Technology radically affecting New Zealand farming

Technology radically affecting NZ farming

New Zealand is facing its biggest economic challenge ever as technology and world food trends move towards a farming future that may not involve animals - or only minimal numbers of animals - according to Ian Proudfoot, KPMG's global head of agribusiness.

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Global Head of Agribusiness, Partner - Audit

KPMG in New Zealand

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Food technology is moving so fast, he says, New Zealand's primary industries could become irrelevant unless the agribusiness industry moves just as fast.

Faced with a world where a burgeoning population will soon hit 9 billion (in 2050, compared to 7 billion now), the planet's food stocks will be under further pressure with livestock farmers unable to meet the demand for protein.

At the heart of change is new technology like the cultured beef being developed by Dutch professor Mark Post - where stem cells are harvested from a cow and then fed in a controlled environment so they grow into a cultured beef protein.

Less than 10 years away from being sold in supermarkets, the cultured beef could ease world hunger and supply problems while being a natural, healthy product. Post estimates cultured meat, including cultured steak, may make livestock farming largely redundant in 25 years - and will allow the total number of beef cattle worldwide to be reduced from 1.5 billion to about 30,000.

"Given they expect to be able to do the same with pork, chicken, fish and other proteins, this is a burning platform for New Zealand," says Proudfoot. "Unless we work out how our natural produce fits into a market dominated with cheap, consistent, environmentally-friendly cultured meat, it is not difficult to create a scenario where we no longer grow meat in 30 years.

"At the same time you can equally draw a scenario were our naturally grown, grass-fed, hormone-free beef delivers a unique, luxury experience and becomes our largest export product.

"There are many other examples of technology-driven change, he says. Plant-based eggs have already been developed as has a drink, Soylent, which, taken three times a day, contains all the nutrition needed by an adult human being. New Zealand's dairy industry could soon be challenged by an insect-based protein powder which provides a more environmentally-friendly form of protein.

"Unfortunately, I don't think New Zealand has sufficient insight into the speed at which the world is changing," Proudfoot says. "If we don't get abreast of these trends, we risk being left behind, becoming a much poorer country.

"Venture capitalists had already poured $9.8 billion into nearly 800 agribusiness companies in 44 countries around the world since 2005 - "an amazing figure and all designed to develop new technology to solve the world's food problem. This is happening not just because there is money to be made but because they have a social goal too; there are still nearly 10,000 kids dying from malnutrition globally every day.

"But investors often find an industry focused only on getting products to market, Proudfoot says, with little or no consideration of what consumers really want or need.

One certain trend was food as a health product; legal restrictions affecting tobacco and alcohol seem certain to be followed by legislation affecting use of sugar, fat and salt.

"This is on the way around the world; food will become critical to health outcomes. We cannot afford to keep making people better - we need to stop them from getting sick; food plays a huge role in that.

"This is vital for New Zealand - we are the only developed country in the world that relies on agriculture to pay for our schools, roads and hospitals. We need to be further ahead and on the edge of innovation. If not, we will pay."

Possible changes for the future may include

  • A NZ Agri Innovation Capital Fund to drive technology advances and ownership positions
  • Re-inventing specific food products as key solutions for specific groups - like the elderly 
  • Urban consumers more reliant on healthy food that can be eaten 'on the go' 
  • 3-D printed foods, algae and insects to enter diets
  • Traditional farms will evolve - maybe into under-sea greenhouses, supermarket rooftops, floating aquaponics barges or multi-storey vertical farms in urban areas.

The focus on consumers was echoed by a call to enter the minds of the consumers of 2035 by a think-tank of emerging agribusiness leaders tapped by KPMG.

The KPMG Agribusiness Agenda 2015: Emerging Leaders Edition sprang from young people nominated as likely leaders of the future from school and university students, horticulturalists, industry groups, government ministries, farmers, producer boards, wine growers, technology and R&D companies, fishing companies, banks, iwi and many more.

"In 2035, we will produce what the consumer needs, how they need it, when they need it," says Justine Fitzmaurice of KPMG's Advisory team, one of the authors of the Agenda with Julia Jones, of the Farm Enterprise practice. "We will grow more, waste less, ensure greater sustainability, and integrate commercial benefit with social gain."

"The emerging leaders told us we shouldn't wait to find out what consumers tell us they want. They want to change the system of coming up with a product and enticing consumers to buy it - instead giving them what they already want."

See presentations from the symposium: Here

Agribusiness Agenda 2015, Volume 2 – Emerging leaders

Agribusiness Agenda 2015, Volume 2 – Emerging leaders

Agribusiness Agenda 2015 volume 2, found the lack of collaboration between industry players is a concern for primary sector’s emerging leaders.

Originally published in the NZ Herald.

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