It's The Margins That Matter
OPINION: It appears to be difficult for people who haven’t tried to run a business to understand the difference between assets and cash.
He says when National became the government the primary sector said it needed more R&D. PGP has been a 50/50 initiative, but is now funded 40% by the Ministry for Primary Industries (MPI) and 60% by industry.
"We've got wonderful examples where PGP is starting to add value," Guy says. "For instance, the Steepland harvester – a machine that works on steepland slopes – we can now export that machinery and technology around the world."
He refers to huge excitement about transforming the dairy value chain – from farmgate to processing. Mozeralla cheese, which used to take six weeks to develop, can now be made in hours.
"There are many other examples across the supply chain where PGP is adding huge value."
The $31.39m 'Sheep – Horizon Three', in partnership with Spring Sheep dairy, is the 22nd PGP scheme.
Guy told about visiting the New Zealand primary sector bootcamp at Stanford University this year with Scottie Chapman, chief executive of Spring Sheep, and MPI director-general Martyn Dunne and others.
The Te Hono bootcamp brings together chief executives from the primary industries sector. The brainchild of NZ Merino chief executive John Brakenridge, it explores new ways of thinking and doing for the sector.
"That is an opportunity to look back at our little country that is leading the charge in R&D and creating value for our provenance story," Guy says.
"We feed about 40 million; we have opportunity to move more of our products out of commodities into value add, getting the consumer at the centre."
The Transforming the Dairy Value Chain PGP Guy referred to is the largest, the government paying $84.6m and industries $85.7m.
DairyNZ and Fonterra are leading the PGP programme aimed at creating new value-add products, increasing onfarm productivity, reducing environment impacts and improving agricultural education.
Other achievements include improving cream to meet restaurant and bakery customer needs in Asia, and a dairy-based milk powder ingredient clinically proven to enhance sleep.
