and weak contract prices.
We also have our own, sector-specific challenges such as the recent oversupply of grass seed and maize grain and silage, as well as increasing biosecurity threats, agrichemical resistance issues and environmental compliance costs.
One might be forgiven for thinking that the situation is dire. But it’s not – the arable sector has a number of positive things going in its favour.
Firstly, the diversity of arable farming systems provides a level of resilience to market and environmental extremes that many monoculture-based sectors don’t have. The ability of arable growers to bounce back after Cyclone Gabrielle and other extreme weather events is testament to that.
Secondly, the integration of diverse cropping rotations and livestock provides the exemplar of what “regenerative farming” espouses. We just need to work out how to extract value from this situation.
And thirdly, if we are to believe the hype around plant proteins, we could be in a position to take advantage of a number of new crop/ product/ market opportunities.
But none of this will come to fruition if we cannot get other sectors to come on the journey with us.
For example, dairy farming has a challenging environmental footprint that arable could help to alleviate. Integrating home-grown grain and silage into the dairy platform has numerous well-documented benefits, yet the dairy industry struggles to move away from its “grass fed” mantra; even though it could tell an even more compelling story targeting 100% New Zealand origin, improved animal health, and sustainability.
Poultry could do the same. Surely using home-grown feed is a better selling point than importing overseas soy meal, maize grain and PKE?
Despite the obvious links between NZ’s many primary sectors, there is an apparent inability to plan and work together to ensure that growth opportunities for one sector don’t negatively impact others.
The plant protein space is a classic example. I am tired of reading reports about how developing a plant protein industry in NZ will help address the negative environmental impacts of livestock farming and add value to cropping farmers.
Land-use change away from livestock will not help arable farmers, firstly because the livestock sectors are our biggest markets, and secondly because food processors want plant protein crops at commodity prices.
Where is the value to arable in reduced markets and commodity prices? Plant protein crops will only be viable in NZ if they attract a premium based on their provenance, sustainability credentials and/or unique selling proposition and I haven’t seen, as yet, any strong evidence for any of these factors.
Mixed cropping/livestock farming systems do have potential to mitigate many of the challenges facing agriculture in NZ, so we need our livestock, arable, vegetable and forestry sectors to start working together to develop them. History has shown that working in silos will create all sorts of unintended consequences.
Encouraging a home-grown approach to food marketing seems another potential solution, but unfortunately, NZ consumers don’t seem to care as much as overseas consumers do about buying local. While some customer segments will go out of their way to access local produce and may be prepared to pay a very small premium, it is nothing like the situation you see in Australia, the United States, the United Kingdom and Europe where “buying local” is absolutely on trend.
Market research suggests that price is still the driver for consumer behavior in NZ and so we will continue to struggle to compete with imported produce whose pricing is influenced by efficiencies of scale, cheaper labour and, dare I say it, in some cases, lower production standards.
NZ needs to recognize that having free trade agreements with other countries doesn’t mean that it can’t support, facilitate and promote the production and purchase of home-grown food. Food security is a legitimate justification used by many countries to support their food producers, so where are NZ’s policies on protecting the production of grain, milk, meat and fresh fruit and vegetables?
If the government provided incentives (not subsidies) to improve existing food supply chains or create new food production systems, this would most certainly enhance the future sustainability of arable and vegetable production in NZ. If NZ consumers preferentially bought locally produced bread and were prepared to pay an extra 10 cents on a $3 loaf, with three cents of that going back to the grower, this would make a huge difference to the profitability of growing wheat in NZ and make the food supply chain secure.
So, coming back to the title question: do I believe that arable will still exist in 2050? Yes, I do, but probably in two forms. There will still be farms in the main grain growing areas of the South Island that are truly “arable”, but they will be fewer in number and larger in size to create the efficiencies of scale needed to maintain profitability.
And then there will be a multitude of small, medium and large mixed farming systems across the country of which grains and seeds will form a component to a greater or lesser extent.
At that point, are these still called arable farms? Possibly not. But does it really matter if it involves growing arable crops in a profitable and sustainable way?
