Monday, 27 June 2016 15:53

Farmers on cusp of unprecedented change

Written by 
Ian Proudfoot, KPMG's global head of agribusiness. Ian Proudfoot, KPMG's global head of agribusiness.

KPMG's Ian Proudfoot says significant change is coming to New Zealand's primary sector and "farmers that ignore it do it at their peril".

Proudfoot was speaking this morning at Federated Farmers' National Conference Meat and Fibre AGM.

The world was on the cusp of a fourth industrial revolution and this would mean thinking more globally.

Kiwi farmers who could tell their unique story would prevail as the global consumer became more discerning about what they eat and where it came from.

"There is a fusion happening where digital, physical and biotechnological products will redefine how we live and farm," he says.

Still, the primary sector was up to meeting these challenges as changing market forces and conditions was something it was familiar with.

Being a developed country that relied heavily on agriculture, New Zealand's primary produce had to be better than anywhere else and the meat sector had to be prepared to invest in its future.

Better red meat industry collaboration would present opportunities but also the likelihood of some unavoidable lessons.

"We have to be prepared to share the risks of upsides and downsides. Too often we are quick to punish those that fail."

"Farmers need to get closer to the consumer and understand their lifestyles and aspirations," he says.

ANZ rural economist Con Williams says the technology is available but farmers needed a cultural shift in behaviour. With the global food chain increasingly going online farmers had greater access to understand their consumers and what they were willing to pay for and why.

John Loughlin from the Meat Industry Association (MIA) who opened the panel discussion says New Zealand meat farmers should stick to their principles of acting smart, being innovative and working hard to succeed.

"It's about targeting the affluent consumer and using the modern technological advances to our benefit."

The recent Brexit referendum in the United Kingdom would change market access with new players coming on the scene which would intensify competition.

This was also an example of how international market disruption can at any time influence our markets, he says.

Federated Farmers Meat & Fibre Chair, Rick Powdrell summed up the session: "Farmers need to accept change is inevitable and the speed is rapid. We need to use all the available tools to adapt to the future environment," he says.

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