Adopting the open-minded Antipodean approach
OPINION:The Food Harvest 2020 mantra is “smart, green growth”, but what would an innovation-driven sector look like? As far as Ireland’s dairy sector is concerned, we could look to New Zealand for some insights.
Like Ireland, New Zealand has an export-driven dairy business whose competitive advantage is the ability to produce milk cost-effectively off grass. With milk quotas set to be abolished in Europe in the next few years, our interest in what our New Zealand counterparts are doing has intensified as we look to expand Irish milk production by 50 per cent.
For nearly 30 years, Irish farmers have looked on in envy as New Zealand expanded milk production in a quota-free scenario. If the Irish dairy sector had continued to grow at its pre-quota rate over this period, it would now be processing about 19 billion litres of milk – about the current New Zealand level of production.
What can we learn from New Zealand?
At a macro level, it’s refreshing to see such a strong level of support for its natural resource industries (mainly dairy and tourism) from the highest levels of government. There is a palpable sense that these sectors are the bedrock of national prosperity. It is only comparatively recently that a similar appreciation is apparent in Ireland.
New Zealand is staking its recovery from the current recession on export-led primary-based production.
Given our recent economic woes, Ireland too is looking to its primary agricultural sector, with its strong export earnings and significant contribution to jobs. Innovation and greater adoption of technologies at farm level and in the processing sector, as with New Zealand, will be critical to realising this outcome.
About 22 per cent of all R&D performed in New Zealand supports agriculture, forestry and fishing. As director of Teagasc, the organisation charged with leading agricultural research in Ireland, I think this is a particularly important message for the Irish Government.
In policy statements, the New Zealand government has reiterated its commitment to maintaining the largest share of its science investment in land- and food-based science.
Investment in knowledge, intellectual assets and new technologies, as well as the adaptation of existing business practices and technologies, has always been the key to value creation in the New Zealand agricultural sector.
Early on, it recognised the vital importance of building and retaining its own scientific capability in order to underpin its comparative advantage in grass-based agriculture.
It has managed to invest in the order of 1.5 per cent per annum of agricultural GDP in agricultural research over a long period, resulting in a high level of innovation in the sector, the creation of new markets and ongoing efficiency gains.
Maintaining an environmentally sustainable system of production is high on the agenda of all food producers, particularly in countries that have to survive in competitive export markets.