Agrifood insights from New Zealand
I’ve just returned to London after four weeks on the North Island of New Zealand, where I’ve had the opportunity to observe trends in food and drink, speak with farmers and experts, and gain all sorts of interesting insights about the agrifood sector. (I also consumed a lot of meat pies and sauvignon blanc. Not necessarily at the same time)
New Zealand is an agricultural powerhouse. While in the UK, and in Europe more broadly, we tend to simply associate New Zealand with lamb, sizeable parts of the country and the economy revolve around food production. This is all the more impressive when you know:
The country abolished most of its farming subsidies in the mid-1980s under a Labour government,
It has about the same number of people employed in agriculture today as it did in the 1980s,
Support to agricultural producers in New Zealand consistently ranks among the lowest in the OECD.
I’d heard of Fonterra -the cooperative that is one of the largest exporters of dairy products in the world- and Zespri -the world's largest marketer of kiwifruit- but on this trip I also became aware of a number of lesser-known firms (often with apt names) such as Foodstuffs (NZ’s biggest grocery retailer); Turners & Growers (the producers of Jazz apples); and the horticultural grower and distributor Zealandia. It’s unsurprising that New Zealand was a founding member in 1986 of the Cairns Group, an interest group of agricultural exporting countries that lobbies the World Trade Organization to liberalise agricultural trade.
Given the country’s significant farming sector, and its relative distance from…well, just about most other countries, my guess is that people tend to think of New Zealand as fairly self-sufficient when it comes to food. Not necessarily. At a supermarket outside Tauranga (NZ’s largest port) I was surprised to find ham at a deli counter labelled as ‘Product of New Zealand or Australia or Canada or Denmark or Germany or Ireland or Poland or Spain or Sweden or USA’! I suppose we can be reassured that country of origin labelling laws in New Zealand are strict… (Somewhat strangely, the ham was named ‘Country Pride’)
New Zealand’s agricultural economy is impacted by events far away. Mike, a former sheep and dairy farmer, laid out some of the challenges faced by NZ’s farmers. When the weather is good in North America, he explained, the supply of corn goes up and this is used to feed American cattle. This leads to a glut in the global beef supply, which means that Australia -mindful to protect its own agricultural interests- tends to draw down its beef production and to ramp up its production of lamb. And so, and the very end of this chain, New Zealand lamb farmers find it hard to compete. He also explained that it can cost a NZ farmer more to shear a sheep than they can get from sales of wool. Pointing at the carpet in his home, he said that Kiwi homes (and across most of the world) used to have wall to wall carpets made of wool, but that these have now been replaced by cheaper and more durable carpets made from synthetic fibres. Faced with these sorts of challenges, how can farmers stay in business?
One thing they can do is mass mobilisation. Well before the protests over nitrogen in the Netherlands, unfair competition in France, or diesel subsidies in Germany, New Zealand’s farmers were holding nationwide ‘Groundswell’ protests throughout 2021 and 2022. These were nominally about opposition to taxes on greenhouse gas emissions. However, when I spoke with Andrew, a dairy farmer from the Waikato region, he told me that the protests were not about really about achieving any specific political objective. “They were about raising awareness” about farmers and farming more generally, he said.
The challenge of the future, though, will be geopolitical. Nick Albrecht, a government relations professional and former advisor to the New Zealand National Party, said that while recent trade agreements with the European Union and the UK had been welcomed, the country’s most important political objective is a free trade deal with India. At the same time, there is increasing concern in New Zealand’s farming communities about China’s food needs. “We’re China’s bread basket”, a former farmer told me. Anyone with a casual interest or a professional role in food security and food policy would therefore do well to keep an eye on developments in New Zealand over the coming years and decades.
