Wednesday, 14 October 2020 10:55

Agritech can give green shoots for post-Covid rescue

Written by  Wayne McNee
Agritech is one of our fastest growing export sectors, and a key area of focus for investors globally, says LIC chief executive Wayne McNee. Agritech is one of our fastest growing export sectors, and a key area of focus for investors globally, says LIC chief executive Wayne McNee.

Agritech has a vital role to play in the COVID-19 recovery, according to LIC chief executive Wayne McNee.

OPINION: In the wake of COVID-19, New Zealand should be focusing on industries that can help drive our economic recovery and growth over time.

While some of our key sectors have been hit hard, the dairy industry – and wider food sector – is well-positioned to continue to deliver for Kiwis through Covid-19 and help our economy get back on its feet.

But like all sectors, particularly at the moment, the dairy industry needs to keep evolving to meet new challenges head-on and maximise new opportunities.

With Kiwis relying on the primary sector to help lead them out of this crisis, agritech has a vital role to play.

Agritech is one of our fastest growing export sectors, and a key area of focus for investors globally. The reason the sector is attracting so much interest from investors is because food demand, including demand for dairy, continues to grow.

With food security a top concern and dairy considered a stable commodity through Covid-19, the agritech sector has shifted further into the spotlight and more companies are likely to raise capital in the near future.

Agritech encompasses a broad variety of on-farm technologies and innovations, from cow genetics based on genomic evaluation to the software that helps farmers run their day-to-day operations.

New technologies and innovations stand to revolutionise the dairy industry by enabling farmers to increase cow productivity, while achieving better environmental outcomes.

It is critical that New Zealand continues to invest in our agritech sector to cement our position as a world leader and to keep our farmers leading the global pastoral dairy system. To do this, we need innovative products and services to propel us forward. New Zealand’s strong reputation in pastoral systems and in producing high-quality products means we have a sound foundation to build upon.

The amount of investment pouring into the agritech sector globally continues to grow – as does the $1.5 billion value of agritech to New Zealand’s export economy, highlighting the sector’s importance with further opportunities for growth.

Given we are competing globally in one of the most well-capitalised sectors it’s encouraging to see the Government looking to support the transformation of our agritech sector, announcing $11.4 million direct investment in implementing the Agritech Industry Transformation Plan. But more private investment in R&D is also required.

Last year $97.3m was spent on R&D by the top 20 New Zealand agritech companies, according to the TIN Agritech Insights 2020 Report.

LIC spends the highest percentage of revenue on R&D of any established primary sector company. Our R&D spend makes up about 20% of all agritech R&D spend in New Zealand. 

Increased investment in R&D will help to secure our leadership in the fast-growing agritech market.

It’s also important that the innovation pipeline that brings our farmers new ideas and technology solutions is supported and that we have the money to take great ideas from incubation through to full commercialisation.

Over the last five years, we’ve seen significant capital flow into agritech start-ups worldwide. New Zealand’s emerging agritech businesses will struggle to scale in the global market without access to the capital they need, so early stage investment will be important in addressing that capital gap.

LIC invested $16m on R&D last year, but we know we also need to look externally. That’s why we recently launched a new agritech start-up investment fund, LIC’s AgCelerator™ Fund. This aims to identify and support individuals and entities seeking to develop innovations that will drive improvements in the health and wellbeing of the national herd, aid in more sustainable milk production and ultimately disrupt the dairy industry in a positive way.

It’s important New Zealand retains its leading dairy reputation at this critical time and investing in new innovations and technology is central to that.

Harnessing investment interest in New Zealand agritech companies will not only support our economic recovery, create jobs, help businesses to scale faster and be a great export earner. It will also help our dairy industry evolve to meet new challenges and keep our farmers (and country) ahead of the game.

• Wayne McNee is chief executive, LIC

More like this

LIC ready for challenges ahead

Herd improvement company LIC says it's well-positioned for the challenges ahead and remains focused on its core purpose - delivering value for farmer shareholders.

Red meat sector battles on

It's a bloody tough year for sheep farmers, but the worst may be over, and the future looks optimistic.

Breeding heat-tolerant cows for Africa

LIC is embarking on a ground-breaking project aimed at breeding heat tolerant and disease resistant dairy cows for Sub-Saharan Africa, in collaboration with the global leader in precision breeding, Acceligen, and the Bill & Melinda Gates Foundation.

Featured

Massey Research Field Day attracts huge interest

More than 200 people turned out on Thursday, November 21 to see what progress has been made on one of NZ's biggest and most comprehensive agriculture research programmes on regenerative agriculture.

Expo set to wow again

Stellar speakers, top-notch trade sites, innovation, technology and connections are all on offer at the 2025 East Coast Farming Expo being once again hosted in Wairoa in February.

A year of global challenges

As a guest of the Italian Trade Association, Rural News Group Machinery Editor Mark Daniel took the opportunity to make an early November dash to Bologna to the 46th EIMA exhibition.

Boost for hort exports

The horticulture sector is a big winner from recent free trade deals sealed with the Gulf states, says Associate Agriculture Minister Nicola Grigg.

National

OSPRI's costly software upgrade

Animal disease management agency OSPRI has announced sweeping governance changes as it seeks to recover from the expensive failure of…

Machinery & Products

BA Pumps expand

Cambridge based BA Pumps & Sprayers, specialists in New Zealand-made spraying equipment, has acquired Tokoroa Engineering’s product range, including the…

Entries open for innovation award

Fieldays and its renowned Innovation Awards are celebrating their 57th year, marking a longstanding tradition in the agricultural calendar, with…

» Latest Print Issues Online

Milking It

Chinese strategy

OPINION: Fonterra may have sold its dairy farms in China but the appetite for collaboration with the country remains strong.

Not fair

OPINION: The Listener's latest piece on winter grazing among Southland dairy farmers leaves much to be desired.

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter