A new comprehensive review surveying the whole primary sector comes to the unsurprising conclusion that climate change is the biggest issue facing agribusiness. But ideas for practical application are thin

The Matrix of Drivers: 2022 Update report by the Agribusiness & Economics Research Unit at Lincoln University, funded by the Our Land and Water (OLW) National Science Challenge, presents a summary of the key changes and trends likely to affect land use in New Zealand.

The purpose of the report is to inform OLW whose mission is to “enhance primary sector production and productivity while maintaining and improving our land and water quality for future generations.” It lists 35 challenges which have been prioritised by primary sector experts and the winner is – wait for it – climate change with a significant gap back to GHG emissions, condition of the environment and water quality. The report lists the other 30 in their finishing order, rather like a horse race.

AERU invited 2,818 sector experts, including agri-sector leaders, policymakers, and academics, to participate, received 622 responses and 251 completed questionnaires which at less than 10% of the original sample base is probably par for the course. The survey results were also analysed to reflect the views of those who professed to be very knowledgeable or knowledgeable about food exports i.e., mostly those working in the primary sector who comprised 30% of the respondents.

The research undertaken is very thorough, as it includes 1,500 international and domestic sources of information selected by an academic literature review process, covering central and regional government strategic and regulatory, primary sector group and farmer association documents, as well as international agency reports and academic literature.

The research also includes 83 international consumer preference studies which suggest attributes for which consumers are prepared to pay a premium, such as organic certification, although experience has shown consumers are less willing than they profess to pay a premium when it comes to the point of purchase. It also proposes less reliable areas of added value like regenerative agricultural production where product differentiation and consumer benefits are harder to prove.

Responses to domestic, as distinct from international, drivers of change differ slightly with water quality being seen as a more important issue than climate change, followed by the environment, agricultural policy and GHG emissions. Other issues to increase significantly in importance since the previous report in 2019 are extreme weather events, Māori values, cultural values and soil quality, while product attributes that are seen as earning greater returns from lower production include high quality, low environmental impact, food safety, and low carbon footprint.

The report identifies eight main categories of future trends and challenges that the research team see as having high potential to affect New Zealand land use change in the next few years: climate change, New Zealand’s environmental policy, Covid-19, global trends and challenges, emerging technologies, innovative products and new food technologies, international trading environment, and consumer trends.

Unsurprisingly extreme weather events, the launch of the Global Methane Pledge, COP26 commitments, and the introduction of GHG targets are all seen as heightening the challenge of adapting land use to cope with climate change. This will be further exacerbated by environmental policy, including freshwater management and Council designation of Significant Natural Areas on private land. The continued impact of Covid-19 on supply chains and labour supply is mentioned as a challenge, but the resilience of the primary sector and potential supply chain adjustment to logistical disruptions will undoubtedly reduce the likely impact on future land use.

The volatility of commodity prices and inflationary uncertainty are mentioned as continuing challenges, as well as the handling of food waste, although population growth is regarded as likely to drive the growth of protein consumption. Logically the report considers the emergence of new technology, such as electric farm vehicles, blockchain, autonomous and robotic systems, precision agriculture, GHG mitigation technologies, gene edited crops (New Zealand’s objection to GM is noted as an obstacle), and regenerative agriculture as trends that will encourage changes of land use and presumably farming operations.

Innovative products and new food products, such as alternative proteins and cellular production, combined with changing consumer tastes – less meat consumption, online shopping, desire for proof of sustainability, cultural values, and provenance – are also expected to land use change, although this is somewhat at odds with the predicted growth in traditional protein consumption.

The report notes that a 2018 study estimated 1.74 million hectares in New Zealand as being suitable for growing plant protein crops which surprisingly represents about 13% of the farmed total, three times as much as is currently in arable and horticultural production. This would presumably come from existing pastoral land. However the present legislation which encourages carbon farming is far more likely to drive land use change than a sudden upsurge in alternative proteins.

The international trading environment, incorporating new trade agreements and geopolitical tensions, will also present challenges, although New Zealand’s trading relationships and adaptability will minimise any sudden disruption of the farming sector and land use. The report’s authors assess all the trade agreements which New Zealand already has in place or is negotiating, but realistically the biggest impact to land use would arise if one of our largest markets were to be closed to imports from here for any reason. The present level of dependence on China for a large proportion of agricultural exports makes New Zealand sensitive to any political fallout from a dispute between the world’s great powers.

This is a very detailed and well researched report, although it leaves me with an irresistible impression of a document produced by academics and scientists for academics and scientists, rather than for farmers, processors and exporters operating in the real world. It will be interesting to look back in 15 years’ time to see who was right.

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