New Zealand Budget 2013 - PwC

Grabbing the opportunitiesfor agribusinessNew Zealanders have a forced humility on most subjects. It takes‘something special’ for the average Kiwi to escape these shacklesand claim any degree of above-averageness; the All Blacks’dominance is one such ‘something special’, another is our abilityto efficiently create safe protein from grass and water.The growing demand for our agri-exportscontinues to inflate our collective chests. Yet, it’sstill a deflating and much-maligned fact that theestablished export models fail to capture much ofthe value generated by our expertise.Promisingly, a number of trends are emerging inthe domestic sector which should increase theeconomic benefits generated by the agribusinesssector for NZ Inc.The Government should be commended for theirongoing successes in improving access to growingmarkets, and their support and endorsement ofvarious initiatives to adopt innovative businessmodels.In Budget 2013, this is represented by a $79mappropriation (2012 - $38m) for the PrimaryGrowth Partnership - an initiative targeted atprimary, food and forestry sector investmentin education development, research anddevelopment, commercialisation, marketdevelopment and technology transfer.Emerging marketsBear with us while we offer the compulsory listof emerging market trends; economies suchas East and South-East Asia are experiencingrising incomes, greater nourishment, and a slow‘westernisation’ of their diet which sees meat anddairy taking a more prominent place.They are also making the transition in priority fromfood security to food safety. Tremendous increasesin food supply have taken place while food safetymeasures have been neglected. All these trends areof course to the benefit of New Zealand – a trustedsource of animal protein.Closer export relationshipsExport volumes to these regions have shown sharpgrowth in recent years, contributing to China’sfresh status as our number one export destination.Pleasingly, we are seeing the emergence ofintelligent supply chain solutions that shouldmaximise the return to NZ Inc from these exportvolumes while upholding the integrity of the NewZealand brand.The status quo model for most of our food exportsis for the product to arrive at port, at which pointa range of intermediaries assume responsibilityfor market access. This is problematic in that theintermediaries are able to capture a significantportion of the value chain and more sinisterly, areable to compromise the product itself by mixing theNew Zealand output with cheaper domestic inputs.Increasingagriculturalproduction andandproductivityFacilitating tradeand and developingfood marketsfood Enhancing foodsafety and qualityEnsuringsustainableecosystems basedmanagement17