Globalisation-not as we know it
I'm not trying to gun for a political career
Government has always been a vague irritation to me, much like my younger brother while growing up (sorry Tom). The good things about Government, hospitals, schools and swimming pools, I take for granted. The not so good things, GST, income tax and politicians are a bit like flies, buzzing into my vision where I try and ignore them until they land on me and I just have to do something.
It has taken a long time, but I am starting to grow up. Part of my new-found maturity brings a new lens with which I view Government-believe me- I am not gunning for a political career here. In fact, the new lens has been brought about by mega-international trends that Government and New Zealand businesses need to come to grips with in order to survive and prosper.
When the term “globalisation” was first touted, we all had a wonderfully naive belief that trade would become “free for all”, protectionism would disappear and our farmers would reap the benefits. We limped along sending our produce off to who would buy it and riding the ups and downs of commodity prices and the New Zealand dollar. To change this, on the back of the global financial crisis, something major happened which we didn’t hear so much about living in the “land of bounty” as we do. In 2008, global food supplies dropped to an all-time low, some reports saying to as low as 3-6 months of world supply. An enormous spike in food prices resulted and it was “game on” for Governments and food producers.
Food trade- truly global issue
On top of global food shortages, add the complex web with which global food trade has become and we are in for an exciting ride. Tesco’s horsemeat scandal, described by The Guardian as the biggest food scandal in the 21st Century, illustrated that this is a truly global issue, not Asian-centric as many believe. The horsemeat supply web stretched to include 10 countries.
Complex food supply chains and food price volatility has meant very powerful Governments are now involved in both protecting their trade and improving their own food production systems. As a result, the nature of globalisation has changed. In Mary Shelman’s view, a Director at Harvard Agribusiness, the thinking around globalisation of food products has moved from a “free for all” model to a “relationship model”. This means global food companies who grow their profitability will do so via long term, win-win business and government relationships.
Government and business partnership crucial
For the first time last year, our largest export market was China, ahead of Australia. China will rapidly absorb any food we can produce and as they work to produce more of their own food, they will also look to absorb our practical and technical farming know-how. The role the New Zealand Government can play in supporting growing New Zealand businesses in China is vital, especially given the credibility of our Government with our strong history of trade negotiations-we were the first developed country to sign a Free Trade Agreement with China.
Are we ready to maximise these opportunities? Being ready has to happen at both Government and business levels. Many times I have sensed from Government circles a dislike and suspicion towards business. After all, we are motivated by money and that translates to greed-doesn’t it? In my view the vast majority of businesses in New Zealand are small or medium in size and corporate greed, as we have seen in large US companies, is mostly absent. The mantra for small business is pay your employees, pay your rent, put most of everything else into growing the business and take what is left home (and sometimes that is not so much).
Somehow Government and business need to work together, yet still retain the integrity and fundamentals of what both represent. Government cannot simply endorse various businesses and risk the fall-back if those businesses fail or misrepresent New Zealand’s integrity. What is required are true partnerships between Government and business, not just rhetoric. Each of us needs to work harder at understanding and valuing where the other comes from and meeting in the middle, for everyone’s benefit.
My wonderful little brother is no longer an annoyance, he has grown up into a great father and great person. We all change, the world changes, relationships change and we need to be open to that change to move together as a country of food exporters.