The New Zealand government has an ambitious target of doubling the value of exports by 2025. To achieve this, the export value will need to grow between 5.5% and 7.5% per annum from 2016 to 2025.
There are a number of ways in which we can do this: increase the volume of export products, increase the value of export products, develop totally new export categories, and of course, a combination of all three.
Given that agricultural exports make up 50% of our export earnings and 12% of our total GDP, we would expect that much of this vision has to centre around food production. And certainly, on this front, the Primary Industry Minister Nathan Guy is putting out the challenge to agribusiness people around the country to work out just how we might achieve these targets.
In line with all this, last week I attended a forum in Invercargill on agri-governance (run by the Otago Southland Institute of Directors).
The panellists covered a range of themes but one topic came up a lot; that of the changing face of farm ownership.
We have seen big changes in recent times, particularly in the dairy industry as more off-farm investors become part-owners of farming enterprises.
One of the speakers, Kevin Cooney from ASB, believes that the role of equity partnerships and investors will become even greater in the next 10 years with the advent of a ‘professional farming class’, essentially people who manage and run such operations but have little or no ownership stake.
Interestingly, he also commented that to achieve the government’s 2025 vision of the export double, $160-200 billion of new capital is needed in our agricultural system in order to drive new value from our farming enterprises.
If this money increasingly comes from investors, rather than banks, as Mr Cooney predicts, then the farm ownership landscape may change faster than we think.
Currently, in the United States, only about 40% of farms are actually owned and run by families. Many farms are still family-owned but are leased to professional farming organisations. Could this be where New Zealand farm ownership is heading?
Thinking about all this and reflecting on how we will keep pace with developments and also share in the direction of what lies ahead, I am struck again with something that is blindingly obvious to those of us in the industry but not so obvious to parents, teachers, and young people outside of agriculture.
To have even a remote chance of growing the value and volume of agricultural export products, we need young people to enter our industry in droves.
Many people say we need the best and brightest in agriculture, and yes we do need them but we also need the practical kids, the ambitious kids, the thoughtful kids, and the plodders…we need them all.
So my challenge to the government is sure, we in the industry will do all we can to increase the volume and value of products on farms and in our agri-companies, but to do all this well, please support us by incentivising young people to enter an agricultural career pathway.
We don’t want the odd one or two as we are getting now; we want Jack, Jill, Johan, and Qiáng. We want the budding mathematicians, teachers, engineers, entrepreneurs, and mechanics.
Agriculture is about food production, something the world needs a lot more of. It is the backbone of our economy and will remain so in the future.
Help us make agricultural careers an attractive proposition for our young people and we will do all that we can to reach the export double.